This Week's Herman Trend Alert

Leadership in Normal 2.0

  The Herman Trend Alert

January 2, 2012

2013 Workforce/Workplace Forecast

Every year at about this time, The Herman Group issues its annual forecast. Due to the uncertainty of the resolution of economic challenges, employers are adopting a wait-and-see attitude. Also again, this year, we offer you our full forecast (longer than our usual alert) for this year. Enjoy.

1. Recruiting will intensify among many sectors. With recovery in the United States and Europe, companies large and small will feel the pressure to add staff---particularly those in the technical fields. Some companies will continue their reluctance to add staff, even losing burned-out, over-worked long-tenured employees, because of their fear of economic eventualities. Worldwide, we will see continued recovery in Brazil (4.0 percent GDP growth) and India (6.0 percent growth), and China roaring ahead with 8.2 percent growth. Europe, while it continues to emerge from the economic doldrums will continue at very low rates of growth.

2. Workforce shortages will intensify. Years of postponing training and/or eliminating the training function have resulted in severe shortages of trained, experienced workers in many fields. Employers attempting to recruit experienced people will find critical increasing challenges. Wise employers have already begun to re-institute a grow-your-own attitude. These enlightened employers are already building bridges with their local schools, colleges, and universities to insure that they are able to recruit the best and the brightest.

3. In the US and elsewhere, unemployment rates will remain relatively high. Domestically, last year we forecast unemployment to remain over 7.5 percent; it in the month of December 2012, it is actually 7.7 percent. We expect the US unemployment rate to continue at 7.0 percent and above for the coming year. According to the IMF, China’s unemployment will remain at 4.1 percent, in spite of US employers turning away from inconsistent quality and/or finding lower-cost source markets for low-skilled labor. China's domestic markets are growing very fast. The continuing challenge for employers worldwide is that many of the unemployed do not have the skills they are looking for.

4. Workforce development will continue to be a challenge. Due to the growing shortages of skilled workers, more communities will wake up to the fact that they will simply not grow economically without having an available skilled workforce. With that fact in mind, they will put more money into workforce development for the skill sets their prospects seek.

5. Gamification comes into its own. Gamification, which has been used for years now in external marketing, will gain momentum in the field of internal marketing to help employers bond with their associates and add a new dimension to doing work---fun. Gamification will be used in training as well as performance appraisal and career pathing to encourage the growing numbers of millennial employees to be more engaged at work.

6. Using concepts like "Knowledge Fracking", companies capitalize on their internal social networks. ( Companies will not only expand their use of social networking in recruiting, but will also increase its uses in training and development, and even in succession planning as well. Large companies will focus on their intranets and internal password-protected sites to preserve their intellectual capital.

7. More unemployed people will become entrepreneurs. We have already seen a significant uptick in companies contracting the talent they need for the time they need it. We will see more people identifying community and other needs and crating small businesses to supply the needed services.

8. Re-engineering will continue ad infinitum. We will continue to see companies of all sizes continue to reduce staff and hire other workers in an ongoing attempt to optimize productivity, efficiency, and profit. The accompanying drop in employee engagement will be ignored, until that decrease begins to affect the bottom line. Wise employers will engage their employees in finding these efficiencies---without reducing staff.

9. Many employers worldwide will ignore the roles of engagement and retention in their bottom line profitability. Though some employers will have higher employee turnover and much greater difficulty in recruiting, far too few will take action to meet these challenges. By necessity, once again, some employers will be forced to look at the real drivers of employee engagement and retention, which may or may not be what is reflected in their survey results---depending on the questions asked. There is a tremendous pent-up energy for job-hopping, which many employees have been putting off for years, while they were in survival mode with a compromised economy. As this economy continues its recovery and more employees have a high level of confidence in future prosperity, we expect to see job churning at a level we have not seen since the late 1990s.

10. With the re-election of the Obama Administration, expect an escalating regulatory environment. With the continuing (and perhaps expanding) enforcement in regulations affecting Human Resources in the US, there will be ongoing full employment for attorneys specializing in employment law. The partnership between wise employers and their employment lawyers will remain strong for the foreseeable future. Finally, Obamacare will push many small and medium-size employers to stop offering health insurance; instead, they will fund their employees' participation in the "insurance exchanges" which may offer them greater coverage or reduced rates.

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