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Horizon scanning for HR (1): Top 7 issues and initiatives in 2021

  • Market Insight 16 December 2020 16 December 2020
  • UK & Europe

  • Employment, Pensions & Immigration

While 2020 has taught us it is difficult to predict what the next twelve months will hold, it does seem inevitable that the Covid-19 pandemic will continue to be a (if not the) key factor in determining and influencing HR strategy during 2021 and beyond. This will include dealing with challenges, as it has done in 2020, but also influencing change in terms of looking at the methods and culture of work.

Horizon scanning for HR (1): Top 7 issues and initiatives in 2021

Although the impact of the pandemic of course varies hugely depending on the nature of an employer's business, as well as how they currently operate (at the time of writing pubs and restaurants in both the writers' villages are shutting their doors once more, whilst office working continues remotely), there are common themes for HR in 2021 to consider.

Here we set out what we consider to be the key issues and initiatives for HR in 2021. See also the other two articles in our Horizon scanning for HR series: Key dates and legal developments to look out in 2021 and Important workplace cases to look out for in 2021.

Flexible working requests

While the sudden increase in remote working (for those who, essentially, work at computers) since the outbreak of Covid-19 has posed many practical challenges, it is likely to result in a huge cultural shift for many businesses going forward because employers and their staff have appreciated the flexibility and other benefits of remote working.

Whilst this will not be a whole-scale abandonment of office space which some employers (and some commentators) were considering / predicting in May and June – when we were a couple of months into the first "lockdown", we see a new "balance" on the horizon.

Employers who have been office based will want to consider the following competing considerations:

  • The benefits of having teams and employees based together in offices; and the collegiality, culture, sharing of ideas, and efficiencies which that can create, as opposed to the benefits of working from home; and the saving of commuting time and cost, and for some increased productivity.
  • The desire of some employees for greater flexibility and ability to work from home, and the desire of other employees to attend work at an office where they have an environment specifically designed for work, and where they can interact with colleagues and receive support and development.
  • The costs of maintaining large office footprints, as against the savings of having a more agile workforce using home working (but with the need to get on top of issues relating to home working – such as health and safety, and provision of equipment).
  • The benefits of the flexibility for employees that home working brings, as opposed to the need in certain circumstances for colleagues and managers to assist and line manage employees who need support / who need to improve their performance.

We predict that many organisations and employers will adopt a middle ground – retaining their office space to be there for all who need it, and encouraging and expecting (and requiring) attendance for certain periods of time (perhaps 2, 3 or 4 days a week). But certainly we predict a "new normal" where there will be greater flexibility than would have been envisaged pre-pandemic.

Of course some employers will also decide that they need to or want to return to a full office working environment as before, and others may well decide that they don't need their offices at all. But we expect these groups to be in the minority as things stand.

Whatever individual employers decide though, considering what their strategy and balance will be regarding home working / office working will be top of the list for those that have office workers.

Mental health and employee wellbeing

We predict an increasing focus on mental health and employee wellbeing through the next year, with HR teams reviewing and revisiting support that they have in place, and their programmes and training in this area. See our articles for more information on this topic: Employee mental health on returning to work – we can't read minds, so communication is key and Mental Health and Home Workers– out of sight out of mind?

Data protection issues

As the vaccination programme progresses, when restrictions begin to be relaxed and larger numbers of people start attending the workplace again, more employers may consider running testing programmes to give confidence to employees and customers in the workplace and to help protect business continuity. Some employers have already put these kinds of testing programmes in place.

Employers will want to consider this as part of their efforts to "return to the new normal", and as part of this they will need to consider the data protection legislation.

Information about employees' health, including whether or not they have tested positive for Covid-19 or have particular symptoms, will be 'special category' data under the General Data Protection Regulation (GDPR). Employers should only test employees if they can comply with the data protection obligations relating to the processing of such data. The Information Commissioner's Office's advice for businesses carrying out testing is that they can rely on their health and safety duties as a ground for processing special category data in these circumstances, provided they have carried out a data protection impact assessment, focusing on the new areas of risk, before introducing testing.

Employers should process employees' health data only if this is necessary and proportionate, and should collect the minimum data necessary and ensure that it is kept secure. Employees must be provided with information about the processing of this data, including what health data will be collected, what it will be used for, who it will be shared with and for how long it will be kept.

Workplace restructuring and redundancies

In the coming weeks and months, employers will continue to consider whether or not they unfortunately need to consider any reduction in their workforces, and any redundancies. The current end date of the Coronavirus Job Retention Scheme at the end of March 2021 is likely to be a time that employers are bearing in mind, in addition to the review date of the scheme scheduled for January in terms of the level of support that it provides.

This will be considered in addition to any cost-saving measures that can be undertaken to avoid redundancies, such as reducing hours or pay, lay off and short time working (where there is a contractual right to do so) or unpaid leave. But unfortunately it is perhaps inevitable that redundancies will need to be considered in some businesses.

Of course, in relation to any changes that are proposed which may impact on employees, employers will need to consider their consultation obligations (both collective and individual), and how these will be carried out in good time and of course before any decisions are made.

HR teams will therefore be remaining very close to the business and any considerations around difficult decisions which may have to be made in the future, to ensure that any restructuring or redundancies are carried out fairly, with consultation that takes place in good time.

In light of all the issues for employers contemplating redundancies to take into account (including the impact of the Coronavirus Job Retention Scheme rules, when to start the consultation process and employees' notice periods) they should consider putting together a detailed timeline which identifies all the practical and legal considerations involved in the redundancy process, thereby maximising the likelihood of a fair process and, ultimately, fair dismissals. See our article for more information: Life after furlough – Considering Redundancies

Diversity initiatives

Whilst understandably focus has been on crisis management during the pandemic, diversity and inclusion remain a key issue for businesses, and continued focus is important to combat any issues caused or heightened by the pandemic.

During the pandemic to date, women in the UK are more likely to have been made redundant, seen a decrease in their earnings and to have been working while looking after children, even where both the mother and the father were working at home. These impacts may well flow into, and have a knock on effect on, pay, prospects and promotion for women going forward. Given the efforts many employers are making to narrow their gender pay gaps, HR teams will want to consider whether they may have an issue in this area which they want to factor into their strategy going forwards.

That said, as we always say with diversity issues, there should be a focus on any sex issues, but that should not be the only focus and employers need to look more broadly at diversity. HR teams will want to consider whether any other groups of their employees, or whether any other individuals have been disadvantaged by the pandemic and whether there is any support that they want to provide going forwards - for instance individuals who are vulnerable and have had to isolate for longer and have potentially been impacted in their work.

The Black Lives Matter movement has also demonstrated how employers should focus widely on diversity. We believe that employers will continue a focus on race diversity over the next year, but again (as with sex) this should not be the only focus. HR teams will we believe be looking broadly at diversity next year, and we believe that areas such as social economic diversity will start to come more to the fore.

See our Workplace culture webpage for more resources on this topic, including articles and webinars.

Data collection

The spotlight which has been thrown on racial diversity by the Black Lives Matter movement (as mentioned above) this year has increased the focus on this issue for employers, many of whom are keen to carry out diversity monitoring to identify where they may have under-representation.

However, a significant consideration when conducting diversity monitoring is the impact of the GDPR. This allows employers to process employee personal data where it is for the purpose of monitoring diversity and equality of opportunity or treatment – but strict parameters apply because this is 'special category' data as it includes information about race and ethnic origin. Provided the data is only collected for its proper purpose and is proportionate, employee's explicit consent is not needed. But this can be difficult for employers to judge.

That said, there are steps employers can take to minimise risk. If the data is anonymised, it will no longer constitute personal data under data protection laws, so will be easier to manage. Anonymising the data will also help mitigate the risk of harm to employees if the data is leaked inadvertently or disclosed.

In addition, one of the most effective forms of protection against non-compliance with data protection law is for employers to have a document trail showing the process taken to deal with the data properly. This means having a written policy governing how the diversity data is handled, and may also include carrying out a data protection impact assessment on the data collection exercise. Clearly documenting what you are doing with the data will also assist with providing transparency in relation to the business' diversity and inclusion processes.


Free movement for UK Citizens in the EU and vice versa officially ends at 11pm GMT on 31 December 2020. Effective from 1 January 2021, UK employers will be able to sponsor EU nationals under the Sponsored Skilled Worker (SSW) and Intra Company Transfer categories of the new Points Based System. The Sponsors’ Licence will be a crucial tool for recruitment of EU nationals making it indispensable for any UK employer of a non UK workforce.

On the positive side, SSW applications for EU nationals will not require prior advertisement or Quota requests and will be available for roles exceeding the minimum skills threshold of A level standard. However, annual HR budgets will need to be substantially revised to reflect the additional associated fees of a SSW application. These will include Home Office application and Certificate of Sponsorship fees, Immigration Health Surcharge and the Immigration Skills Charge, although realistically employers may not feel the full brunt of the additional cost until at least 2022 when new EU national recruits are less likely to have status under the EU Settlement Scheme. Post 30 June 2021, start dates for some new EU national recruits will also need to account for the need to complete an application process in order to meet Right to Work documentary requirements.

Employers will need to ensure that their UK Immigration Policy documents are amended to reflect the new document retention requirements for EU national employees which will vary depending on whether recruitment takes place prior to 31 December 2020, between 1 January and 30 June 2021, or post 1 July 2021. Whilst employers will not be required to revisit Right to Work checks for EU nationals employed prior to 30 June 2021, it is important to remind those eligible employees to submit applications under the EU Settlement Scheme by no later than the final deadline of 30 June 2021.


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