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SHRM RESEARCH

SHRM Workplace Forecast The top workplace trends

according to HR professionals

2

SHRM Workplace Forecast THE TOP WORKPLACE TRENDS ACCORDING TO HR PROFESSIONALS

The SHRM Workplace Forecast is

published every two years by the Society

for Human Resource Management.

The structure of the report is based on a

survey of human resource professionals

on the key issues they feel will affect the

workplace in the coming years.

The report is divided into four broad

sections covering demographics and

society, economics and employment,

public policy and law, and science and

technology.

The survey also asks HR professionals

what actions they and their organizations

are taking or are planning to take to

address these trends, changes and

challenges.

3

SHRM Workplace Forecast OVERALL TOP WORKPLACE TRENDS ACCORDING TO HR PROFESSIONALS

TREND MAJOR IMPACT

MINOR IMPACT

NO IMPACT

Continuing high cost of employee health care coverage in the U.S.

79% 20% 1%

Implementation of health care legislation 75% 23% 2%

A shortage of skilled workers 73% 25% 2%

Large numbers of Baby Boomers leaving the

workforce at around the same time 68% 29% 3%

Implications of the outcome of the 2012 [presidential and congressional] elections

68% 28% 4%

Lack of science, technology, engineering and math (STEM) graduates in the U.S. compared to other countries

68% 29% 4%

Decline in employees’ retirement savings 68% 29% 4%

Rise in fuel/gasoline prices in U.S. and globally 68% 28% 4%

Threat of a dip back into recession in the U.S. 67% 30% 4%

Greater economic uncertainty and market volatility 66% 31% 3%

Source: SHRM Workplace Forecast (2013).

4

SHRM Workplace Forecast: health care trends HEALTH CARE COSTS AND LEGISLATION AMONG THE TOP TRENDS

HR professionals have been concerned about the

high cost of employee health care for many years.

Rising health care costs was the top issue in the

Workplace Forecast surveys of 2005, 2007, 2009,

2011 and 2013.

HR professionals rated the implications of federal

health care legislation as the second most

important trend affecting the workplace and the

HR profession in the 2013 Workplace Forecast survey.

5

Health care costs How did your organization’s total health care costs change from last

plan year compared with the plan year before?

72%

19%

10%

74%

17%

9%

Increase

d

Remained

the same

Decrease

d 2013 (n = 366)

Note: Only respondents whose organizations provide health care were asked this question. Respondents who answered “not sure” were

excluded from this analysis. Percentages may not total 100% due to rounding.

Source: State of Employee Benefits in the Workplace—Health Care ©SHRM 2013

6

Health care costs

How concerned is your organization about controlling health care

costs?

83%

16%

1%

0%

84%

16%

1%

0%

Very

concerne

d

Somewhat

concerne

d

Not very

concerne

d

Not at

all

concerne

d

2013 (n = 411)

2012 (n = 437)

Note: Only respondents whose organizations provide health care were asked this question. Respondents who answered “not

sure” were excluded from this analysis. Percentages may not total 100% due to rounding.


7

Health care costs Which of the following activities has your organization engaged in for the

purpose of controlling the costs of health care?

Activity 2013

(n = 417) 2012

(n = 405)

Provided educational initiatives related to health and wellness 45% 52%

Increased employee participation in preventive health and wellness initiatives

43% 44%

Created an organizational culture that promotes health and wellness

41% 45%

Offered consumer-directed health plans (e.g., HRAs, HSAs) 40% 42%

Increased the employee share contributed to the total costs of health care

39% 52%

Provided lower-cost generic prescription or over-the-counter drugs

39% 50%

Provided incentives or rewards related to health and wellness 35% 40%

Changed health care provider* - 3%

Other 7% 2%

Note: Only respondents whose organizations provide health care were asked this question. Respondents whose organizations had not conducted any activities to

control the costs of health care were excluded from this analysis. Percentages do not equal 100% due to multiple response options. An asterisk (*) indicates that

this response option was not asked in 2013.


8

Health care: The Patient Protection and Affordable Care Act In your opinion as an HR professional, what is the biggest PPACA challenge

for HR?

1%

2%

2%

7%

11%

33%

31%

13%

1%

6%

4%

4%

6%

7%

8%

18%

20%

25%

Not applicable; we have not had any challenges as a result of the PPACA

Other

Keeping employees informed about the implications of the law

*Impact on health care plan design

Keeping track of when various parts of the law take effect

Determining impact on future total compensation strategy

The grey areas of the law

*Impact on health care plan costs

Understanding the details of the law

Keeping up with regulations and making appropriate preparations

2013 (n = 746)

2010 (n = 774)

Note: Percentages may not equal 100% due to rounding. An asterisk (*) indicates this response option was not available in 2010.

Source: Health Care Reform—Challenges and Strategies ©SHRM 2013

9

SHRM Workplace Forecast: Talent Shortages FINDING THE BEST EMPLOYEES IS ONCE AGAIN TOP OF MIND FOR HR

Key trends identified by HR professionals:

A shortage of skilled workers

Large numbers of Baby Boomers leaving the workforce at around

the same time

Lack of science, technology, engineering and math (STEM)

graduates in the U.S. compared to other countries

Overall decline in the workforce readiness of new entrants to the

labor market

Lower birthrates contributing to smaller pipelines of talent in

future generations

Decline in the number of foreign students who stay and work in

the U.S.


10

Future HR Challenges

59%

52%

36%

34%

33%

20%

15%

13%

11%

6%

51%

29%

44%

21%

41%

17%

33%

12%

24%

1%

Retaining and rewarding the best employees

Developing the next generation of corporate leaders

Creating a corporate culture that attracts the best employees to our organization

Remaining competitive in the talent marketplace

Finding employees with the increasingly specialized skills we need

Creating smooth and efficient HR processes that ensure a good employee experience

Finding the right employees in the right markets where we do business around the world

Creating an employee-centric, service-oriented HR organization

Breaking down cultural barriers that make it difficult to create a truly global company

Other

2012 (n = 483)

2010 (n = 465)

Over the next 10 years, what do you think will be the three biggest

challenges facing HR executives at your organization?

SHRM Future HR Challenges. © November 2012. Society for Human Resource Management.

11

Future HR Challenges

Over the next 10 years, what do you think will be the biggest

investment challenge facing organizations?

43%

22%

19%

14%

3%

47%

29%

11%

12%

2%

Obtaining human capital and optimizing human capital investments

Obtaining financial capital and optimizing financial capital investments

Obtaining technology and optimizing technological capital investments

Obtaining intellectual capital and optimizing intellectual capital investments

Obtaining physical capital and optimizing physical capital investments

2012 (n = 484)

2010 (n = 449)

SHRM Future HR Challenges. © November 2012. Society for Human Resource Management.

12

Post-recession recruiting difficulty is climbing back up SHRM LINE® RECRUITING DIFFICULTY: MANUFACTURING AND SERVICES

-40.0

-30.0

-20.0

-10.0

0.0

10.0

20.0

30.0

40.0

Jun

-05

Au

g-0

5

Oct

-05

Dec

-05

Feb

-06

Ap

r-0

6

Jun

-06

Au

g-0

6

Oct

-06

Dec

-06

Feb

-07

Ap

r-0

7

Jun

-07

Au

g-0

7

Oct

-07

Dec

-07

Feb

-08

Ap

r-0

8

Jun

-08

Au

g-0

8

Oct

-08

Dec

-08

Feb

-09

Ap

r-0

9

Jun

-09

Au

g-0

9

Oct

-09

Dec

-09

Feb

-10

Ap

r-1

0

Jun

-10

Au

g-1

0

Oct

-10

Dec

-10

Feb

-11

Ap

r-1

1

Jun

-11

Au

g-1

1

Oct

-11

Dec

-11

Feb

-12

Ap

r-1

2

Jun

-12

Au

g-1

2

Oct

-12

Dec

-12

Feb

-13

Ap

r-1

3

Jun

-13

Au

g-1

3

Oct

-13

Manufacturing recruiting difficulty Service sector recruiting difficulty

13

Skills gaps: basic skills In general, what basic skills/knowledge gaps do job applicants have

in your industry?

9%

1%

2%

8%

7%

11%

18%

30%

30%

38%

48%

9%

2%

2%

8%

11%

13%

14%

29%

31%

38%

55%

Other

History/geography

Humanities/arts

Foreign languages

Technical (computer, engineering, …

Government/economics

Science

English language (spoken)

Reading comprehension (in English)

Mathematics (computation)

Writing in English (grammar, spelling, etc.)

2012 (n = 1,928)

2011 (n = 597)

Note: Percentages do not total 100% due to multiple response options. Respondents whose organizations were not having a difficult time

recruiting for certain types of full-time jobs were not asked this question.

Source: The Ongoing Impact of the Recession—Recruiting and Skill Gaps ©SHRM 2013

14

Skills gaps: applied skills In general, what applied skills gaps do job applicants have in your industry?

5%

19%

17%

21%

25%

30%

36%

36%

39%

41%

44%

54%

5%

18%

18%

21%

21%

29%

33%

34%

38%

41%

46%

53%

Other

Ethics/social responsibility

Diversity

Lifelong learning/self-direction

Creativity/innovation

Information technology application

Teamwork/collaboration

Oral communications

Leadership

Written communications

Professionalism/work ethic

Critical thinking/problem solving

2012 (n = 2,168)

2011 (n = 716)




15

Skills gaps: the hardest jobs to fill Specific job categories for which organizations are having difficulty recruiting

72%

68%

78%

86%

85%

88%

83%

68%

70%

77%

83%

85%

86%

88%

Sales representatives

Skilled trades (e.g., electricians, carpenters)

Managers and executives

High-skilled medical (e.g., nurses, doctors, specialists)

High-skilled technical (e.g., technicians, programmers)

Engineers

Scientists

2012

2011




16

SHRM Workplace Forecast: Employee financial concerns RISING LIVING COSTS AND LOW RETIREMENT SAVINGS

Key related trends according to HR professionals:

Underfunded pensions and the stability of the federal Pension Benefit Guaranty Corporation

Decline in employees’ retirement savings

Rise in fuel/gasoline prices in U.S. and globally

Rise in unemployment

Increased cost of living for U.S. employees

Rising retiree benefit costs

Rise in underemployment (job seekers who can only find part-time jobs or employees who are

in jobs for which they are overqualified)

Downturn in consumer spending

Rising higher education costs (impact on graduation rates, debt and availability of educated

workers)

Growth in the generational income divide (impact of higher education and living costs and

slower wage growth on ability of younger generations to save and invest)

Increased global competition for jobs, markets and talent

Employee concerns about job security (impact on turnover, engagement, etc.)

Employee wage stagnation across many types of jobs

Employee backlash against rising benefits costs

Growth in the income divide between high- and low-paid workers

Greater use of contingent workers (i.e., temporary/contract workers)


17

SHRM Workplace Forecast: Employee financial concerns CHANGES IN RETIREMENT BENEFITS

90% 92%

29%

19%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2013

Defined contribution retirement savings plan Defined benefit pension plan

Source: SHRM 2013 Benefits Survey Report

18

SHRM Workplace Forecast: Employee financial concerns TREND IN WORKERS' EXPECTED RETIREMENT AGE

Source: Employee Benefit Research Institute and Matthew Greenwald & Associates, Inc., 1991-2013 Retirement Confidence Surveys

19%

31%

34%

2%

9%

0%

24% 25% 25%

2%

7%

9%

16%

21%

25%

7%

17%

6%

11%

21%

24%

9%

20%

6%

8%

16%

26%

11%

26%

7%

9%

14%

25%

10%

26%

7%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Before 60 60-64 65 66-69 70 or older Never retire

1991 1998 2003 2008 2012 2013

19

SHRM Workplace Forecast: Economic Uncertainty ARE ECONOMIC VOLATILITY AND UNCERTAINTY THE NEW NORMAL?

Related trends identified by HR professionals: Note that several contradict each other!

Threat of a dip back into recession in the U.S.

Greater economic uncertainty and market volatility

Growing national U.S. budget deficit

Increased corporate downsizing and bankruptcies

Rise in unemployment AND Improved U.S. job market

Shift from a manufacturing to an information/service or knowledge economy ANDU.S.

manufacturing revival

Increased use of outsourcing of jobs within the U.S. AND Increased use of offshoring

Increased global competition for jobs, markets and talent

European debt/financial crisis

Business impact of increase in the value of the U.S. dollar

Downturn in consumer spending AND Upturn in consumer spending

Economic growth of emerging markets such as Brazil, Eastern Europe, India and China

Increased expansion of foreign companies into the U.S.

Increased expansion of U.S. companies into the global marketplace

Rise of small businesses as generators of job growth AND Reduction in the number of startups and

new small businesses

Growth of the world's middle class consumers

Rapid turnover and skills shortages in key offshoring destinations such as India, China, Brazil and

Eastern Europe AND Increase in business research and development investment in emerging

economies such as Brazil, Eastern Europe, India and China


20

SHRM Workplace Forecast: Economic Uncertainty Compared to 12 months ago, would you say your organization’s overall

financial health is improving, has not changed or is declining?

Source: SHRM The Ongoing Impact of the Recession Survey (2013).

9%

24%

25%

35%

7%

8%

26%

24%

33%

9%

7%

20%

22%

38%

13%

Significant decline

Mild decline

No change

Mild improvement

Significant improvement

2012 (n = 3,362)

2011 (n = 2,277)

2010 (n = 2,333)

21

Responding to the trends Actions HR professionals are most likely to say they are taking in response to trends

Yes No Plan to

Using social networking sites for recruiting, employer branding and

other purposes 68% 20% 12%

Updating technology use policies for employees (use of social

networking sites, e-mail for nonbusiness use, etc.) 65% 21% 14%

Linking employee performance and its impact on the organization’s

business goals 63% 23% 14%

Changing organizational policy in response to federal and state

regulations 60% 22% 18%

Expanding the use of e-learning 59% 25% 17%

Using nondisclosure and noncompete agreements for intellectual

property 56% 40% 4%

Putting more emphasis on succession planning and people readiness 55% 24% 21%

Changing employment practices to minimize legal risk 54% 35% 12%

Hiring workers (or increasing size of workforce) 53% 37% 11%

Expanding the use of technology-based employee and manager self-

service applications 52% 30% 18%

Source: SHRM Workplace Forecast (2013)

22

Responding to the trends Tactics HR professionals are most likely to say they will use to respond to HR

challenges

4%

14%

11%

13%

15%

11%

21%

40%

29%

23%

47%

58%

7%

11%

11%

13%

14%

15%

17%

17%

24%

24%

26%

26%

37%

40%

Showing commitment to corporate social responsibility and sustainability

Providing employees better opportunities to use skills and abilities

Creating a highly inclusive culture that uses diverse perspectives

Developing human capital managers at all levels of the organization

Providing employees with recognition based on job performance*

Encouraging employees to make decisions and take risks

Offering latest tools/technology to maximize work efficiency and effectiveness

Creating a stimulating and attractive organizational culture

Providing meaningful work with clear purpose in meeting organization’s objectives

Demonstrating a commitment to employee development

Providing employees with opportunities for career advancement*

Offering a higher total rewards package than competitors

Maintaining a culture of trust, open communication and fairness

Providing flexible work arrangements

2012 (n = 486)

2010 (n = 449)

Source: SHRM Future HR Challenges Survey (2013)

23

Questions and discussion WHAT TRENDS ARE HAVING THE BIGGEST IMPACT ON YOUR ORGANIZATION?

Are there other trends not mentioned that you think are having a big impact on the workforce and on your organization in particular? What are they?

What kinds of actions is your organization taking to address some of these key trends?

Are you optimistic or pessimistic about the economy? Why?

Are you optimistic or pessimistic about the future of your organization? Why?

What about the future of the HR profession itself? Are there key developments that you think will influence the profession? What are they?

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