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Podcast: How leaders can manage the productivity puzzle 

Tim Ringo, Award-winning HR consultant and Author                   

 

As leaders continue to navigate the changes of the COVID-19 pandemic, factors such as extended periods of remote working and a lack of face-to-face collaboration can have a damaging impact on employee productivity.

So today we’re joined by Tim Ringoaward-winning HR consultant and author of the book Solving the Productivity Puzzle. Tim is here to share how leaders can engage, motivate, and develop their employees to improve both individual and business performance.

1. To start, could I ask you to please introduce yourself to our listeners?

(01:00) Sure, I’m Tim Ringo. I’m a former management consultant and software executive. I recently retired, or as I like to call it, pro-tired, because I’m still doing things like podcasts and writing books and those sorts of things. But I started out my career in Andersen Consulting back in 1990; Andersen Consulting is now known as Accenture. So, I was a management consultant for 25 years.

I was there for 16 years; I was a senior partner and was then recruited to IBM to be Vice-President and lead up their human capital consulting practise in 2006. I did that globally, so I spent a lot of time on an aeroplane. I also wrote a book at that time, called Calculating Success, with my co-authors. And that book was about workforce analytics which was about ten to twelve years ago, so it was a little bit ahead of its time.

And then I joined SAP SuccessFactors as a Vice-President. So, the last five years working alongside the SuccessFactors sales teams, helping SAP customers understand how to get the best out of their SuccessFactors system. And then as you mentioned, I wrote my latest book which is called Solving the Productivity Puzzle. It came out late last year in 2020 and it turns out it’s really timely because everybody’s talking about productivity now, so it’s been good. It was just shortlisted for Business Book of the Year by the Business Book Awards, so I’m really pleased with how it’s been received so far.

2. What sparked your interest in productivity and led you to write your book?

(02:30) Well, it was in 2016. I was looking at a paper by the OECD. I guess I’m one of those sad people who read OECD white papers, but as you know, OECD is the world’s economic body. They do their big part in calculating gross domestic product both globally and then by country. But they put out a paper that was really pessimistic about the future, which essentially said that the average annual rate of GDP growth is going to be stagnant or decline over the next 50 years, which essentially means that 50 years from now we would be likely to have less prosperity and lower living standards than we have today. That’s the outcome of GDP going down.

And most of the reason for it was people-productivity, and they gave three reasons why there was an issue. Firstly, organisations weren’t spending enough on aligning people to new technology, so investing in learning and change-management and those sorts of things, and simply just explaining to people what new technology was being implemented. The second was they weren’t adjusting their processes for digitisation, so a digital organisation that were still using 20th-century processes. And then the third one was their prediction was that organisations were not going to change their organisational structures to take advantage of new tech.

So pretty grim, and I certainly agreed with those three things, but I didn’t see those as long-term issues. In fact, I saw the opposite, which is that companies are working hard on those three things to fix them, to align people to technology, to re-engineer processes, to flatten out organisational structures. So, I thought it was overly pessimistic, and I took an optimistic view and wrote a book about what I saw where the trends that were emerging were both challenges, but also opportunities and then I wrote about solutions.

Really the main part of the book is focusing on, how do we fix this? And I’ve been lucky enough in a thirty-year career to working with some of the world’s biggest and most successful companies and I’ve got to see what they do to create higher performing and productive workforces. So, I focused in the book on the solutions, but that’s what inspired me, when I thought, “Wow, that’s a really pessimistic view and we really do need to fix this.” And so that’s why I wrote the book.

3. What do you mean by the term “productivity” in real terms?

(04:52) Well, this is the immediate problem I ran into when I sat down to write the book, which I looked up: what’s the definition of productivity? Because it had been thirty years since I was in business school. I thought that I should probably go have a look at it again. I found the following, and I’ll read the definition just to show you how boring it is, but it’s:

“Various measures of the efficiency of production. Productivity measures expressed as the ratio of output to inputs used in the production process, i.e. output for a unit of input.”

So that’s very 18th-19th century, that is people as machines picking fruit on a farm or producing widgets. That’s just not what work is like today as 70-80% of us work in offices. And so, I thought, right, I’m going to have to redefine this to unpick the issue. And so, I came up with the following, which is:

“Getting stuff done that measurably improves the economic and human interest of organisations and society at large.”

So, I took that one-dimensional view about people producing things and said, “Look, it’s a broader thing.” It’s absolutely about production, but it’s the outcomes of those productions, so the impact on the economic, the human interest, and then organisations, the society at large, it’s all these things. And you essentially had to come up with that new definition, have something to aim at that helped solve the problem. And so that’s what I hang the whole book on, which is, okay, what’s underneath that?

And for me, there’s three things. There’s the fiscal side, absolutely. You always must measure the dollars and cents and the outputs. But there’s the second piece, which is creating workplaces where people can flourish, so what we call engagement and engaged workforce. And then the third is, well, guess what? Engaged workforces are innovative, they figure out new ways of doing things they come up with new products, new services, and you get this virtuous cycle of, well, engaged workforce creates innovation, which creates more money and prosperity. So that’s how I’ve defined it. It’s a broader, more three-dimensional definition.

4. What impact has the COVID-19 pandemic had on the world’s productivity?

(07:00) Well, initially, a year ago if we think about it— Gosh, it seems crazy that we’re still here a year from now, we’re still in lockdown (in the UK). But that immediate first three months, March, April, May, there was a massive impact on the world’s productivity. It’s been centuries since we’ve seen, particularly in this country, in the UK, that level of productivity drop.

But what we’ve seen is quite quickly in the following nine months as we’ve dug ourselves out of that hole, and in fact, because we were already in a situation where productivity was going down, we’ve actually started to see productivity get back to where it was and start to go beyond. So, the initial numbers are starting to come through. So that January, February this year, that starts to show really interestingly in that people working from home, people working flexibly and people being innovative in how they work is actually starting to solve the productivity problem, it’s starting to impact and create greater productivity. Initially, it was a huge shock and a huge drag on, but we’re starting to see some numbers that indicate we’re actually starting to come out of this better than we were when we went into it, which is fascinating.

5. So, you’ve just mentioned that we’re starting to see productivity figures rise again, how exactly can leaders measure productivity?

(08:19) So, that new definition that I described starts to measure several things. The old one just measured the outputs that people were creating. In the new definition, you can and should measure things like your workforce’s satisfaction, your workforce’s engagement levels. These are things you can measure scientifically and put dollars and pounds to, so that’s the first thing. The second thing is that when you’ve got that engaged workforce and they’re impacting positively on the organisation, well guess what? You’re getting outputs, but more importantly, you’re starting to get outcomes. And outcomes are the things that drive what a business produces for its customers or for the taxpayers. And so, you can make this direct link between engagement and people doing more and doing it better and take it one step further and say those outputs together create an outcome.

So, let’s take for example, that a high-tech company comes up with a new version of a phone that nobody’s ever thought of—this is like the iPhone was 15 years ago—and comes up with this new thing. I don’t know what it would be but it’s almost ahead of the market. But essentially, that came because people saw a new way of doing things, a new product, something that people would want, and took that to market. And there were outputs in producing that, but ultimately you get that phone to the market, people start buying, it becomes the next big thing. That’s an outcome; that’s a huge outcome, that’s a multi-billion-dollar outcome.

And so those are the things that you want to measure. You want to measure the engagement, through to the innovation that it creates, through to the outputs, and then ultimately the outcome that it creates. And that’s what we’re missing today, we’re missing all those pieces in between, but we’re also missing that these products and services that we’re producing these days are sometimes ones and zeros. It’s software, it’s these sorts of things which I think we have a real problem in measuring the outcome of those things. And that’s what economists are starting to get better at, so we’ll be able to measure those ones and zeros, and real dollars and pounds and cents. But that’s how I see things improving in terms of us being able to measure productivity properly and measure the uplift that we’re going to see in productivity.

6. Why do you think the productivity puzzle is such an important one to solve for leaders and organisations, and is it becoming an even more important puzzle to solve as we start to emerge from the pandemic?

(10:52) So as Professor Krugman is famous for saying not too long ago, I think in the past ten years or so, that, “In the short term productivity is neither here nor there, but in the long-term productivity is everything.” And that’s true because the only way that economies and societies grow and prosper is by creating ever more productivity in terms of what people produce and the innovation that they create. It’s the only way that we can see stock markets go up, it’s the only way we can see profits go up, it’s the only way we can see wages and those sorts of things come up.

So, for leaders of organisations, whether you’re a public sector or private— If you’re public sector, your customers are taxpayers and it’s about how you effectively use those tax dollars. If you’re a private sector, it’s about the shareholders. But increasingly it’s becoming more about what you’re doing for society in terms of raising all boats in terms of prosperity, not just the shareholders. And so, leaders need to recognise that the linkage between that engaged workforce in the innovation, then the productivity they create, and then guess what? What that does to the outside world in terms of everybody’s prosperity and everybody’s standards of living. And this is really part of the thing that I think, frankly, business schools sometimes miss. They miss making these connections and it becomes down to dollars and cents and people as headcount and that sort of thing when it’s a much more complex picture and real leaders understand that equation.

7. How important is it for leaders to really understand the individual motivations of their people in driving productivity? And how can they go about improving this understanding?

(12:34) Well, I learned this the hard way, and in my career— Maybe not the hard way, but it took some time, which is that as a leader, as a manager, one of the things that I learned is I need to understand everybody who works with me and works for me. I need to understand my colleagues and my team, what motivates each one of them individually, both personally and at work, and then help everybody to understand each other in that way, because understanding individual motivation and then team motivations allows you to do everything you need to drive productivity.

Because people have a desire to do particular work, and unfortunately, a lot of people end up in work that doesn’t fulfil that desire. And really, a leader’s job is to help people get to that job, to that thing that they’re good at and help them flourish in that situation once they find it. So, your job is to move people around the deck chairs and get them in the right place at the right time with the right skills and help them then develop from there. And you can only do that if you understand their motivations. If you don’t understand what motivates them, it’s impossible to get them in the right place to do the right things.

So, it was trial and error for me, I figured out. And so, what I did going forward is I would always sit down with a new direct report or a new team and get to know each one of them personally and ask them directly, “What motivates you? What can I do?” A manager cannot make it a hundred percent that somebody is doing the exact thing that they’ve always wanted to do. And it just doesn’t work that way. But if you’re trying and you’re getting at 50% or 70%, people totally appreciate that and you’re going to get the most from them. So, it’s about learning to understand their motivations, listening, and understanding what they’re saying, and then really use that to help them flourish.

8. Of course, today we can’t have this conversation without me asking if you think that people’s motivations have changed because of the pandemic?

(14:37) It’s anecdotal, but talking to people in my street and colleagues and ex-colleagues and that sort of thing, I’m getting the sense that a lot of people are stepping back and saying, “This is somewhat of a near-death experience,” in terms of this crisis. It must’ve been how people felt maybe after World War II was over. It’s like, “Wow, I got through that somehow, and I want to think about how I live my life and the way I live my life,” and I think a lot of people are going to do that.

And I think you’re going to see a lot of people look at the manager they work for, look at the organisation they work for and say, “Is this really where I want to be and what I want to do?” Because one, the economy is really going to take off I think, later this year, and people are going to have choices. So, I think people are going to vote to go places where managers have a high EQ, high empathy, who took care of people during the crisis. They’re going to go to places that, it matches more of their personal values, which is what I was talking about a moment ago, and they’re going to do that.

And I’m hearing a lot of people saying, “I think I’m going to change job,” or, “I’m going to do things differently going forward.” And this has been such a long crisis that I think it’s given people a very long time to think about these rather deep things, and so I think it’s going to have a big impact. And the other side of it, I think there’s going to be a lot of people who go back to work who are traumatised and don’t know it. And it’s going to be up to those managers to recognise— we’re not psychologists, but you should be able to tell if somebody’s not well; it’s going to be up to us to help them get where they need to be well. And guess what? If you do that, they’re going to probably want to stay and work with you. So, I think that’s the other side of it, that people have had life-changing situations. But I think a lot of people don’t recognise that they’re probably somewhat traumatised coming out of the past year.

9. What role does reward and recognition play in improving the productivity of a workforce?

(16:39) Well, I’ll tell you one role that plays at the moment, is it absolutely—and this is proven, and I’ll point you towards the data that shows it—it is proven that the way we do recognition and performance management today and how we pay people actually de-motivates them, it reduces productivity.

So, if you think about it, and this is what we’ve seen for over a hundred years, but essentially the way Western capitalism is set up and the way organisations are set up is it’s the carrot stick. So I will give you a fantastic bonus if you produce more widgets and you do it faster and with higher quality and you can get a promotion as well, or if you don’t do what I’ve asked then you’re going to be punished. And that is essentially how work has been since the beginning of the industrial revolution. Well, guess what? Certainly, that works. If somebody is on a farm or in a factory and you pay them a big bonus, they are going to pick faster or they’re going to produce faster and they’re going to pay attention to the quality of that. But the fact is, is that if you’re in an office environment, where 70-80% of us are, and you say, “I’m going to give you a cash bonus for your knowledge, expertise and from working with other people in a team to produce something.” Guess what? That person gets very focused on their money and they’re not focused on the team, they’re focused on their bonus.

And Daniel Pink’s book Drive, so D-R-I-V-Eso, like drive, driving a car – Daniel Pink, he’s an MIT economist, wrote a book ten years ago that still has got repercussions today. It’s really caused people to sit back and think about the whole idea of rewards and recognition. Essentially what he found in his data, and he looked at this at great levels of detail, he found that for office, knowledge workers, intrinsic motivation, which is why they come to work for you, why they come to do what they do. The motivation of that is as important as the money, and if you then put their focus completely on the extrinsic, which is the money and the bonus, you are cutting off half of the motivation and you’re distracting them.

So, you’re seeing a lot of organisations, particularly after the 2008 financial crisis, particularly in the financial service industry said, “We’ve got to get rid of these big bonuses.” Because it created a situation where people focused on the money, took huge risks, and almost brought the whole system down. And so, they moved more towards, instead of giving investment bankers big cash bonuses, give them shares of the company. And guess what? It changes your thinking. Suddenly you’re an owner and you’re focused on the organisation growing and becoming more prosperous than you are on just focused on your personal cash bonus.

So, you’re seeing a lot of organisations starting to mix non-cash rewards into their rewards to people because it takes the money off the table. And who doesn’t want shares of a growing enterprise? If you’re in the public sector, a lot of public sectors say, “Well, we’ll pay for your PhD” or other non-cash sorts of things. And this is really starting to fix the problem. It’s taking people out from focusing on their cash bonus to starting to focus on working as a team because there’s something at stake for everybody. And that’s really come from his book, and a lot of people said, “We have to rethink this” because that intrinsic motivation is being left on the table and people were not tapping into it.

10. What impact does high turnover have on productivity? Is it a good or a bad thing?

(20:05) So if we go back to the GE capital days of Jack Welch in the eighties, his view was, “Turnover is a great thing.” You want people to leave your organisation, particularly if they’re on the lower end of the performance scale, and that held way until well into the 21st century. But it’s really proven to be a false economy, that this whole idea is that you want turnover and you want to push people out, the thinking on that’s changed quite dramatically in that what we’re finding is that turnover is extremely costly on so many levels. First, that you must replace that person, and the cost to recruit them is very expensive these days, plus to get them up to speed. And then we don’t think about the disruption to teams that that person was in, that you took out, and now you put a new person in, and then the productivity of that team.

And so, Jack Welch missed something which said, “Certainly you can probably save some money by moving somebody out who seems to be low performing.” There’s probably some question around whether that was really the case in the first place anyway, but you’re not thinking about the broader impact and you should pull out all the stops that you can. The leaders need to understand the motivation of the person and help them get to the right place at the right time and the right job.

And from there, it’s saying, well, when you turn that thinking around, it says, no, turnover is already a bad thing. So, my personal experience as an executive and then what I’ve seen working with organisations, turnover is bad for organisations. And you want to keep it as low as sustainably possible. If you need to, maybe move people into different positions, but you want to try to hold on to that workforce because of the costs, the disruptions, and the ultimate impact on productivity.

11. What about wellbeing and its role in productivity? What should leaders keep in mind about this?

(22:02) Well, it’s really interesting because when I sat down to write the book and I was looking at various trends and things that I thought were going to be important based on my research to impact and improve productivity, one of the ones that I looked at and tossed aside was wellbeing.

So, I’m a Baby Boomer/Gen X, so I’m literally on the cusp of both of those generations. So, to a certain extent, I think my baby boomer part of me was saying, “Just work harder” and “What’s all this wellbeing stuff?” But my wife kept putting articles and papers in my hand and saying, “You really have to look at this. This is really important.” Then I started doing a lot more research and I got the opportunity to spend some time with Arianna Huffington while I was at SAP and her Thrive initiative, and really came out thinking, “Alright, wellbeing is in the top three things of the top 10 things that you want to do to fix productivity.”

And so, it went from not even going to be part of the book to one of the most important things when I did proper research on it. And the reason is because there are three aspects to it, it isn’t just about having a gym on the first floor. There are three elements that are important. It’s the physical, you should always do everything you can to help your workforce be as physically well as they can. Maybe it’s as simple as handing out water bottles, drinking enough water during the day can improve your cognitive function by up to 20%. So little things like that, or having a gym or those types of things, health insurance, all that sort of stuff. But that’s one part of it.

And a lot of people stop there when there’s two more pieces, the second one is mental health. Mental health is just as big as physical health. In fact, in some cases, and I think after the pandemic we’re going to have more mental health problems than we do physical problems, which of course mental health tends to lead to physical problems. But this is a huge thing and it needs to be made okay in an organisation to say, “I am not well both physically and mentally,” and for that organisation then to step in and say, “We’ve got some things we can do to help you.” People never forget that, and that’s important, that physical and mental wellbeing is important.

But there’s a third element, which I also think is going to be important coming out of the pandemic, is the financial. Financial stress has a huge impact on people’s mental health and then their physical health and whatever organisations can do to reduce that stress around finances. So, a lot of people may be worried about losing their jobs. Well, come out and tell them they’re not going to if you really believe that’s the case because people are worried. Second, a lot of people are financially strapped now. So, several organisations are setting up the ability for you to borrow money against your salary without ever asking your boss. You can just go online, do it, and nobody knows about it, it’s kept anonymous. And that really reduced the stress, because you don’t have to go to your boss and say, “Look, can I borrow? I need £500.” That has a huge impact on people, to know they’ve got that safety net that they could get some money if they need it and not have to go begging.

So, these things are important altogether, and you don’t really have wellbeing in an organisation until you’ve got those three things and then all the subsequent parts that make that up.

12. Are there any other elements of the overall employee experience that leaders need to keep in mind when tackling dips in productivity?

(25:30) It’s really interesting, but it’s been in the past three or four years where I’ve started to hear very senior executives, CEOs at the top leadership of companies starting to talk about ‘digital at home, digital at work’. Meaning that senior leaders are seeing that at home, we have fantastic devices that make us highly productive. We have our Alexa’s, and I’m going to set mine off, it’s sitting here on my desk. We have our smart refrigerators, ours here orders milk and those sorts of things when the camera sees that we’ve run out of these things.

We’ve got various things that make us super productive at home, but then you get to work and it’s like 1990 all over again. It’s a PC with a screen and a mouse and a keyboard. You don’t talk to anything; you don’t have anything that’s automated. And so, a lot of senior executives have really come around to, “Hang on a minute, productivity is going up at home but why don’t we start to make work look like home in terms of productivity? Why don’t we have digital assistants for our people? Why don’t we have smart technology that does things without you even having to ask it to do it?”.

And so, you’re seeing a big focus on human experience at work, and that’s not just the human resources side of it, it’s everything. It’s how your boss interacts with you, it’s how the technology at work interacts with you, it’s how the entire organisation is set up to help you flourish. And that isn’t a charity thing, if you flourish, the organisation flourishes. Senior-level people realising that this human experience is so important, that everything should be designed in the organisation around the employee and the customer. Right now, most things are around the taxpayer or the customer. Now they’re saying, “Right, no, it’s employee and customer or taxpayer, and we should design everything around those things.” And that’s a huge shift, and for me, that’s a big part of solving the productivity puzzle, the employee experience. You’re going to hear more and more about that in the coming years. And I think the pandemic’s accelerated it. People have been working at home, they’re going to come back to work and say, “Well, hang on a minute. I feel like I’ve stepped back ten years, twenty years.” So that’ll be interesting.

13. Can strategic workforce planning boost the productivity of a workforce? And how can leaders go about doing this effectively?

(27:46) Not only can it, it will, it absolutely does. And it’s interesting, you’re seeing several universities, business schools setting up whole degrees around strategic workforce planning. And that is because organisations are asking for that capability. They are going to be the rock stars of the next decade. People who do strategic workforce planning and getting right people, right skills, right place, right time, right motivation. It’s the core of my book that quote-unquote, “Equation.”

Adding all those things up, that’s what gives you people-engagement, innovation, and performance. When people are actively managed in a way such that they’re in the right skills, right place, right time, right motivation. That’s good for everybody, and for me, when I looked at what did top organisations do, the ones that have solved the productivity puzzle. Well, guess what? They do that well. And they don’t just do workforce planning for the moment, like this week or next week, they can look ahead eighteen months and say, “Based on economic conditions and supply and demand, we can see it’s going to look like this.” So, they are always looking out into the future to make their decisions today.

And for the companies that get this right, they’re going to have a huge strategic advantage because there’s already several companies that do this well. Companies like IBM, companies like SAP, they’re good at getting their workforce in the right place. And this is going to be important, but we must understand that first, it’s a mindset to say as a leader, that’s my job. And then secondly, it’s putting in place processes, digitally enabled processes that will allow this to happen. And third, then it’s plugging in technology to do it intelligently using artificial intelligence and machine learning. Notice I put technology third on that list, and that’s intentional because it’s a mindset first. Leaders must have this in their mind, it’s how they lead. And then everything flows, so it’s critical. And It sounds boring, strategic workforce planning does not sound sexy or exciting, but it’s going to be, and it’s going to be important for organisations whether you’re a manufacturer or you’re a very large recruitment company.

14. What do you think the most productive organisations and leaders do differently?

(30:11) Well, I think to summarise, I think they are very good at understanding the details of their workforce, starting with motivation. They are very good at listening and then they’re very good at taking those two things and deploying that workforce in the most effective way and constantly changing the mix to fit both what the worker’s looking for in terms of their aspirations, but also for what the customer needs. They’re constantly moving people around like on the chessboard, get them in the right place to get the most advantage for the employee, but also for the end customer.

And for me, that’s what the most productive organisations do, but they invest in this. They have the mindset, and then they invest heavily in it and they don’t make it a one-off, it’s a constant investment. It’s just part of doing business, and that’s the organisations that are going to really do the best in this next decade.

15. Now I’d like to finish with a question that we ask all our guests. What do you think are the three qualities that make a good leader and crucially, do you think these qualities have changed because of the pandemic?

(31:26) So for me, I think the three things are this in the following order:

I think a good leader and a great leader has a clear vision and purpose. So, they know exactly where the organisation is going, what’s the purpose of that, and can articulate it in a way that’s compelling.

Which gets to number two: being a good communicator. And these are two things that you can learn to do. You can learn to have a discipline around knowing exactly what your vision and your purpose is and developing that. And then you can learn how to then communicate that very effectively and compelling.

But the third one is not as easy to be learned, and it’s something I call EQ, so it’s empathy. So, the leaders of the future of the coming ten years, the rock stars of the coming ten years, are going to be people who have a high EQ, they’re great listeners, they’re genuinely empathetic about human beings and people in society at large. And that’s who people are going to gravitate towards to work. A lot of that is going to be because of the pandemic. It was already heading in that direction, but the pandemic has accelerated this idea of leaders with high EQ. And that is something that is not always learned. Many people, they’re born with it, but you can develop it over time. You can discipline yourself to be a good listener and show interest in other people and that sort of thing, but it’s going to be important going forward. And I think that’s who you’ll see emerge in the future. And that’ll be a big part of solving the productivity puzzle, I think.

About this author

Tim is a Chartered FCIPD, executive board advisor, with over 30 years of experience in HR management consulting and HR software. He is an award winning human resources conference speaker and consultant, named “Most Outstanding HR Consultant & Conference Speaker 2021 – UK” by Corporate Vision Magazine. He shares his experience through expert advisory projects, engaging speeches and interactive HR and business transformation workshops. As an author, his books give unique insights into how engaged people harnessing smart technology is transforming the world of work. His latest book, Solving the Productivity Puzzle assesses how people engagement, innovation and performance will transform work and is available to order here.

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