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This Week's Herman Trend Alert

HR in Normal 2.0

  The Herman Trend Alert

January 13, 2016

2016 Workforce/Workplace Forecast

Every year, The Herman Group issues its annual forecast. We hope you will use this information within your organization to reduce wisely and drive more revenue by knowing what is coming.

1. Tightening Labor Markets will mean Intensifying Workforce Shortages.
As we forecasted a year ago . . .as economies have improved, companies have recruited the people they have needed to grow. The result is that workforce shortages have increased. And this trend will increase. . .particularly in financial services, retail, travel, transportation, healthcare, technology. One non-healthcare, representative example, requiring STEM (Science, Technology, Engineering, and Math) background is Operations Research Analyst, an occupation expected to grow by 30 percent, between 2014 and 2024. The solution for some companies will be growing their own. (See #2) Expect to see more people hired as flexible, temporary, or part-time employees who can work from home to help businesses quickly scale staff up, or down in response to changing demand.

2. More Employers Will Focus on Creating Talent Pipelines.
Employers unable to find the talent they need, we finally get the message that they can't recruit the experienced candidates they were hoping for, because they may not even exist! They will finally set aside their reluctance to invest in training and grow their own. We are also seeing more employers working with schools to define what they want/need in a graduate, beginning sometimes years early to identify good prospective employees. One innovative program from Starwood/Marriott recruits Sophomore college students, majoring in Hospitality and Tourism, to work full time, while they attend school full-time as well. That way, they predispose the young people to working for them after graduation. Other employers are creating talent pipelines by going into the schools to educate students on their opportunities and encouraging internships and apprenticeships.

3. Students Lack of Preparation Will Trouble Employers.
Lack of basic literacy and numeracy skills will make recruiting increasingly difficult. Some employers have already resorted to teaching these basics onsite. Though the Gates Foundation and other groups are working with schools to bring them into the 21st Century, most schools are still teaching with 18th Century methods. Those methods are becoming less and less effective. This lack of preparation is a major reason for the high drop-out rate community colleges battle with and is a critical issue for communities everywhere.

4. Many Communities Continue to Struggle with Workforce Development.
Responding to growing shortages of skilled labor, more communities have embraced what author Edward Gordon calls RETAINs (Regional Talent Innovation Networks). RETAINS are public/private partnerships created to respond to the employers' increasing workforce needs, especially for folks with higher skill levels. He reports, "Believing they cannot find the workers they need, some employers have dumbed down the jobs or divided the work among multiple people".

5. The Increasing Effects of Climate Change Will Hit Productivity.
With the floods, tornados, and severe storms the US has experienced, other parts of the world have also suffered with a variety of natural disasters. Employers have found worker productivity diminished and that will not only continue, but increase. Road Warriors, affected by delayed and cancelled flights, will need to find ways to cope with the additional stress of travel. El Nio will increasingly create record-breaking weather. Droughts and flooding will cause more more problems for employees worldwide.

6. Automation and Robotics Will Continue to Eliminate Progressively More Jobs.
We have written about automation in the past and how it is expected to take a toll on many jobs. Almost no one is immune from being affected. Even doctors and lawyers will see their jobs changed or eliminated by automation and robotics. Already, we have robots that can handle delicate surgery more effectively than humans alone and Garry Mathiason of Littler Mendelson (the largest employment law firm in the world) is working on a robotic lawyer. We have already seen many folks turning away from their CPAs and using (often free) software to complete their tax forms. At lower levels, increasingly tech-savvy populations of consumers would rather check out of the grocery store electronically than have a human cashier. Even airline clubs are working with systems where you scan your own ticket to gain entry. Automation marches on.

7. China's Slowdown Will Keep Unemployment Rates There and Elsewhere High.
In the US, we will see a very slow drop in unemployment rates, however we do not expect them to drop below 4.5, though there is an important remaining question about discouraged workers who have dropped out of the labor market. Fueled by continued relocation of production facilities out of the country, China's unemployment will remain high. Around the world, employers looking for good people will continue to face the challenge that many of the people available are simply not employable---either because they lack workforce or life skills.

8. Use of Gamification in Training and Development Will Increase.
We have watched with interest, as some employers have tried to create games that would work for them. Millennials and Gen Zers love to play games. If games are well-designed and include the right intrinsic and extrinsic rewards, they will work. One especially impressive example of gamification that works is the new game Prelude. Designed for remote teams, Prelude bonds teams from diverse geographic and cultural backgrounds by building trust. Requiring three to six hours to play, this effective software gives remote team members valuable insights into each other.

9. Organizations will Focus More on Enhancing the Employee Experience.
Already a number of hospitals have CXOs to focus on improving patient and employee experiences. In the medium- and long-term future, we may expect to see CExOs (Chief Experience Officers) who will focus on creating positive experiences for all of the stakeholders, including investors, suppliers, employees' families, and even the community. Joyce's forthcoming book Experience Rules will delve into this subject in depth, as will subsequent Herman Trend Alerts.

10. The Employee Incentive Industry will focus more on Memorable Experiences.
Having realized that they can optimize their incentive investments with memorable experiences, we expect to see more incentive programs with short and long trips, involving creating positive emotional and memorable experiences for their employees. It's a good time to be in the travel incentive industry.

11. Mental Illness Will Be Taken More Seriously, as Employers Seek Not to Be Statistics.
With the escalating numbers of public shootings, we are seeing an increase in security consciousness and even the creation of response plans for incidents. The Society for Human Resource Management (SHRM) is already offering resources to help their members respond to the possibility of this threat. We also expect to see insights regarding mental instability given to hiring managers about how to avoid making the wrong hire.

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