key workplace trends
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TRANSCRIPT
Key Workplace Trends & Impact to Human Resources
March 18, 2008
Sources
From McKinsey Quarterly, online journal January 2006, “Ten Trends to Watch Davis and Elizabeth Stephanson
From “SHRM Workplace Forecast, 2006-2007” & “SHRM Special Expertise Panels 2007 Trends Update”, http://www.shrm.org/trends/2008WorkplaceTrendsList.pdf
Business Week Survey to 2,000 managers, published August 20, 2007
“Are They Ready to Work? Employers’ Perspectives on Basic Knowledge and Applied Skills of New Entrants to 21st Century US Workforce,” key findings of survey to 400 employers by Conference Board, Corporate Voices for Working Families, Partnership for 21st Century Skills, and Society for Human Resources Management, October 2006.
McKinsey Quarterly – 10 Trends to Watch - Macroeconomic
1. Centers of economic activity will shift globally and regionally
– Currently Asia (minus Japan) accounts for 13% world GDP and Western Europe has 30%+. Within 20 years Asia will catch up.
2. Public sector costs will balloon, requires increase in productivity
– Aging population causes huge outlay for pension & health care.
– Not just developed economies but countries with emerging markets demanding more retirement & health care security.
Macroeconomic trends
3. Consumer spending changes worldwide– Billion new consumers worldwide in next decade
with increase in discretionary spending – $4 trillion to $9 trillion plus.
– Hispanic population in 2015 spend equivalent of 60% of all Chinese consumers.
– Technology will give all consumers info and access to products.
Ten Trends to WatchSocietal and Environmental
4. Technological connectivity transforms way people live.
– 12% newlyweds last year met online, 2 billion use cell phones, billion Google searches a day (more than half not in English), 9 trillion emails a year.
5. Integration of global labor market– 33 million college educated in developing countries– Companies shifting jobs where the talent is and not
just low paying jobs.
Societal and Environmental Trends
6. Behavior of big business coming under increasingly sharp scrutiny.
– Current US ideology not understood or accepted around globe – intellectual property rights, free trade, shareholder value.
– Regulatory backlashes
Societal and Environmental Trends
7. Demand for natural resources and strain on environment.
– Oil demand to grow by 50% in 20 years. Supply can not keep up with demand. Similar demands on copper, steel, aluminum.
– Water shortage
Ten Trends to Watch Business and Industry
8. New global industry structures – Nontraditional business models flourishing
9. Management not an art but a science– Technology and highly sophisticated software
running companies.– Most CEO’s are boomers & impending
leadership crisis is coming. As many as 50% senior managers leaving in next 5 years.
Business and Industry Trends
10. Access to information changing economics of knowledge.
– Google and other online tools allow instantaneous access.
– Open source knowledge, new models of production, distribution and ownership.
– World-wide patent applications rose 20% annually in last 10 years.
SHRM Workplace Forecast – 2006Top Three Themes Overall
1. Rise in healthcare costs
2. Implications of increased global competition
3. Demographic changes, aging of workforce, impending mass retirement of baby boomers at about same time
Demographic Outlook
In 2003, Hispanics became the largest minority group in US
Most population increase seen in ethnic and racial minorities - births and immigrants
Singles outnumber married couples with children
Later age for child bearing
Racial and Ethnic Composition of the Population 1980-2020
Demographic Impact
Aging population – Sandwich generation caring for children and parents– Fewer workers to support Medicare & Social Security
Diversity of workers impacts workforce policies– Flextime, telecommuting & sabbaticals– Training line managers to respond to differences - cultural,
languages, generational, technology – Bringing retirees back into workforce
Economic Outlook
Rise in healthcare costs is most important economic trend
Rise in costs of retiree health benefits & governmental programs
Labor shortage – projected in 2012 will have 21 million jobs and only 17 million new entrants into workplace
Cost of security & war on terrorism causes continued economic uncertainty
Social Outlook
Changing definition of family 24/7 workplace Broadening diversity – religious, ethnic and
cultural Poor educational performance US students Women attaining higher rates of education and
professional degrees versus men Global health issues – HIV, SARS & bird flu,
plus US has highest obesity rate
Percent Households by Type
05
1015202530354045
1970 1980 1990 2000
Married Couples +Children
Married Couples noChildren
Other FamilyArrangements
Men Living Alone
Women LivingAlone
Other NonfamilyHouseholds
Source: U.S. Census Bureau, Current Population Survey, March 2002 Supplement
Science & Technology Outlook
Technology increases communications with employees and potential for monitoring employees
Increased theft of intellectual property and identity theft
Skills quickly become outdated and gap in skills learning – rich vs. poor and young vs. old
E-learning any time & any place– Wearable computer devices
Political Outlook
Focus on Global and domestic security driving political agenda
Health care privacy and portability legislation Increased political partisanship and state reactions
related to the political party in power Increasing grassroots pressures on labor practices Political impact of federal deficit and cost of war in
Iraq Weakening of Affirmative Action - policies tested in
courts
International Outlook
Exporting of US manufacturing & other white collar jobs
Ethnic strife causing segregation of cultures and increased anti-Americanism
English spoken by ¼ of world’s population Spanish is second language of US Development of global labor standards
Employment Outlook
Rising health care costs, continued double digit increase per annum over next 5 years
Employee demand for flexible work schedules & telecommuting
Growth in women and minority owned business Benefits & compensation structured for diverse
population and varied needs Increase in hiring college grads and highly skilled
workers
US Census Bureau, 2004 Supplement
Average all states – educational background– 25.5% have some college– 18.1% have bachelor’s degree– 9.6% have advanced degree
State of Tennessee – educational background– 23.0% have some college– 17% have bachelor’s degree– 7.3% have advanced degree
Measuring Up 2006 – Report Card on Higher Education by National Center Public Policy and Higher Education
In Tennessee 33% aged 18-24 were enrolled in college in 2006
– Compared to top ranking states at 41%– Ranking TN below Korea, Greece, Finland, Belgium,
Ireland, Poland, Australia, France, Hungary, Spain and New Zealand
2006 Tennessee Report Card– Preparation = C- (up)– Participation = C- (up)– *Affordability = F (neutral)– Completion = B (up)– Benefits = C+ (up)
The Value of a College Degree?US Census Bureau, 2004 Supplement
Average all States – avg. personal income– $25,053 with high school diploma– $48,417 with college degree– $70,851 with advanced degree
State of Tennessee - avg. personal income – $21,815 with high school diploma– $43,644 with college degree– $67,986 with advanced degree
For 2008, adjusted for annual 4% increase = $51,056 with college degree
% Change in Number of Jobs by Education Source Projected 2000-2010
0
5
10
15
20
25
30
35
Percent Change
Associate
Doctoral
Master's
Bachelor
1st Prof Degree
Work Exp. + BS
Vocational
Source: Bureau of Labor Statistics
2007 SHRM Workplace Update
SHRM expertise panels look at 13 areas for key trends and changes from previous year
Looks at trends in following areas:1. Corporate Social Responsibility
2. Employee Health, Safety and Security
3. Employee Relations
4. Ethics
5. Global
6. HR Consulting/Outsourcing
2007 SHRM Workplace Updates
7. Labor Relations
8. Human Capital Measurement/HR Metrics
9. Organizational Development
10. Staffing Management
11. Total Rewards/Compensation and Benefits
12. Technology and HR Management
13. Workplace Diversity
Corporate Social Responsibility
Businesses recognize necessity for corporate social responsibility as part of required strategy
Increase in transparency in operations Awareness of gaps between “haves and
have nots” Business impact of Generation Y priorities
Employee Health, Safety and Security
Influence of health insurance costs and new programs – “smokers penalties,” health risk assessments and wellness programs, particularly for diabetes and obesity
Concerns for health information protection and risks of identity theft
Ongoing concerns for communicable diseases and possible pandemic situations
More background and drug tests
Employee Relations
Retention of talent is strategic objective – specific skill sets in short supply
Multi-generational employees see increased employee relations issues
Change in communications (social networks, blogs, etc.) and the new etiquette and ethics required for the workplace
“Islamophobia”
Global
How to manage global talent and have the right talent, particularly in fast growing countries (India, China)
Immigration reform and employee shortages (construction & engineering)
Balancing business needs with US centric versus global centric views
Multiculturalism
HR Consulting/Outsourcing
Changing role of HR due to outsourcing, consulting and global needs.
Small organizations are outsourcing all of HR to Professional Employer Organizations
Greater use of metrics to justify HR costs Specialized niche HR consultants
Labor Relations
Union consolidation and attempt to organize more members in non-traditional areas
Impact of the cost of health care benefits to labor relations
Impact of immigration policy on union organizing efforts
Human Capital Measurement / HR Metrics
Increasing demand to use human capital measures and HR metrics leading to standard sets of measures
Measures that are culturally sensitive and understanding of the various differences in acceptable practices
Increased use of technology for measurements
Organizational Development
Increase awareness of OD and impact on business
Supporting targeted groups (generational, cultural) with specialized development
Organizational performance tied to talent management – ID, develop and retain those with critical KSA
More entry level workers lacking workplace etiquette, emotional intelligence, interpersonal skills
Staffing Management
Looming skills and talent shortage Shifting demographics and use of global talent Increasing use of technology in recruiting Increasing use of assessments for pre-
employment Continued use of metrics but increase in
alignment with business goals
Total Rewards / Compensation and Benefits
Proper oversight and compliance to regulations and increased transparency for executive compensation
Impact of aging workforce on total compensation packages
Risk and cost shifting increase both government to business and employer to employee
Total rewards increasingly using career development and work/life balance issues, and importance of effective communications of all total rewards
Performance management and alignment with total rewards and business strategy
Technology and HR Management
Online social networking Growth of ASP’s and outsourcing technology Real-time web applications – ex. Remote
interviewing, “pulse” surveys Need for closer working relationships
between IT and HR for HR technology Legal issues for use of HR technology, ex.
privacy issues and data storage
Diversity Management
Linking diversity to overall business strategy to ensure commitment
Demographic shifts in workplace and impact to recruitment and retention efforts of HR– Immigration and multi-cultural issues– Aging workforce and multiple generations working– Those with disabilities
Need to address varying religious and spiritual needs of diverse workforce
Are They Really Ready to Work?Study by SHRM, Conference Board, Partnership 21st Century, Corp. Voices Working Families
63% predict a foreign language is important basic skill
Critical thinking 77.8% and creativity/innovation 73.6% are top two responses for increasing in importance
Top three applied skills important to the workplace are professionalism, teamwork and oral communications.
Employers list top deficiencies for college grads – written communications, leadership ability and professionalism.
Actions HR Professionals are Taking in Response to Trends
Training managers to respond to generational differences
Changes in health care policies and plans in response to demographic changes
Changes in policies as response to federal and state regulations
Strategic HR planning and succession planning related to recruiting and retaining diverse employees
Increasing use of technology to perform transactional HR functions, and use of technology for more employee self service applications
Actions HR Professionals are Taking in Response to Trends
Increasing HR’s role in corporate ethics and crisis management
Increasing investment in training for employees and HR staff
Building human capitol factors/metrics into key business transactions & planning to increase productivity to offset higher cost of business
More policies for work/life balance Increase in policies for safety and security
Q & A