The Herman Trend Alert
December 27, 2017
2018 Workforce-Workplace Forecast
Every year at about this time, The Herman Group issues its annual forecast. This Herman Trend Alert is intended to provide employers with insights about what to expect in the coming years, so that they may position themselves for success.
2018 is going to be a challenging year for employers looking to hire the talent they need. The intensifying labor shortages will prompt a variety of changes to the way employers recruit and retain talent.
1. Upward pressure on wages.
The war for talent has finally arrived and talent shortages are forcing business leaders to take a new look at wages. They will need to weigh the quality of a candidate against the cost to hire him/her.
2. Focus on the "employee experience" will increase.
For years, many employers have given lip service to the "employee experience", while continuing to provide an environment that does not support employees doing their best work. This year, many, if not most, employers will wake up to the realization that what they have done in the past will not work going forward. If they do not materially change, they will find themselves unable to recruit (and retain) the talent they want and need.
3. Growing emphasis on flexibility in schedules and location.
Another result of the increasing labor shortages will be the mounting demand for flex-time and flex-place. These types of flexibility will be difficult (or impossible) for some employers to offer. For them, focusing on any types of flexibility they can offer will be important, while looking at what else they can offer that has a high-perceived value to the employee---and a low cost to them.
4. More companies will hire for soft skills and culture fit.
For years, we have heard employers say, I hire for attitude and train for aptitude. We are beginning to see that taken to the next level. Case in point, Jay Patel, CEO of Wintergreen Hospitality in Chapel Hill, North Carolina, USA. Patel focuses on essential interpersonal skills, reflected in emotional intelligence, writing, speaking, empathy, clear communication, and conflict resolution. He looks less for traditional and formal credentials and more for life experience and wise talent; the result is exceptional customer service and superior guest hospitality scores. In the future, more employers will follow this path.
5. Expect to see higher percentages of contingent workers.
The Corporation of the Future that Herman and Gioia forecasted in 1998 (Lean & Meaningful: A New Culture for Corporate America) is here. Some companies, particularly start-ups, will not even consider hiring an employee full-time, before s/he has completed at least six months as a contractor. Most employees value the flexibility of working as a contractor and some employers will find themselves negotiating unusual contracts to be able to bring on these talented free agents full-time. For lower-level workers, expect to see more seasonal, temporary, and part-time workers brought on when needed and let go, when not. In fact, according to the global staffing agency Ranstad, "many workers are seeking project or consultant-based work, with as much as 61 percent of the workforce choosing agile* careers by 2019".
6. Greater use of Big Data in HR.
Expect to see people and predictive analytics move beyond HR-specific data. That means, companies will be looking at a variety of factors and more importantly, taking action, to optimize the return on investment of everything from advertising to training budgets. Not surprisingly, what is working to indirectly drive bottom line profits will be given more attention (and money) and what is not working will quickly lose favor and be more difficult to justify for the next round of budgets. The upside is profitability, but the downside is that some good ideas may not be re-funded, simply because they did not work the first time. It will be important for companies to remain vigilant in seeking market opportunities and not dismiss investments that have not worked in the past, but could benefit from some adjustment.
7. Shortage of data scientists encourages innovative solution.
Marie L. Clark, Founder and Chief Executive and Innovation Officer at Ambient Intelligence, Inc. Marie is leading a movement in support of organizations and individuals; Clark teaches employers how to win the talent race and position themselves for success. Clark has developed an effective skills identification tool and methodology that facilitate solving problems using data as a collaborative effort. The greatest success is achieved when employers tap the passions and talents of their people---not expecting one individual to know and do it all – treating data science as a “team sport.” This strategy has many benefits for people and companies. (Look for a Herman Trend Alert on this topic next month.)
8. Upskilling will help solve the STEM skills gap.
Another result of the tightening labor market is that employers will get serious about upskilling their own people. By capitalizing on their talented team members, they not only retain the knowledge and insight within their organizations, but they also retain the people who have already proven their value to the company. And by the way, due to advancing automation, the most valuable skill we can teach people is how to learn and the second most valuable is to how to embrace change.
9. Expect to see additional AI and digital platforms implemented to enhance the recruiting and HR processes.
Advancing work technologies are changing the ways in which companies and their employees work. To keep up with these changes, in 2018 business leaders will need to adapt and evolve, applying new tools and therefore new strategies to every phase of the employment lifecycle. "According to Randstad Sourceright's 2017 Talent Trends survey, a majority (84 percent) of C-suite executives and human capital leaders believe AI and robotics will have an impact on the workplace in the next three to five years."
10. Automation will mostly support the work of humans, not replace them.
For the foreseeable future, we will still need skilled workers to operate most machines. At the same time, machines are becoming increasingly complex, so we will need skilled workers who can keep learning and growing. In a recent study, Forrester Research reported "close to 15 million new jobs will be created in the US alone over the next decade as a result of automation and smart machines." As we reported last week in the Littler-Prime comment to the United States Department of Labor (US DOL), automation holds tremendous potential and significant benefits in efficiency and productivity for the companies that invest in their people and do it right.
11. Sexual harassment claims will grow exponentially.
We have only seen the tip of the iceberg with regard to sexual harassment claims. Not only are they not going away, but we expect to see continuing waves of allegations, firings, convictions, and perhaps settlements, reaching to the highest levels of our institutions, as we see the truth exposed and abusers brought to justice. Do not expect women employees to continue to tolerate any level of sexual harassment, until the accusations begin to create a backlash.
In 2018, the winners will be the organizations that can draw the additional insights from this evolving workplace and dominate the competitive landscape by investing in their people and processes, as well as automation and robotics to maximize ROI.
To read the entire new Ranstad study, visit http://insights.randstadusa.com/six-workforce-trends-that-will-dominate-2018
* Agile career: a series of jobs, working in temporary, contract, consultant, or freelance capacities.
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