hr megatrends

HR MEGATRENDS

Ron James

In this article, Iwill share withyou seven lensesthat are used toview today’sworld of peopleand work.

Introduction

A trend is a tendency, a direction or flow. It canbe described as a pattern, a style or a prefer-ence, a story-line, a line of development. Amegatrend, of course, is a “big movement” in adirection of driving forces; one that can bringalong with it many underlying themes orevents. I think of megatrends in terms of us-ing different lenses that can help viewers seevarious patterns in the big picture.

In this article, I will share with you sevenlenses that are used to view today’s world ofpeople and work . . . seven different lenses thatall might be used for insights into how to makethe most of changing problems, circum-stances, and opportunities.

Seven Lenses

• First, an historical lens—how the worldof work has evolved in tandem with tech-nology.

• Second, an economic lens—where ex-actly is the business world in this cycle?Is business on the way up or down?What will that mean to employment andworkplace needs?

• The third lens, the future—anticipatingcertain workplace developments in lightof population demographics.

• The fourth, an environment—shaped bymassive forces—forces that, like weath-er, everyone can see and experience, butnot control—yet which to a great extenthelp define the competitive arena.

• The fifth will examine HR Regulatorytrends. Are the regulations a help or hin-

drance to growth? Which way are theygoing?

• The sixth will examine the reading-dietsof HR professionals and look at how theHR media help frame the issues to befaced.

• And the seventh will share, through thelens of our business perspective, a viewof the future of HR and where it mightbe going.

1. Historical Lens—Work and TechnologyDeveloping in Tandem Historical Trends

In examining work through an historical lens,it is clear that the very idea of “work” was bornmaybe 90,000 years ago when state-of-the-arttechnology consisted of bone and stone andfire-hardened wooden tools. Anthropologistssay it was about that time the first human beings discovered that their clan memberscould be more secure and productive werethey all to cooperate and share with one an-other. One can imagine these distant ances-tors organizing and sharing the tribe’s hunting,gathering, and cooking tasks . . . and under-stand how, ever since those earliest times, theconcepts of community and work have beentwin siblings.

As cities and towns came into being, tradewas concentrated in marketplaces and shops,and production in places like smithies, pot-tery-works, and granaries. Excavations atplaces such as Pompeii show that trades andcrafts people lived in quarters behind theirshops and workrooms.

Writing, arithmetic, and geometry arosefrom practical needs like surveying and laying

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out fields, recording grain sales, or buildingcanals. And disciplines like metallurgy, pot-tery-making, and textile-weaving gave rise tocraft guilds which were formed not only to reg-ulate markets, but to codify all kinds of knowl-edge and pass it on from one generation to thenext. When the guilds were at their height inthe Middle Ages, the specialties had becomeso differentiated that there were more than100 guilds in large towns.

Yet for all this growing complexity, twothings were constant the whole world over:

• First, from the beginning of time—whether in the wild, on the farm, or in thecities—almost all work was done by hand.

• Second, the individual worker or crafts-person usually performed all operationsin connection with the making of a sin-gle product or service.

In the craft tradition, work was organized asshifting clusters of tasks that could be carriedout in a variety of locations, according to aschedule set by the sun and seasons and theneeds of the day.

All that changed around 1785 with theinvention of the Cartwright power loom—adevice which more than any other was a har-binger of things to come in the Industrial Rev-olution. The Cartwright power loom was the18th century’s equivalent to the Intel micro-chip. It was high-tech.

It was also social dynamite . . .

. . . because it replaced the skilled hand laborof thousands of people with a mechanism sosimple and reliable that a big mill could be runwith just a handful of unskilled women andchildren. All one had to do was hitch the loomto steam—or to cheap, perpetual waterpow-er—and it was possible for production to hap-pen 24 hours a day throughout the year.

Huge fortunes were made as the Cart-wright loom put high-quality, affordable cot-ton fabric within reach of the masses andtransformed parts of rural England into a mon-ey machine that was the envy of the world.

Not everyone was happy, though. There’sno doubt that the condition of the early textilemill workers, especially the women and chil-dren, was miserable. Working conditions havebeen described as dirty, smelly, unsanitary, and

physically dangerous. Work in the new millswas very different from what had gone before.Production had been broken down into manysimple operations or “jobs,” each of whichcould be performed by an unskilled or semi-skilled worker. A “job” typically involved tend-ing to or feeding some machine in an endlessseries of simple, repetitive, mind-numbingmotions. Women and children were given somany of the jobs in the early textile mills be-cause their small hands and manual dexteritywere valued more than experience.

For laborers accustomed to a hand-crafttradition and to rising and retiring with thesun, factory labor was a harsh adjustment.Their lives were now regulated by mechanicaltime-clocks, and they were working like ma-chines up to 16 hours a day. As the industrialera unfolded with its emphasis on machines,assembly lines, and mass production, laborwas commoditized . . . and workers tended tobe treated as interchangeable parts, as exten-sions of machines.

The people who were most unhappy, how-ever, were those who did not have the jobs—the handicraftsmen who’d been put out ofwork by the new mechanized technology. In1812 masked men called Luddites beganbreaking into the textile mills to smash thelooms and spinning jennies that were replac-ing them. The authorities reacted in much thesame way as they might go after terrorists to-day; the Ludds were shot, hanged, banished,or otherwise silenced; and ever since then,there has been a running battle between thosewho believe in technology as a net creator oras a net destroyer of jobs.

In the 1930s, factory automation wasblamed for the long dole lines of the Depres-sion and today, modern-day Ludds are sayingthat information technology, “unlike any tech-nology before,” is systematically eliminatinghuman labor from the economic process.Computers and robots—together with newforms of business reorganization and slash-and-burn management techniques—are saidto be destroying more jobs than are created.

History is full of predictions that new ma-chines will cause mass unemployment, but ifthe experience of history is any guide, employ-ment and living standards have risen becauseof technology, not in spite of it. In fact, overthe past two centuries of huge technological

454 • HUMAN RESOURCE MANAGEMENT, Winter 1997

The Cartwrightpower loom wasthe 18th centu-ry’s equivalent tothe Intel micro-chip.

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The informationage, like everytechnology revo-lution before,will, on thewhole, create atleast as muchwork as it de-stroys; and thenew work willprobably paybetter, too.

advances, employment and real incomes inrich industrial countries have risen almostcontinuously.

Most economists attribute 50 to 60% ofeconomic growth to technological innovation.Seventy percent of the computer industry’srevenues come from products that did not ex-ist just two years ago. Technology, or know-how, embodied in devices and people, hasbecome the most important factor of produc-tion. Economies have limited amounts of cap-ital and labor. Growth can be sustained onlyby finding better ways to use the planet’s lim-ited resources.

The information age, like every technolo-gy revolution before, will, on the whole, createat least as much work as it destroys; and thenew work will probably pay better, too. Someworkers and firms will indeed be displaced justas others have been over the past 200 years. Asblacksmiths disappeared, car mechanics tooktheir place. Consider the fact that in 1900 thesecond-largest group in the work force afterfarm workers was live-in servants? Servantswere considered as much a “law of nature” aswere farmers. Census categories of the timedefined a “lower middle class” household asone employing fewer than three servants.

Yet few people today point with alarm tothe depletion of servants’ numbers in the workforce. Time has marched on, and those whomight otherwise have been domestic servantsare engaged more productively elsewhere inthe economy. Since the first days of the In-dustrial Revolution, manual labor has beensteadily replaced by machines and fossil fuels.

The technologically advanced parts of theworld are on the threshold of a new era inwhich the machines have become very smartindeed, and information technology will per-vade the workplace as never before. Knowl-edge will steadily replace fossil fuels as a prod-uct component. Nothing will replace work andthe central role of human skill, learning, andcreativity in the creation of wealth, but it maybe the end of the job . . . not because work isgoing away, but because work is likely to bestructured much differently in the Informa-tion Age.

Since the days of the Cartwright loom, themain organizing metaphor for the workplacehad been the machine. Tasks were minutelysubdivided into “jobs” that could be performed

by unskilled workers—workers who, accord-ing to the prevailing wisdom, could be em-ployed as interchangeable cogs in the produc-tion machine. The Machine Age, however,ended somewhere in the mid-1980s, and withit has gone the machine metaphor. It is beingreplaced with a new organizing metaphor—the electronic network—which turns the old“wisdom” inside-out. Thanks in part to net-worked computers, inexpensive telecommuni-cations, and the expanding use of e-mail andthe Internet . . . telecommuting, mobile work-ers, the distributed workplace, and “learningorganizations” became more common. In to-day’s competitive, hyper-fast-changing worldmarketplace, the new operating imperativeshave become flexibility, versatility, and light-ning-fast response.

To meet these challenges, business strate-gists are applying network principles to manyaspects of business organization . . . andstrategic partnering, flexible staffing, virtualorganizations and outsourcing have really“taken off.” Last year, for example, UnitedStates’ businesses spent more than $100 bil-lion on outsourcing, and that’s growing by 35%a year!

And as is well known, it is the same storyin HR. Strategic partnering, outsourcing,virtual organizations, and other network-inspired solutions are providing worldwide,anytime access to world-class HR resources ofmany kinds of Human Resource InformationSystems (HRIS) integration, to state-of-the-art financial and tax transaction, to 401(k) in-vestment assistance and benefits administra-tion, to career counseling and personal crisisintervention.

Some organizations are now taking sup-port functions such as human resources and,instead of carrying them as overhead, are cre-ating varying types of charge-back processeswhereby line operations pay for HR services asthey are actually used.

As more bureaucratic functions are com-partmentalized and outsourced, the individu-als on the human resource staff who remaintend to be the generalists who can move fromtask to task and tie everything together. Inmany work disciplines, it appears businessmay be returning to something like the oldhandcraft tradition that existed before theCartwright loom—one in which the basic unit

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of production is no longer the “job,” but the in-dividual worker—the knowledge worker.Knowledge work is replacing the unskilledjobs of the Machine Age.

2. Economic Lens—Prosperity and a NewOrganizing Metaphor

Since the late 18th century, there have beenfour long waves in the global economy, eachone about 55 years long, and each one pow-ered by successive waves of innovation.

• The first long wave, from the 1770s tothe 1830s, introduced iron manufactur-ing and the steam power and first ma-chines that drove the Industrial Revolu-tion;

• The second wave, from the 1830s to the1890s, produced the railways and steam-ships that enabled worldwide exploita-tion of fossil fuels and other natural re-sources;

• The third wave, from the 1890s to the1940s, brought us mass production,electric power, the telephone and radio,automobiles and chemicals;

• The fourth wave, from the 1940s to the1990s, was fueled by cheap oil, highwayconstruction, and the car. The big inno-vations of this period include pharma-ceuticals and electronics—most notablytelevision and computers;

• The fifth wave, beginning now, will bepowered by advances in microelec-tronics, communications, biotechnolo-gy, nuclear energy, and air transpor-tation.

These upwave periods (between 1940 & 1968,and 1884 & 1912, 1828 & 1856, 1772 &1800) are known historically as times of in-vention, technological breakthroughs, and in-creasing rates of growth. The U.S. is now en-tering a period of recharge and recovery. Mostbusinesses have adjusted to the harsher busi-ness environment. They have cut costs and in-creased efficiency. The U.S. is now the mostcompetitive industrial nation on earth. Japan,the toughest competitor just five years ago,has been mired in recession since 1993. Econ-omists have identified the curious fact that

technology breakthroughs and basic inven-tions tend to cluster in the troughs of the longwave.

While the next decade will likely bringcontinued pressure for businesses to reducecosts, time, and labor; the greater opportunityis that these recovery years will provide richsoil for invention, creativity, and entrepre-neurship. The next decade will see less em-phasis on downsizing and belt-tightening ascorporate resources are refocused on revenuegrowth and value enhancement.

One of the more interesting things visibletoday is that value in U.S. corporations isshifting from what companies own to whatthey know. Traditional accounting methods,however, are not up to the task of measuringthe value of, for example, a company’s cus-tomer service culture, or its ability to avoidregulatory problems, or its human capital forthat matter. There appears to be a trend wellunderway to demonetize values and measurethem in other ways.

“Everything has a price” is shifting to“everything has value,” which is why the in-vestor relations people in our companies arereceiving more and more requests for nonfi-nancial information such as product and ser-vice quality, brand preferences and loyalty,market share, and customer satisfaction. It isalso why a handful of pioneering organizationshave been developing new systems for intel-lectual capital accounting—systems to mea-sure the competitive value of an organization’stalent, knowledge, and capabilities as careful-ly as it would manage its cash . . . and why oth-er pioneering organizations have been devel-oping performance management systems thathelp companies to tap into the potential oftheir human resources.

A central defining fact of this age is thatplunging technology prices are enabling In-formation Technology (IT) to be diffused intothe workplace faster and more deeply than anytechnological innovation in history. Comput-ers have now long been used to help cus-tomers eliminate suffocating bureaucracy and“administrivia.” In the next decade, however,IT will be used in dramatic new ways to en-hance creativity, productivity, and quality—and competitiveness.

The next decade will bring more sophisti-cated telecommunications and networked


The next decadewill see lessemphasis ondownsizing andbelt-tighteningas corporateresources arerefocused onrevenue growthand value en-hancement.

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Through the lensof the demogra-pher, seven dra-matic changes inU.S. workplacesand the generalpopulation canbe observed.

databases, expert systems, automated pro-cesses, and HRIS integrated into company-wide performance networks that improve thequality of decisions, coordinate productivity,and optimize individual and team perfor-mance at all levels.

Performance networks will become a pri-mary tool of the HR executive for managingcorporate culture and optimizing a company’shuman resources. Performance networks willhelp companies to catch the upwave sooner byproviding performance shortcuts and technol-ogy-based efficiency tools. They will functionas a touchstone or virtual town square that fa-cilitates performance through teams, sharedlearning, consensus-building, commitment, andother social processes.

Performance networks will connect peo-ple and resources through better communica-tions and coordination, and promote higherlevels of quality and innovation through betterlearning systems and motivation. Performancenetworks will become a primary tool of the HRexecutive for stimulating the growth of a learn-ing community . . . a learning community thatincludes not only a company’s employees, of-ficers, and directors, but its customers, aswell.

3. Demographic Lens

Demographics is so important because it is oneof the most accurate forecasting tools avail-able. For example, because the number ofteenagers reduced in the 1980s, forecasterswere able to predict with great certainty thattoday there would be less young workers intheir 20s and, ten years hence, less workers intheir 30s.

Through the lens of the demographer, sev-en dramatic changes in U.S. workplaces andthe general population can be observed.

1. An Aging Population of Workers. The popu-lation is getting older mainly because of (a) the1946–64 Baby Boom (who now make onethird of the U.S. population), (b) the 1965–75Baby Bust (only one sixth of the population),and (c) advances in health care (which helppeople to live longer).

The median age of the work force is in-creasing: in 1970 it was 28; today it is around

35; and by the year 2000 it will have risen to40. As middle-aged and older workers becomethe core of the work force, younger workerswill become more scarce. Circumstances willcompel companies to change their practice offorcing older, higher-paid workers out of theranks. The skills and knowledge of older work-ers will assume more value. Companies mustacknowledge the motivations of aging workersand develop ways for older workers to stay inthe work force longer—ways such as flexiblescheduling, skill-upgrade training, and eldercare.

2. More Women Working. According to someobservers, the changing role of women is themost significant social change of the 20th cen-tury. For the last decade, nearly two thirds ofnew entrants to the work force have been fe-male. Women will approach half the workforce by the year 2000. Dual-income familieswill have grown from 55% in the late 1980s to75% by the year 2000. More than half of allmothers work—even those with young chil-dren.

“Glass ceilings” notwithstanding, womenare moving up within their organizations. Be-tween 1975 and 1985, the number of womenprofessionals and managers increased by 77%,while the number of males in those rolesincreased by only 6%. Companies must recog-nize that women with diverse family structuresand responsibilities are a more important partof the labor pool. What is needed is a reformof workplace policies to insure that womencan participate fully in the economy, and thatmen and women alike will have the time andresources needed to invest in their children.

3. More Racial/Ethnic Diversity. The generalpopulation is already very ethnically diverseand becoming even more so. By the year 2050,one half of the U.S. population will be ofAfrican, Hispanic, Native American, or Asianancestry.

In the workplace, too, great demographicchanges are taking place. In the past, whitemales were the dominant and visible majorityin the workplace; and blacks, Asians, and His-panics were the visible minority ethnic groups.Today, many more cultural groups are repre-sented, and there is a proliferation of culturalbackgrounds at work. Many culturally rooted


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values, work ethics, norms of behavior, and ex-pectations are brought together. The challengefor corporate managers is to integrate, not as-similate, this diverse mix into the workplace.

4. An Increase in Immigrant Workers. It is astriking fact that the United States, which hasonly 5% of the world’s population, takes in al-most 50% of the world’s migrants (excludingrefugees). Legal immigrants account for overone third of U.S. population growth. Eachyear about 500,000 immigrants come legallyto the United States, and an estimated600,000 to 1.5 million come in illegally. Mostlegal and illegal immigrants who have arrivedover the last 20 years are from Third Worldcountries in Central and South America, Asia,and the Middle East. Unlike earlier times, to-day’s immigration waves wash over the entirenation, bringing foreign-born workers to virtu-ally every U.S. community, large and small.

In the next decade, half or more of allworkers entering the labor force will be immi-grants or the children of foreign-born familiesthat arrived after the mid-1960s. With moreimmigrants in the workplace, organizationswill be challenged (by diverse cultural expec-tations, educational backgrounds, and linguis-tic issues) to productively match people withjobs which require more advanced technicaland communication skills.

5. More People With Disabilities Are Working.The mainstreaming of workers with disabili-ties will become even more important as busi-nesses are affected by the shrinking of the tra-ditional work force, a slower rate of labor forcegrowth, and an increase of nontraditional en-trants to the work force. Federal law requirescompanies that have 50 or more employees orfederal contracts over $2,500 to provide equalemployment opportunities to persons with dis-abilities. Under the 1990 Americans with Dis-abilities Act (ADA), discrimination againstphysically or mentally handicapped workers isbanned in the hiring and promotion processand requires companies to make “reasonableaccommodations” for disabled employees. Aspeople with disabilities increasingly become apart of the work force, companies will makesuch accommodations with regard to the workenvironment, tools, and equipment used onthe job, or to the nature of the job itself.

6. An Increasing Gap Between Highly Educat-ed Workers and People Who Cannot Read orWrite Well Enough to Hold Simple Jobs. Withmore people completing high school, going tocollege, and entering continuing educationprograms, the U.S. currently has the mosthighly educated work force in its history. Six-ty-five percent of all Americans ages 20 to 24have been exposed to some form of postsec-ondary education (compared to 31% of theFrench and 30% of Germans). Jobs requiringcollege degrees will increase from 22% to 30%by the year 2000.

At the same time, the number of less edu-cated people in the workplace is increasing. Ifone defines literacy as the ability to write,think systematically and logically, and speakwith clarity and precision, 30% of all U.S.adults are functionally illiterate; and the skillsand education of older workers are increas-ingly out of sync for jobs that require comput-er skills or other advanced knowledge. Abouthalf of U.S. workers lack the skills for jobs inthe next century.

The picture for youth is even more alarm-ing. The high school drop-out rate is now over25%. Older workers, while lacking currenttechnological skills, have a good basic educa-tion. They may be easier to teach new skillsthan are illiterate youth. While retraining old-er workers may be a cost-effective short-termsolution, it only delays the problem of how tosupport an aging population with fewer pro-ductive younger workers.

In the move into the next century, thehigher-educated end of the spectrum is likelyto be a seller’s market, while the less educatedwill struggle to find jobs—as jobs require evermore advanced skills.

7. Employees’ Values Are Becoming More Per-sonal and Divergent. In today’s workplace,persons with widely differing values oftenwork side by side; managers must be carefulnot to make generalizations that might be in-correct—for example, not all older workershave traditional values, not all younger work-ers have “new age” values. When managersunderstand the values in a particular workforce, they can better motivate and reward em-ployees. And when they understand the reali-ties of the business environment, they can bet-ter guide the organization and set its priorities.


In the move intothe next century,the higher-edu-cated end of thespectrum is likelyto be a seller’smarket, while theless educated willstruggle to findjobs—as jobs re-quire ever moreadvanced skills.

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One of the mostimportant waysthat businessleaders can maketheir organiza-tions more com-petitive in theseturbulent times isto help influencereform of themyriad of regula-tions governingthe employmentrelationship andworkplace.

This understanding is why the next lens—keeping track of what professionals in HR arethinking about the external environment—isso important.

4. Environmental Lens—How HRProfessionals See the “Lay of the Land”

Last year, the Society of Human ResourcesManagement (SHRM) (1996) convened apanel of experts who, through repeated roundsof written surveys and feedback, reached con-sensus on the six megatrends they say will bemost critical for HR to deal with in the nextdecade:

Globalization. In the 1960s, a mere 6% of theU.S. economy was exposed to internationalcompetition. In the 1980s, this numbertopped 70%, and in the ’90s it’s presumablyhigher. All businesses need to become moreculturally sensitive and attuned to commercewithout borders.

Technology. As discussed earlier, informationtechnology is being diffused into the work-place faster and more pervasively than anyprevious innovation. Technology develop-ments will result in higher productivity, moretechnology training, and flatter organizations.

Change. Because everything is moving so fast,it is hard for businesses to rely on their as-sumptions and plans. Flexibility and nimble-ness are the names of the game.

Knowledge Capital. Companies are increas-ingly being valued more for what they knowthan what they own. To build value in the in-formation age, managers need to developstrategies for building “knowledge capital” intheir succession planning, management de-velopment, and customer service activities.

Speed in Market Change. The speed in mar-ket change will encourage more organizationsbased on networks of alliances and partner-ships, rather than self-sufficient hierarchies.

Cost Control Orientation. Expect managers’current fixation on cost control to continueinto the next decade.

For HR professionals, some of the impli-cations of these trends are:

• that in The Changing Nature of theWorkforce, it will be an increasingly dif-ficult task to hire and retain the best andbrightest young workers; companies thatare able to value and use their diversity,who are willing and able to compete forhuman resources on a worldwide basis,will have a distinct competitive advan-tage;

• that in The Changing Nature of Society,businesses will come under increasingpressure to maintain a more flexible, fam-ily-friendly work environment that helpsemployees with their childcare dutiesand health care needs, and that helpsemployees cope with stress and person-al problems; and

• that in The Changing Nature of theWorkplace, leaders are needed who canguide their companies through turbulentchange, inspire innovation, and stimu-late entrepreneurship and workplace ini-tiative through communications, teams,and individual empowerment.

One of the most important ways that busi-ness leaders can make their organizationsmore competitive in these turbulent times isto help influence reform of the myriad of reg-ulations governing the employment relation-ship and workplace.

5. Regulatory Lens

One need only look at unemployment in Eu-rope to see the stultifying effect of laws andhabits that render labor markets inflexible andmake it too expensive to employ people. At atime during which U.S. unemployment hasbeen below 6% since the summer of ’94 and isnow below 5%, European unemployment hashovered around 11%. Eighteen million Euro-peans are jobless. Long-term unemployment isworse in Europe, too, where more than 40% ofthe unemployed have been out of work for overa year, compared with 11% in America.

Even so, some much-needed changes arenecessary in U.S. laws and regulations affect-ing the workplace, compliance, and the em-


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ployment relationship in order to be competi-tive in a worldwide arena.

Washington’s public policy direction inthe HR area can be summarized as initiativesto ensure flexibility, portability, and employa-bility for American workers.

Flexibility. HR issue number one on the newCongress’s agenda will be reform of the 1938Fair Labor Standards Act (FLSA). Amend-ments to the FLSA are being proposed that,taken together, would amount to a much-needed overhaul that would ease employercompliance burdens and help accommodate a diverse work force. H.R. 1, the WorkingFamilies Flexibility Act, would allow employ-ers to offer nonexempt employees the choiceof taking time off at time-and-a-half instead of monetary compensation for overtime hoursworked. Expect it to become law in some form.

Other proposals would modify regulationsconcerning:

• the 40-hour work week to allow for moreflexible scheduling for employers andemployees;

• authorizing employers to make incentivepayments without affecting the “regularrate” calculation for overtime; and

• redefining the current white-collar ex-emption (since today’s so-called whitecollar workers do not fit into the jobcategories created in the 1930s and1950s).

The next-biggest HR issue for the 105thCongress is probably the question of retire-ment income security. Congress knows thatthe Medicare and Social Security trust fundsrisk insolvency, and employer groups such asthe Business Roundtable and National Associ-ation of Manufacturers recognize that the pay-as-you-go system cannot survive the downwardbirth rates and the upward trend in life ex-pectancy. They are offering reform principlesthat will encourage greater individual respon-sibility for retirement savings and security. Forexample, tax deductibility of all or part of em-ployee contributions to IRAs would boost re-tirement savings, as would higher deductibili-ty limits for employee 401(k) contributions.

Unfinished business from the 104th Con-gress includes the Teamwork for Employees

and Managers (TEAM) Act, which wouldmake it clear that employee involvementteams and other cooperative workplace initia-tives are lawful under the National Labor Re-lations Act. Although this is obvious to HRmanagers promoting teamwork and to themore than 30,000 teams across all industriesin the U.S., the National Labor RelationsBoard (NLRB) has acted in recent years tobreak up teams at a number of companies. TheNLRB’s view is that employee teams can vio-late the Depression-era prohibition againstemployer-dominated labor organizations orcompany unions. As a result, many employeeteams exist in a legal limbo, uncertain ofwhether they are subject to legal action on thebasis of an outmoded provision of law.

Both the House and Senate approved theTEAM Act last year, but, at the urging of theAFL–CIO and other labor unions, PresidentClinton vetoed it. Now that the election yearis over, the TEAM Act stands a better chanceof being signed into law.

Portability. Senate Democrats will introducean omnibus pension bill this year that will in-clude legislation to increase the portability ofretirement contributions. It would create anonprofit, private corporation chartered byCongress to act as a clearinghouse for 401(k)contributions. Because the pension fundwould be managed by a separate corporation,employers would have no pension obligationto former employees. Employees would re-main in the plan even if they changed jobs.With a more mobile work force and the role ofSocial Security changing, portability of de-fined contribution plans is key to ensuring ad-equate retirement savings.

Employability. If education is the cornerstoneof a meaningful career, continuing educationis the keystone for employability. That is whyPresident Clinton wants to guarantee all highschool graduates the opportunity to enroll inthe “13th and 14th grades” of community col-leges, and why he wants families to be able todeduct the costs of job training and postsec-ondary education up to $10,000 per year. Heintroduced both proposals as part of his bud-get submission to Congress. Preliminary indi-cators are that the recent bipartisan agree-ment to balance the budget by the year 2002


HR issue numberone on the newCongress’s agen-da will be reformof the 1938 FairLabor StandardsAct (FLSA).

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We see a new fo-cus by CEOs on“human capital”management

includes provision for President Clinton’s ed-ucation and training tax incentives.

Compliance. In any event, it does not appearthat compliance will be any less complicated atask for employers—though technology maymake it easier to automate or outsource. In thepayroll processing and tax-filing businesses ofour company, we at Ceridian are moving for-ward in helping our customers to comply withthe federal government’s Electronic FederalTax payment System (EFTPS) mandate. Livepayments under the new system began in mid-March and we have already helped customersimprove the timeliness of their tax filings andrelieved their HR or payroll functions of anonerous administrative burden. Because weare spearheading so many uses of technologyto eliminate “administrivia” in the HR func-tion, as a company we must devote ourselvesto the continuous monitoring of developmentswithin the professional Human Resource field.

6. HR Media Lens—How the IssuesAre Being Framed

One of our Ceridian lenses for doing this is tomonitor what those in HR media are writingabout. One of our consultants did an analysisof the content of stories printed over the last5 years in the HR press. I share this analysisbecause it is so interesting to see the majorthemes that the media are using to frame theissues:

36.8%—“strategic business partner” (in-cludes strategic planning, reengi-neering, benchmarking, best prac-tices)

30.0%—cost reduction (includes downsizing,outsourcing, automation, manpowerplanning)

11.0%—HRIS (includes multimedia, com-puters, kiosks, HRIS evaluation, voiceresponse, client-server)

9.5%— quality (includes evaluation & as-sessment, customer service)

9.0%— work-force planning (includes hir-ing, performance appraisals, needs-based planning, temporary help)

3.8%— diversity (includes employee rela-tions, affirmative action, EEO)

7. HR Activity As Seen Through Ceridian’sExperience

The main way we at Ceridian watch develop-ments in the professional Human Resourcefield is, of course, through the day-to-day op-erations of our Human Resource businesses.The following are five human resource mega-trends we see through our lens of experience:

“Human Capital” Management. We see a newfocus by CEOs on “human capital” manage-ment—after more than two decades of down-sizing and reorganizations have left manycompanies weaker than before, corporateleaders have awakened to the fact that skilledand knowledgeable people are what mostcounts for competitiveness in the InformationAge. With this new focus comes a need fornew systems for measuring, managing, andoptimizing the value of a company’s humancapital and improving the quality of decisionsat all organization levels. Also needed are newapproaches to compensation, benefits, andemployee motivation such as pay-for-perfor-mance, gainsharing, and team incentives.

Continuing Competitive Pressure to ReduceCosts and Time. We see continuing competi-tive pressure for businesses of every kind to re-duce costs and time. The need to eliminate un-productive administrative activity is universal,and it is well-served by payroll processing andtax-filing businesses which free internal peo-ple for more important and productive tasks.Spiraling increases in health care and workers’compensation also require more effective costmanagement efforts. In the coming decade wesee increased use of contingent workers, out-sourcing, partnering, virtual organizations,and other network-inspired HR solutions.

Work/Family Balance. We see work/family bal-ance as the new imperative for productivity im-provement. Workers whose lives are torn be-tween conflicting priorities suffer higher levelsof stress and tend to underperform. At work,time and energy are used for worry, procrasti-nation, and unproductive effort. In their per-sonal lives, those who are torn by conflictingpriorities tend to have higher rates of illness,suffer more family problems, emotional prob-lems, substance abuse, credit abuse, and worse.


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They can be difficult or unpleasant to workwith—and, on rare occasions, even violent.

The financial impact on corporate Ameri-ca of problems like these is staggering. Sixty-eight billion dollars in productivity are losteach year due to absences alone. The averageworker misses 3 to 5 days of work a year dueto family problems. Stress claims cost up to10% of companies’ earnings. Close to 20% ofmanagement time is spent resolving personal-ity conflicts in the office—and on and on.Helping employees with work–life balance isthe new ideal in employee relations.

Greater Need for Broad Access to HR Data. Wesee a higher priority on HR leverage which ac-celerates the need for broad access to HR databy managers and employees alike. The perfor-mance imperatives of the late 1990s have ush-ered in an era of new strategic thinking aboutoptimizing human resources, and state-of-the-art HR information systems facilitate betterplanning and decisions in personnel selection,development, and promotion.

HRIS make it easier to track the true costsof total compensation including payroll, ben-efits, and incentives. These systems track em-ployee history, career path, and training/development milestones. They help analyze la-bor distribution, insurance experience, etc.

Technologies such as interactive voiceresponse, touch-screen service kiosks, andgraphical PC-based access systems are en-abling the creation of “self-service” platformsthat help HR get off the administrative papertrail and onto more strategic paths. Self-ser-vice systems give employees responsibility forthe accuracy of most of their personnel data.

HR Executives Need To Be More TechnologySavvy. HR executives need to be more tech-nology savvy in order to take advantage of notonly the cost savings that technology canbring, but the productivity growth, as well. Incompanies of any size the largest capital bud-get is usually the IT budget. IT is usually theonly domain that bridges all other functionalareas. Yet amazingly, many chief executiveshave little involvement in IT management.Why? Here are some of their reasons:

• “I’m too old for this stuff.”

• “It’s too complicated.”

• “I have a CIO.”

Many managers fail to understand the po-tentials of technology because they think of itin terms of solving the problems they have to-day. They think in terms of automating exist-ing, outmoded procedures that really ought tobe replaced. The clumsy nature of the proce-dures themselves prevent the computers frommaking much difference. The great potentialof technology is to replace what exists withsomething different and fundamentally better.

Summary

After looking through these seven lenses—his-torical, economic, demographic, environmen-tal, regulatory, media, and the lens of Ceridi-an’s experience—we in HR are still faced withthe basic question: “How can I anticipate thefuture and best prepare?” As leaders withinour companies, I think the most importantthing we can do is to help cultivate a learningculture for ourselves and our co-workers. Suc-cess in the Information Age will be linked to afirm’s ability to manage, develop, and leverageits knowledge resources.

The London Business School’s CharlesHandy says that by the estimates of manyCEOs, a company’s intellectual assets are typ-ically underutilized by 80% and that no exec-utive would allow a factory or cash to remainsimilarly idle. Learning organizations will bethe factories of the Information Age, and we,as HR professionals, must all learn how tomake them work. The process begins witheach of us—as individuals. Each of us mustmake a personal commitment to learning inevery aspect of our personal and businesslives. A commitment to learning means learn-ing from mistakes and not expecting new out-comes from the same old errors. It meansmoving on. A commitment to learning meansembracing change, rather than resisting it—making it your friend and partner. A commit-ment to learning means being curious and al-ways open to new ideas and things.

In our personal lives, it means taking timeto read for the pleasure of learning, to see afilm, attend a lecture or play. In our families,it means encouraging reading, understanding,and achievement through involvement withour children. In our communities, it meansdeveloping better connections between par-


Success in theInformation Agewill be linked toa firm’s ability tomanage, develop,and leverage itsknowledge re-sources.

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ents and schools and employers throughschool-to-work programs and other coopera-tive efforts. And in our business organizations,especially for those of us leading the humanresource function, a commitment to learningmeans the active cultivation of learning-driven, high-performance cultures.

For companies to compete successfully inthe coming decade, HR executives need to getserious about integrating traditional HR func-tions with the more contemporary HR roles ofbusiness strategist, change agent, and learningleader. Competitive survival in the comingyears will increasingly depend on the abilityto help shape a performance culture inwhich knowledge management, productivityimprovement, safety, and team learning areeverybody’s responsibility, in which informa-tion sharing is a habit of community behavior.Shared learning, culture change, and perfor-mance management are the coming roles forHR professionals.

I agree with the University of Michigan’sDr. Dave Ulrich, who says HR can and mustbreak away from its bureaucratic past and be-come a “dominant lever” for creating value, in-novation, and delivering results. To do this, hesays HR must find ways to accomplish its nec-essary transaction work (for example, payroll)while focusing aggressively on work that exe-cutes strategy, increases employee contribu-tion, and transforms organizations into highperformance work cultures.

CEOs need to move beyond the kind of“add-on” thinking that keeps them asking HRto mindlessly deliver this or that new bell,whistle, or management fad. We—CEOs, HRprofessionals, line managers, etc.—must alldevelop a longer view. In planning for the fu-

ture, we must aim for where our families, so-ciety, and companies will be, not where theyare now. That is where all those lenses helpout, in taking aim. As Wayne Gretsky says, “Iskate to where the puck is going to be, notwhere it has been.” The strategy necessary fortaking aim, for this longer view, is in investingmore time and resources in the young peoplewho’ll be our knowledge workers a few yearsfrom now. At every level of commerce and so-ciety, young people are literally our wholefuture.

Think of what you could be doing in yourown organizations. More young people areworking today than at any time in the last 50years of all high school juniors and seniors,and about 30% of all 9th and 10th graders, willhave worked part time after school oron weekends. Does your business employteenagers or young adults? Do you employ col-lege interns in your company? Do you have aformal mentor program?

If you were fortunate (as I was) in havinghad work and mentors to provide a foundationfor life’s success, why not pass it along, shareit, with some young person? Isn’t there someappropriate person who needs the advice andsupport of a mentor like you? Some of themost important things you know can probablyonly be learned through observation. Findsomeone with whom you can identify, someyoung person, perhaps, with strengths you ad-mire. Be a mentor, a teacher, to a young per-son somewhere in your organization or com-munity, and if the experience works for both ofyou, that young person will be for you a lenson the future—as you, too, will be a lens forhim or her.


Ron James joined Ceridian as executive vice president of Ceridian and president and chief executive officer ofits newly formed Human Resources Group, effective January 1, 1996. Prior to joining Ceridian, Mr. Jamesserved as vice president–Minnesota of US WEST Communications, Inc. and regional vice president for USWEST, which included responsibilities for Iowa, Minnesota, and Nebraska. Mr. James assumed his position ofvice president–Minnesota in January, 1990 and was named a regional vice president of US WEST in 1992. Hereceived his bachelor of science degree in Business Administration from Doane College in 1971. Mr. James ismarried and has two sons.

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