This Week's Herman Trend Alert

Leadership in Normal 2.0

  Forecast: 2006 to demand more of employers
By Kathy Gurchiek

Expect competition for qualified workers to intensify as the population ages, the economy gains steam and turnover increases significantly during the first quarter of the new year, according to forecasts by U.S. and Canadian consultant organizations.

"All the indicators we watch suggest the possibility of a surge in job-hopping,"
the Herman Group, Strategic Futurists CEO Roger Herman said in a press release.

That surge will come from workers who, highly sought after in the 1990s, have become disenchanted with their employers the past five years as employment shifted from a seller's to a buyer's market.

Employees who feel they have been taken for granted will not hang around when they have other choices, Herman Group President Joyce Gioia observed.

"If workers are not appreciated by their superiors and co-workers, the emotional bonds holding them to the employer weaken," she said. "They become much more receptive to other employment opportunities where they will be valued."

That disgruntlement is backed up by an online survey sponsored by Kronos Inc., a workforce management solutions firm based in Massachusetts, that found that 77 percent of workers age 18 and older are seeking a new job actively or passively.

That's hardly surprising, given that 43 percent of workers polled in August saw an increase in their hours and 68 percent had an increase in job responsibilities and workload earlier in the year, but only 45 percent reported receiving a raise during that time.

There seems to be more talk than action when it comes to employers taking steps to retain employees, Herman said. His organization predicts that retention strategies will be defensive instead of preventive for many employers, who will realize too late that their attrition rates have skyrocketed.

"We're fascinated at how employers are waiting, putting off implementation of retention strategies, until they think the time is right," he said in November.

"As the employment market tightens even further in early [2006], those employers who take pre-emptive action now will have the competitive advantage."

Multiple strategies

Strategies will include heightened flexibility in work arrangements, including shorter workweeks, flexible hours and modified job roles. In addition, there will be increasing emphasis on results, with work environments feeling more level as managers and subordinates work more like partners to achieve results, the Herman Group predicts. It expects telecommuting to grow, some of it globally.

Managers will be increasingly frustrated with the low level of the workforce's skills, especially candidates for entry-level jobs, prompting senior corporate executives to place greater demands on public schools and technical, community and four-year colleges to improve education of the future workforce, the Herman Group predicts.

It foresees organizations relying more on staffing firms, putting recruiters in high demand and creating a heavier reliance on niche job boards for Internet job searches, and on sophisticated applicant tracking systems and related software.

Employers will emphasize hiring and retaining older workers, the Herman Group and Watson Wyatt predict, with shifting lifestyles replacing traditional retirement as seniors continue working into their 80s or 90s to add to their income, stay active and maintain social relationships.

Along with that, the Herman Group foresees modifications to pay-out options so as workers age they may draw from savings to fund education, sabbaticals, travel and other nonwork activities.

Progressive Canadian employers, Watson Wyatt said, "will start to think holistically" about managing talent to attract and retain employees and to make sure that they are productive and contributing to the bottom line.

Among other predictions from the Herman Group and Watson Wyatt:

  • Pay-for-performance will take hold more strongly among Canadian companies, predicts Watson Wyatt, which focused its 2006 forecast on Canadian employers.
  • Progressive Canadian employers will put into practice ways to improve workplace health and employee productivity as a way to manage mental health and workplace disability issues, Watson Wyatt predicts.
  • There will be a larger investment in corporate training through internal resources, community colleges, universities and outside contractors, says the Herman Group. Emphasis will be on developing future leaders and putting competent leadership on the fast track.
  • Offshoring will continue, sort of.

Organizations will continue to outsource to less-developed regions to save money, and more low-cost production communities will be established around the world to absorb the demand, according to the Herman Group.

However, if workers at home are available, it says, businesses will bring back to their point of origin some work that is sensitive to customer satisfaction, involves cross-cultural communication, or is technical with a need for quality or creativity.

Kathy Gurchiek is associate editor at HR News. She can be reached at                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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