by Robin Throckmorton
With a new political landscape and continuous changes in our demographics, the year ahead is going to be a rapidly changing year for the HR world. HR is going to have to stay on the forefront of legislative changes and may even need to get more engaged in influencing those changes. Plus, with the continuous evolution of our workforce, what has always worked may not work anymore whether it be recruitment, compensation, or even workplace policies.
So what’s keeping HR up at night and on our toes during the day????
TREND 1 – Retiring Baby Boomers
For years, the work force has been dominated by the Baby Boomers. The masses of Baby Boomers in the workforce have dominated the other generations by sheer numbers. Slowly this is changing. As of April 2016, the Baby Boomers are no longer the largest generation in the workforce as the Millennials surpass them. Currently, around 10,000 Baby Boomers turn 65 every day according to PEW Research. Some Baby Boomers are retiring while others are plunging into their next career.
Considerations: With a mass exodus of Baby Boomers, whether to retirement or a new career, how will your company manage this loss of wisdom, knowledge, and experience? What can your organization do to retain the Baby Boomers at some level to minimize the loss? What steps can you implement to transfer this knowledge to the younger generations?
TREND 2 – Entrance of Generation Z
Welcome Generation Z (born 1991 to present) to the workplace. According to Bruce Tulgan’s research on the “Great Generational Shift,” Gen Zs grew up “over supervised, coached, and constantly rewarded by their parents.” As a result, this generation has high expectations for themselves, their boss and the company. They have a lot of wants and want to know exactly what they need to do to attain those wants including clear goals, precise timelines, and acceptable rewards. While some feel this is the trophy generation where everyone was a winner, truth be told, it was the parents that did not “keep score”, the kids certainly did. They are competitive and they know how to keep score.
Considerations: This generation does not “trust” the system and wants clear goals tied to rewards. HR is going to be challenged to create an environment that will accommodate these workers including new programs such as training managers, creating clear milestones, developing incremental rewards, ensuring open and regular communications, and more. Gen Z won’t be appeased with “if you work hard, here’s where you’ll be in 3-5 years”. They want to see more immediate rewards – next week, next month, 6 months out.
TREND 3 – Workforce Flexibility
To begin with, flexibility in the workplace is no longer a request by moms and/or Gen Xers. Both genders and every generation are looking for workplace flexibility for their own reasons.
Considerations: To stay competitive, organizations will need to figure out how to accommodate these requests for flexibility such as flexible starting and ending times and options to work from home as needed—perhaps even adjusting the normal work day to a 5 – 6 hour day.
TREND 4 – Gig Workforce
An even bigger challenge is going to be the emergence of the Gig Workforce. It’s not really new but according to Freelancing in America more than 55 million Americans do freelance work, and 79% of them prefer freelance work to a traditional job.
Considerations: To attract and retain the gig workforce, you’ll need to make shifts in how you handle these freelancers all while staying in compliance with the laws around employee versus contractor. An added complication can be determining whether this individual is truly a contractor, or should they be classified as an employee. It’s a fine line and the Department of Labor has been watching closely.
TREND 5 – Tight Labor Market
The labor market continues to get tighter and tighter. It is becoming more and more challenging to find talent let alone technical talent (STEM). Plus, a tight labor market means it is a candidates market and candidates know it.
Considerations: Companies will need to continue to partner with education institutes to develop candidates with these skills. They will also need to be willing to grow the skills internally rather than expecting to find them on the street. In addition, companies will need to begin focusing on the candidate experience. It will be critical to break down the journey a candidate may take from beginning to end with your organization and ensure it is very positive in the eyes of the candidate. Timeliness will also be critical. If you think a candidate is great, so does someone else. Lastly, hiring is just taking longer, and costing more – from resources to the time to fill. Keep an eye on your metrics, so you’re not caught off guard.
TREND 6 – Return of the Performance Review
In the past, the buzz was to abolish performance reviews. But, guess what? They aren’t going away. The reason organizations were eliminating the reviews was because an annual discussion was not effective, which was no surprise.
Considerations: Discussions with employees on performance and development need to be happening more regularly, at least monthly or quarterly, if not more often. An informal or formal approach to ongoing discussions with employees has to be established. The Millennials (Gen Y & Gen Z) are looking for these regular conversations and the other generations are jumping on the bandwagon. What tools can you provide your managers and how do you hold them accountable for ensuring these regular discussions are taking place?
TREND 7 – Bonuses versus Raises
With a tight labor market and robust economy, wages are increasing too. More and more companies are shifting to a compensation structure of bonuses based on performance over the annual merit raise.
Considerations: Employers are trying to get more creative to handle this increased cost by offering bonuses to employees in lieu of pay increases. For example, an increase of 1 – 4% doesn’t have a huge impact on an employee’s salary on an hourly, weekly or monthly basis. However, a bonus of $500 – $10,000 will have a bigger and immediate impact. To do this, employers need to start with a competitive base pay and then create formal incentive plans to help employees know what they need to do in order to get what amount of bonus.
TREND 8 – Parental Leave
Work / Life benefits continue to be top of mind as well. One of the key ones is “parental leave,” meaning both maternity and paternity leaves. Big or small, we are beginning to see organizations taking steps to offer time off for both mom and dad for the birth or adoption of a child. Some companies are offering very generous plans (i.e. 12 weeks paid) that are the same for both, while others are starting out by offering a paternal leave at a different amount than maternal.
Considerations: To be competitive, what will your organization do with regards to parental leave? While there was a lot of buzz on paid leave in the election, Congress is unlikely to act any time soon. That doesn’t mean your company can rest on its laurels, when so many other companies are stepping up to offer paid leave.
TREND 9 – Compliance Issues
With any new presidential administration, we can expect a great deal of change to workplace compliance such as:
• Fair Labor Standards Act – exempt/non-exempt and overtime requirements
• Paid Time Off – Time off for sick, maternity, and other leaves of absence
• Affordable Care Act
• Equal Pay
• Immigration
Considerations: To effectively help our organizations, we need to stay on top of issues. Some of these changes will be for the good of a company and others may not. Be sure your voice is being heard on these issues by connecting with your local congressman, and pay attention. It seems that changes are happening daily, if not hourly.
Finally, we’ve talked about the customer experience and the candidate experience; both of these are directly tied to the employee experience. We don’t often step back and evaluate the interactions an employee goes through while employed with us. The best place to start is to create a map of the journey an employee navigates including such points as onboarding, expectations, feedback, recognition, communication, growth and development, workloads, and more. Now more than ever, it’s critical to consider what you are doing to keep your current talent.
This is just a sampling of some of the key trends we have in store for us. As HR professionals, it is going to be imperative for us stay alert and informed about the continued changes to our workforce, recruitment, policies, and legalities in order to be competitive and in compliance.
With a new political landscape and continuous changes in our demographics, the year ahead is going to be a rapidly changing year for the HR world. HR is going to have to stay on the forefront of legislative changes and may even need to get more engaged in influencing those changes. Plus, with the continuous evolution of our workforce, what has always worked may not work anymore whether it be recruitment, compensation, or even workplace policies.
So what’s keeping HR up at night and on our toes during the day????
TREND 1 – Retiring Baby Boomers
For years, the work force has been dominated by the Baby Boomers. The masses of Baby Boomers in the workforce have dominated the other generations by sheer numbers. Slowly this is changing. As of April 2016, the Baby Boomers are no longer the largest generation in the workforce as the Millennials surpass them. Currently, around 10,000 Baby Boomers turn 65 every day according to PEW Research. Some Baby Boomers are retiring while others are plunging into their next career.
Considerations: With a mass exodus of Baby Boomers, whether to retirement or a new career, how will your company manage this loss of wisdom, knowledge, and experience? What can your organization do to retain the Baby Boomers at some level to minimize the loss? What steps can you implement to transfer this knowledge to the younger generations?
TREND 2 – Entrance of Generation Z
Welcome Generation Z (born 1991 to present) to the workplace. According to Bruce Tulgan’s research on the “Great Generational Shift,” Gen Zs grew up “over supervised, coached, and constantly rewarded by their parents.” As a result, this generation has high expectations for themselves, their boss and the company. They have a lot of wants and want to know exactly what they need to do to attain those wants including clear goals, precise timelines, and acceptable rewards. While some feel this is the trophy generation where everyone was a winner, truth be told, it was the parents that did not “keep score”, the kids certainly did. They are competitive and they know how to keep score.
Considerations: This generation does not “trust” the system and wants clear goals tied to rewards. HR is going to be challenged to create an environment that will accommodate these workers including new programs such as training managers, creating clear milestones, developing incremental rewards, ensuring open and regular communications, and more. Gen Z won’t be appeased with “if you work hard, here’s where you’ll be in 3-5 years”. They want to see more immediate rewards – next week, next month, 6 months out.
TREND 3 – Workforce Flexibility
To begin with, flexibility in the workplace is no longer a request by moms and/or Gen Xers. Both genders and every generation are looking for workplace flexibility for their own reasons.
Considerations: To stay competitive, organizations will need to figure out how to accommodate these requests for flexibility such as flexible starting and ending times and options to work from home as needed—perhaps even adjusting the normal work day to a 5 – 6 hour day.
TREND 4 – Gig Workforce
An even bigger challenge is going to be the emergence of the Gig Workforce. It’s not really new but according to Freelancing in America more than 55 million Americans do freelance work, and 79% of them prefer freelance work to a traditional job.
Considerations: To attract and retain the gig workforce, you’ll need to make shifts in how you handle these freelancers all while staying in compliance with the laws around employee versus contractor. An added complication can be determining whether this individual is truly a contractor, or should they be classified as an employee. It’s a fine line and the Department of Labor has been watching closely.
TREND 5 – Tight Labor Market
The labor market continues to get tighter and tighter. It is becoming more and more challenging to find talent let alone technical talent (STEM). Plus, a tight labor market means it is a candidates market and candidates know it.
Considerations: Companies will need to continue to partner with education institutes to develop candidates with these skills. They will also need to be willing to grow the skills internally rather than expecting to find them on the street. In addition, companies will need to begin focusing on the candidate experience. It will be critical to break down the journey a candidate may take from beginning to end with your organization and ensure it is very positive in the eyes of the candidate. Timeliness will also be critical. If you think a candidate is great, so does someone else. Lastly, hiring is just taking longer, and costing more – from resources to the time to fill. Keep an eye on your metrics, so you’re not caught off guard.
TREND 6 – Return of the Performance Review
In the past, the buzz was to abolish performance reviews. But, guess what? They aren’t going away. The reason organizations were eliminating the reviews was because an annual discussion was not effective, which was no surprise.
Considerations: Discussions with employees on performance and development need to be happening more regularly, at least monthly or quarterly, if not more often. An informal or formal approach to ongoing discussions with employees has to be established. The Millennials (Gen Y & Gen Z) are looking for these regular conversations and the other generations are jumping on the bandwagon. What tools can you provide your managers and how do you hold them accountable for ensuring these regular discussions are taking place?
TREND 7 – Bonuses versus Raises
With a tight labor market and robust economy, wages are increasing too. More and more companies are shifting to a compensation structure of bonuses based on performance over the annual merit raise.
Considerations: Employers are trying to get more creative to handle this increased cost by offering bonuses to employees in lieu of pay increases. For example, an increase of 1 – 4% doesn’t have a huge impact on an employee’s salary on an hourly, weekly or monthly basis. However, a bonus of $500 – $10,000 will have a bigger and immediate impact. To do this, employers need to start with a competitive base pay and then create formal incentive plans to help employees know what they need to do in order to get what amount of bonus.
TREND 8 – Parental Leave
Work / Life benefits continue to be top of mind as well. One of the key ones is “parental leave,” meaning both maternity and paternity leaves. Big or small, we are beginning to see organizations taking steps to offer time off for both mom and dad for the birth or adoption of a child. Some companies are offering very generous plans (i.e. 12 weeks paid) that are the same for both, while others are starting out by offering a paternal leave at a different amount than maternal.
Considerations: To be competitive, what will your organization do with regards to parental leave? While there was a lot of buzz on paid leave in the election, Congress is unlikely to act any time soon. That doesn’t mean your company can rest on its laurels, when so many other companies are stepping up to offer paid leave.
TREND 9 – Compliance Issues
With any new presidential administration, we can expect a great deal of change to workplace compliance such as:
• Fair Labor Standards Act – exempt/non-exempt and overtime requirements
• Paid Time Off – Time off for sick, maternity, and other leaves of absence
• Affordable Care Act
• Equal Pay
• Immigration
Considerations: To effectively help our organizations, we need to stay on top of issues. Some of these changes will be for the good of a company and others may not. Be sure your voice is being heard on these issues by connecting with your local congressman, and pay attention. It seems that changes are happening daily, if not hourly.
Finally, we’ve talked about the customer experience and the candidate experience; both of these are directly tied to the employee experience. We don’t often step back and evaluate the interactions an employee goes through while employed with us. The best place to start is to create a map of the journey an employee navigates including such points as onboarding, expectations, feedback, recognition, communication, growth and development, workloads, and more. Now more than ever, it’s critical to consider what you are doing to keep your current talent.
This is just a sampling of some of the key trends we have in store for us. As HR professionals, it is going to be imperative for us stay alert and informed about the continued changes to our workforce, recruitment, policies, and legalities in order to be competitive and in compliance.
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