1. SHRMWorkplace ForecastThe Top Workplace Trends According to HR Professionals
2. Contents 2 About This Report 3 Key Themes and Top 10 Trends 6 Demographics and Society 13 Economics and Employment 22 Science and Technology 30 Globalization 39 Public Policy and Law 47 Conclusion 48 Appendix 1: Trends 51 Appendix 2: Actions 54 Methodology 55 EndnotesSHRMWorkplace ForecastThe Top Workplace TrendsAccording to HR ProfessionalsFebruary 2011
3. The SHRM Workplace Forecastis published every two years bythe Society for Human ResourceManagement. The structure ofthe report is based on a surveyof human resource professionals’views on the key issues they feelwill impact the workplace in thecoming years. The report is dividedinto five broad sections coveringdemographics and society, eco-nomics and employment, globalissues, public policy, and scienceand technology. The survey alsoasks HR professionals what actionsthey and their organizations aretaking or are planning to take toaddress these trends, changes andchallenges.About This Report2 SHRM WORKPLACE FORECAST
4. Though many different trendsare considered important by thehuman resource management pro-fessionals surveyed, a small numberof key forces seem to be behindmany of the top trends. Several ofthese issues have been among themost important workplace trends ineach of the Workplace Forecast sur-veys conducted over the past eightyears (see Table 1).Key Themes and Top 10 TrendsTable 1 Top 10 workplace trends: 2003 to 20092003 2005 2007 20091 Use of technologyto communicate withemployeesRising health care costs Rising health care costs Continuing high cost ofhealth care in the UnitedStates2 Rising health care costs Focus on domestic safetyand securityIncreased use ofoutsourcing (offshoring) ofjobs to other countriesLarge numbers of BabyBoomers (1945–1964)retiring at around the sametime3 Increased vulnerability ofintellectual propertyUse of technologyto communicate withemployeesThreat of increased healthcare/medical costs to theeconomic competitivenessof the United StatesThreat of increased healthcare/medical costs to theeconomic competitivenessof the United States4 Managing talent Growing complexity of legalcomplianceIncreased demand forworkplace flexibilityAging population5 Greater demand for high-skilled workers than forlow-skilled workersUse of technology toperform transactional HRfunctionsRetirement of largenumbers of Baby Boomers(those born between 1945and 1964) at around thesame timeGrowing need to developretention strategiesfor current and futureworkforce6 Labor shortages Focus on global security New attitudes toward agingand retirement as BabyBoomers reach retirementageFederal health carelegislation7 Change frommanufacturing toinformation/serviceeconomyPreparing for the next waveof retirement and laborshortageRise in the number ofindividuals and familieswithout health insurancePreparing organizations foran older workforce and thenext wave of retirement9 Increase in employment-related governmentregulationUse and development ofe-learningIncrease in identity theft Threat of recession in theUnited States or globally9 Focus on domestic safetyand securityExporting of U.S.manufacturing jobs todeveloping countriesWork intensification asemployers try to increaseproductivity with feweremployeesLabor shortages at all skillslevels10 Ability to use technologyto more closely monitoremployeesChanging definition offamilyVulnerability of technologyto attack or disasterDemographic shifts leadingto a shortage of high-skilled workersSource: SHRM Workplace Forecast (SHRM, 2002, 2004, 2006, 2008)SHRM WORKPLACE FORECAST 3
5. 4 SHRM WORKPLACE FORECASTOngoing themes throughout theyears include:• The rising cost of health care.• New technologies and greaterdependence on technology tocommunicate with employees.• The implications of increasedglobal competitiveness, espe-cially the need for an educatedand skilled workforce.• An emphasis on safety andsecurity from threats such asnatural disasters, terrorism,cyber attacks, identity theft andintellectual property theft.• Issues related to demograph-ics, especially the aging ofthe workforce, the impend-ing retirement of the BabyBoom generation and thegreater demand for workplaceflexibility.Though some of these issuesreturn to the top 10 list of overalltrends for 2011 (see Table 2) andappear to be likely to continue tohave an important impact on theworkplace and the HR professionin the years ahead, an emphasison economic issues, especiallythe ongoing influence of the“Great Recession,” as well as theimportance of political develop-ments and new legislation markthe main differences between the2011 findings and those of previ-ous years.As it did in 2005, 2007 and 2009,the rise of health care costs toppedthe list of most important trends.HR professionals identified thepassage of federal health care leg-islation as the second most impor-tant trend affecting the workplaceand the HR profession. Othertop political or legislative trendsincluded the growing complexityof legal compliance and changesin employee rights due to legisla-tion and/or court rulings.In comparison with previous years,a large number of global andnational economic issues made itinto the overall list of top trends.Economic issues were very muchon the minds of HR professionalsas they looked to the future, morethan likely due to the continu-ing influence of the 2007-2009recession. Global economic issuesmaking it to the top of the list ofoverall trends included increasedglobal competition for jobs, mar-kets and talent, economic growthof emerging markets, especiallyIndia and China, and greater eco-nomic uncertainty and marketvolatility. The growing nationalbudget deficit also is an issue ofconcern for many HR professionals.Few demographic trends made itinto the top overall ranking of keytrends. The exception was largenumbers of Baby Boomers leav-ing the workforce at around theTable 2 Top 10 trends for 20111. Continuing high cost of employee health care coverage in the United States (see Economics and Employment section)2. Passage of federal health care legislation (see Public Policy and Law section)3. Increased global competition for jobs, markets and talent (see Globalization section)4. Growing complexity of legal compliance for employers (see Public Policy and Law section)5. Changes in employee rights due to legislation and/or court rulings (see Public Policy and Law section)6. Large numbers of Baby Boomers (1945–1964) leaving the workforce at around the same time (see Demographics andSociety section)7. Economic growth of emerging markets such as India, China and Brazil (see Globalization section)8. Greater need for cross-cultural understanding/savvy in business settings (see Globalization section)9. Growing national budget deficit (see Public Policy and Law section)10. Greater economic uncertainty and market volatility (see Economics and Employment section)Source: SHRM Workplace Forecast (SHRM, 2011)In comparisonwith previousyears, a largenumber of globaland nationaleconomic issuesmade it into theoverall list of toptrends.
6. SHRM WORKPLACE FORECAST 5Table 3 Most common overall actions organizations have taken in response to trendsAction Yes, currently doing No Plan to1. Linking employee performance and its impact on theorganization’s business goals68% 11% 21%2. Increasing expectations of employee productivity 67% 15% 18%3. Taking steps to protect employees in the event of amajor health epidemic62% 27% 11%4. Implementing policies and procedures aimed atprotecting employee and customer data from identitytheft60% 22% 18%5. Updating technology use policies for employees (use ofsocial networking sites, e-mail for non-business use, etc.)58% 16% 26%6. Changing company policy in response to federalregulations58% 11% 31%7. Investing in technology and services designed to protectcompany data in the event of disaster or cyber attack57% 18% 25%8. Increasing the use of technology to perform transactionalHR functions56% 24% 20%9. Implementing wellness programs 54% 20% 26%10. Increasing HR’s role in promoting corporate ethics 54% 28% 18%Source: SHRM Workplace Forecast (SHRM, 2011)same time—in 2009, the secondmost important trend, but in 2011,dropping down to number six.The actions HR professionals saytheir organizations now are takingalso are a change from those of pre-vious years, when the emphasis wasfrequently on training and educa-tion. The impact of the economy isclear in the top actions HR profes-sionals reported—many focusedon how to get the most fromemployees given financial andother constraints. The top actionsincluded linking performanceto company goals, increasingexpectations of employee produc-tivity (perhaps because of hiringconstraints that are making it nec-essary for fewer employees to domore with less). As in other years,there remained a concern withthreats to the security of data orthe health and safety of employees(see Table 3).
7. Changes in demographic and socialconditions will factor heavily intoHR professionals’ strategies forthe foreseeable future. This realmof the workplace is focused on theage, race, sex, geographic locationand cultural background of thelabor force (see Table 4).The Baby Boom age group—thoseborn between 1946 and 1964—was for many years the largest gen-eration in the U.S. population, andits members will continue to governmany of the near-term changes inthe labor force. But the Millennialgeneration now is considered to bethe largest generation in Americanhistory and will potentially have aneven greater influence on the work-place, politics (by 2016 Millennialsare predicted to constitute about33% of the eligible electorate) andsociety. Millions of Baby Boomersare approaching retirement age, butmany are unprepared financiallyto stop working. HR professionalswill deal with the implications ofboth those who decide to stay onthe job—thus removing opportu-nities for younger workers to enterthe fold—and those who choose toretire and perhaps take with thema wealth of knowledge when theyleave their companies.The impending retirement ofthe Baby Boomers may explainwhy many HR professionals aretroubled about a skills shortage inthe U.S. labor force. It also maybe getting harder to import skilledtalent from other parts of thecountry—poor economic condi-tions have prevented many workersfrom accepting employment in newgeographic locations, in some casesbecause they are burdened withdevalued homes and cannot selltheir properties.Also weighing on the minds of theHR community are concerns withthe health of older employees andworkers’ increased responsibility tocare for their elderly relatives.In response, many employers areimplementing wellness programsand creating policies that encour-age a more flexible workplace.HR professionals say that moreresources are being channeledtoward training and developmentto boost the skills of their employ-ees, and that their companies alsoare offering employment optionsdesigned to attract and retainyounger workers.Demographics and Society6 SHRM WORKPLACE FORECAST
8. SHRM WORKPLACE FORECAST 7Large numbers ofBaby Boomers leavingthe workforce aroundthe same timeEven though many older workersare expected to stay longer on thejob, millions of others will leavethe labor force in the near futureand start their retirement. TheBureau of Labor Statistics (BLS)says that job openings stemmingfrom “replacement needs”—orthose that occur when workersretire or otherwise leave theiroccupations—are projected to bemore than double the job openingsthat are created due to economicgrowth from 2008 to 2018. Still,what needs to be determined iswhere exactly these retirements willoccur and if the supply of youngerworkers will match specific indus-tries. The labor force of the futurewill look much different from whatit did when most Baby Boomersstarted their careers. The U.S.economy has slowly shifted from agoods-producing entity to a serviceprovider. From 2008 to 2018,service industries are expected toadd 14.6 million jobs, or 96% ofthe increase in total employment.During that same timeframe, themanufacturing industry is expectedto shrink by 1.2 million jobs,according to the BLS.1A global shortage ofskilled workersIn the wake of the Great Recession,hiring still has not become a toppriority at many businesses becauseTable 4 Top demographic and social trendsMajor strategicimpactMinor operationalimpactNo impactLarge numbers of Baby Boomers (1945-1964) leaving theworkforce at around the same time64% 29% 7%A global shortage of skilled workers 57% 31% 12%Increase in chronic health conditions such as diabetes, heartconditions, etc., among employees50% 43% 7%Growth in the number of employees with caring responsibilities(elder care, child care, both elder care and child care at the sametime)47% 48% 5%Employee backlash against rising benefits costs 44% 51% 5%Increased employee demand for workplace flexibility 43% 50% 7%An increased proportion of older workers in the workforce 40% 48% 12%Increased concerns about safety and security in the workplace 38% 55% 7%Growth in the number of employees with English as a secondlanguage38% 51% 11%Rise in the number of employees with untreated physical andmental health conditions in the workplace36% 51% 13%Higher rates of immigration and an increase in the number offoreign-born workers32% 53% 15%Decline in the number of employees without health insurance 28% 55% 17%Growth in the recognition and response to generationaldifferences among employees28% 62% 10%Increase in employee identity theft 28% 58% 14%Increased demand by company stakeholders/shareholders forinput into corporate decision-making25% 57% 18%Increase in the number of employees with mental healthconditions such as depression24% 59% 17%Growing employee demand for sustainable and green businesspractices23% 56% 21%Increase in the number of individuals with disabilities in theworkforce16% 62% 22%Increased labor force participation rates of women 16% 64% 20%Growth in religious diversity in the workplace 11% 59% 30%Source: SHRM Workplace Forecast (SHRM, 2011)
9. 8 SHRM WORKPLACE FORECASTof continued weak demand fortheir products. Nevertheless, HRprofessionals see a long-term prob-lem with skills shortages in thelabor force. Other research con-ducted by SHRM bears this out,particularly a post-recession hiringpoll from the spring of 2010. Sixty-two percent of companies thatplanned to conduct hiring in 2010were asked if their new jobs wouldrequire different skill sets. Amongthose who responded “yes,” a com-bined 39% said they expected toencounter some degree of difficultyin finding qualified individuals forthose new positions (see Figure 1).2Elsewhere, SHRM’s LeadingIndicators of National Employment(LINE) report has a recruiting dif-ficulty index that measures howhard it is for companies to find can-didates to fill positions of “great-est strategic importance” to theirbusinesses. While that index dippedsharply (i.e., companies in the man-ufacturing and service industriesreported less recruiting difficulty)during 2008 and early 2009, itrose consistently every month inlate 2009, through most of 2010and in the early months of 2011,when compared with the previ-ous year. Even during a time whenthere are several workers availablefor every open position in the U.S.labor force, HR professionals stillare having trouble finding the rightpeople to match the skills requiredfor their job openings.3Increase in chronic healthissues among employeesAside from the personal risks thatmany Americans with chronichealth issues face, the rise in suchailments has a twofold negativeimpact on HR professionals andtheir companies. Treatment forthese illnesses can drive up thecost of providing health care, andproductivity in the workplace islost when these employees needextended time away from their jobsto deal with their health issues.Half of HR professionals said theincrease in long-term health issues,such as diabetes, obesity and heartconditions, is having a major strate-gic impact on their operations.This has added significance as thelabor force gets older as a whole.The Centers for Disease Controland Prevention (CDC) esti-mates that 23.6 million peoplein the United States have diabe-tes, or 7.8% of the U.S. popula-tion. The rate rises dramaticallyfor older persons—12.2 millionpeople aged 60 years or older havediabetes, or 23.1% of all peoplein that age group in the UnitedStates.4In 2010, the CDC esti-mated that heart disease would costthe United States $316.4 billion,which includes the cost of healthcare services, medications and lostproductivity at work.5The rise ofobesity in the United States andaround the world also puts millionsof people at higher risk for otherlong-term health issues. The CDCestimates that 26.7% of the U.S.population is obese, and again,older persons have a higher rate ofobesity than the national average(31.1% of those aged 50 to 59 areobese, 30.9% of those aged 60 to69 are obese).6Figure 1 If your company will need a different skill set for new jobs in the post-recession workplace, howdifficult do you think it will be to find qualified individuals for those positions?Very difficultSomewhat difficultSomewhat easyVery easy3%36%45%16%Source: Society for Human Resource Management. (2010, March). SHRM poll: Post-recession hiring. Retrieved from www.shrm.org.HRprofessionalssee a long-termproblem with skillsshortages in thelabor force.
10. SHRM WORKPLACE FORECAST 9Growth in the number ofemployees with caringresponsibilities“Workers with caring responsi-bilities” are defined as those whoprovide caregiving for children,elderly persons or both at the sametime. These workers may requireflexible schedules, extended periodsof leave time and other accommo-dations that can have an impact onproductivity. A 2009 study by theNational Alliance for Caregivingin collaboration with the AARPshows that caring responsibilitiesare on the rise as the populationages. Caregivers in 2009 were morelikely to report that they shiftedtheir arrival or departure times ortook time off to provide care com-pared with respondents in 2004(57% in 2004, 66% in 2009) asdepicted in Figure 2.7HR profes-sionals in this survey, meanwhile,say they are becoming more sen-sitive to the needs of caregivers.Nearly half (46%) said they havepolicies aimed at encouragingworkplace flexibility, and another24% said they plan to implementsuch policies.Increased employee demandfor workplace flexibilityWorkers increasingly are asking forthe flexibility they need to managework and commitments they haveoutside of the workplace. Whetherdue to caregiving responsibilities,parenting or other family or per-sonal needs, many employees wantbenefits such as telecommutingand flexible schedules. As displayedin Table 4, 43% of HR profession-als in this survey said the demandfor workplace flexibility will have amajor strategic impact on opera-tions in the years to come.Figure 2 Work accommodations due to caregivingChoose early retirementLose any job benefitsTurn down a promotionGive up working entirelyReduce work hours or take a less demanding jobTake leave of absenceGo in late, leave early, take time offAny of these70%66%20%12%9%6%6%3%Source: AARP. (2009). Caregiving in the U.S.Figure 3 Percent distribution of civilian labor force by age: 1998, 2008 and projected 201815.971.712.4 14.367.718.112.763.523.91998 2008 201816-24 25-54 55 and olderSource: U.S. Bureau of Labor Statistics. (2009). 2008-2018 job outlook. Retrieved from www.bls.gov.
11. 10 SHRM WORKPLACE FORECASTOther SHRM data show that someorganizations already are getting onboard with variable work sched-ules. The SHRM 2010 EmployeeBenefits survey report revealed thatnearly half (49%) of HR profes-sionals said their company offersflextime, which allows workersto select their hours within limitsestablished by the employer. This isdown, however, from 2006, when57% of respondents said flextimewas offered at their companies—a change potentially related toreductions in company workforces.Working from home is becom-ing an increasingly popular option,though. The SHRM 2010 EmployeeBenefits survey report showed that34% of companies offer telework ona part-time basis, up from 26% in2006. Another 17% offer telecom-muting on a full-time basis, virtu-ally unchanged from 19% in 2006.8An increased proportion ofolder workers in the workforceThere is no question that the U.S.labor force is getting older. Thenumber of persons aged 55 orolder in the labor force is expectedto grow by 12 million, an increaseof 43%, during the 2008-2018time period, according to the U.S.Bureau of Labor Statistics (seeFigure 3).9Increased life expec-tancy and workforce participationof post-traditional retirement ageindividuals means the workforce ofthe future will have a wider range ofgenerations working together. BabyBoomers remaining in the work-force also could impact the careertrajectories of employees in youngergenerations. Some pundits have sug-gested that a preponderance of BabyBoomers uneager to retire will leadto a “gray ceiling” that could limitcareer opportunities for youngergenerations, especially Gen Xers,the relatively small generation that isthe Baby Boomers’ direct successor.In this kind of scenario, employerswill need to consider ways to makeemployees of all generations feel asense of career progress and limitareas of tension between differentgenerations of employees.Another key factor that an olderworkforce could influence is healthcare costs, since the risk of illnesstends to increase with age. Thiscould lead to a greater emphasison employee wellness and diseaseprevention.Concerns about safety andsecurity in the workplaceHR professionals continue to befocused on how to ensure employeesafety and security as the range ofissues they must be prepared forcontinues to grow. Incidences ofworkplace violence, the continuingthreat of terrorism and a numberof high-profile natural disastersover the past decade have led manyorganizations to implement policiesthat help employees prepare forcatastrophic or serious emergen-cies. Under the general duty clauseof the federal Occupational Safetyand Health Act and on theories ofnegligence under state law, employ-ers may be held liable for criminalacts committed by third parties.Employers, therefore, must provideworkers with a safe place of employ-ment and could face significantpenalties and fines in the aftermathof a crime committed in their placesof business. In addition to crimi-nal activity or workplace violence,many employers are trying to helpprepare their employees for naturaldisasters or health pandemics in newways. For example, the emergenceof the H1N1 flu virus in 2009 ledmany employers to reconsider theirattendance policies: 32% of HRprofessionals in a 2009 SHRM pollsaid they planned to reconfiguretheir telecommuting policies so thatemployees could telecommute in thecase of an outbreak in their area.10Another issue HR professionalsare concerned about is the securityof employee and customer data.Implementing new policies andprocedures aimed at protecting suchdata from identity theft or othermisuse is one of the most commonactions HR professionals are takingin response to these changing work-place trends (see Table 5).Growth in the number ofemployees with Englishas a second languageAccording to the U.S. CensusBureau, although 80% of the U.S.population over 5 years old spokeonly English at home, the popula-tion speaking a language other thanThe workforceof the futurewill have awider rangeof generationsworkingtogether.
12. SHRM WORKPLACE FORECAST 11English has been increasing steadilyfor the last three decades. Out ofthe 55.4 million people who spokea language other than English athome, most (62%) spoke Spanish(34.5 million speakers), 19% spokean Indo-European language (10.3million speakers), 15% spoke anAsian and Pacific Island language(8.3 million speakers), and 4% (2.3million speakers) spoke a languagenot covered in the above classifi-cations. Though the majority ofspeakers across all four of the majorlanguage groups reported speakingEnglish well, the number of individ-uals for whom English is not theirfirst language is likely to continueto rise in the short term.11This,along with a growing multilingualcustomer base for many businesses,could lead some organizations toconsider new ways of communicat-ing with customers and employees.It also could enhance the demandfor employees who speak multiplelanguages.Rise in the number ofemployees with untreatedphysical and mental healthconditions in the workplaceIt may be too soon to tell preciselywhat impact federal health carelegislation will have on the numberof individuals without health insur-ance. But even with the new law inplace, HR professionals continueto be concerned that a growingnumber of employees may be goingwithout the needed treatments forboth physical and mental healthconditions. With health care costscontinuing to climb, many orga-nizations may shift more healthcare costs onto employees, andthis could lead some employees toeither eliminate or underuse pre-scribed medications or to put offsome types of medical interven-tions. HR professionals thereforemay need to consider the impli-cations on productivity or healthand safety that changes in coveragecould have on their workforce.HRprofessionalscontinue to beconcerned that agrowing numberof employees maybe going withoutthe neededtreatments forboth physical andmental healthconditions.
13. 12 SHRM WORKPLACE FORECASTTable 5 Top actions organizations are taking in response to demographic and social trendsYes, currentlydoingNo Plan toImplementing policies and procedures aimed at protecting employee andcustomer data from identity theft 60% 22% 18%Implementing wellness programs 54% 20% 26%Increasing HR’s role in promoting corporate ethics 54% 28% 18%Investing more in training and development to boost skills levels of employees 53% 25% 22%Increasing investment in employee safety and security 51% 31% 18%Changing employment practices to avoid charges of discrimination 46% 44% 10%Implementing policies aimed at increasing workplace flexibility 46% 30% 24%Increasing expectations of employee availability to deal with work issues, evenin non-working hours such as nights or weekends 45% 46% 9%Implementing employee diversity education programs 41% 38% 21%Putting greater emphasis on developing retention strategies for the currentand future workforce 40% 30% 30%Training line managers to recognize and respond to generational differences 38% 41% 21%Offering employment options designed to attract and retain younger workers 27% 59% 14%Conducting studies to determine projected future retirement rates in theorganization 22% 61% 17%Offering more customized benefits packages to employees 20% 64% 16%Offering employment options designed to attract and retain older workers 16% 73% 11%Moving business to different domestic geographic location 10% 84% 6%Source: SHRM Workplace Forecast (SHRM, 2011)How HR professionals are responding to demographic and social trendsHRprofessionals report anumber of differentactions in response to trends relatedto demographics and society. Themajority say they already have imple-mented policies to protect data fromidentity theft and most already haveor will be implementing wellness pro-grams in their organizations to helpdeal with rising health care costs andto help employees avoid or managechronic illnesses. In spite of the recentrecession, many also reported thatthey are or will be investing more intraining and development to boostskills. Looking ahead, many HR pro-fessionals say they will be focusing onretention as the economy improves,and at least some of these strategiesare likely to feature policies aimed atincreasing workplace flexibility (seeTable 5).Other ideas to consider• Investigate what demographic trends might be having the biggest impacton skills shortages in your workforce. Is it lack of qualified graduates?The retirement of large numbers of current workers? A need to attractand retain more female workers? A loss of labor mobility due to sinkinghouse prices? By better understanding what factors have the biggestinfluence on your organization’s pool of available talent, you will find thatsolutions become that much easier to formulate.• Engage pre-retirement employees by offering gradual or phasedretirement. Make use of the knowledge of such workers throughmentoring programs.• Look for ways to coach and help Generation X and Millennialemployees experience a sense of career progress to avoid perceptionsof a “gray ceiling,” increase engagement and build your organization’stalent pipeline for the future.• Partner with local community colleges to develop training andeducation programs that deal with local skills shortages or with state ornational universities that specialize in key areas of business need.• Create targeted wellness programs that meet the needs of alldemographic groups, including older workers.• Offer flexible working arrangements and encourage employees from alldemographics to use them.• Work with your employee assistance program (EAP) provider to offercaregiver assistance programs.
14. SHRM WORKPLACE FORECAST 13Economic and employment issueshave been at the forefront of HRprofessionals’ concerns since the2007-2009 global recession beganin December 2007. HR profes-sionals in some countries thatalready are in strong growth modemay be more focused on takingadvantage of the opportunities forgrowth that their dynamic nationaleconomies are offering. However,many HR professionals, includ-ing the U.S.-based respondents ofthis survey, continue to see a chal-lenging economic environmentahead. The economic and employ-ment facets of HR operations areconnected to everything from theactual production of materials andservices provided by a company, totrends in hiring and salaries and theavailability of workers. As in previ-ous years, HR professionals citedthe high cost of health care cover-age as having a major impact onoperations in the future. However,the economic uncertainty broughton by the recession and the relatedvolatility of corporate earningsand the stock market also wereprevalent among HR professionals’concerns.The HR community is lookingahead and studying the potentiallong-term impacts of the 2007-2009 recession. Even as fiscalconditions improved in the firsthalf of 2010, some economic indi-cators remained weak as the yeardrew to a close, prompting manyHR professionals to remain waryof the economy dipping back intoanother downturn. They also areconcerned about workers who havenot saved enough for retirementduring these recent lean years anda growing income gap betweenyounger and older workers that wasbrought on by job losses, salaryfreezes and cuts at many companiesin the past two years (see Table 6).Continuing high cost ofemployee health carecoverage in the United StatesHealth care reform took centerstage in Congress in 2010, andHR professionals still are tryingto determine what it will mean fortheir employers and their workers.The rise in health care costs hasbeen a top concern of HR repre-sentatives for the past several years,and that will not change as benefitsexperts navigate the changes associ-ated with the 2010 health care bill.According to the most recentSHRM Health Care BenchmarkingStudy, “the average annual healthcare cost per covered employeein 2009 for all industries was$8,026, including employer-paidEconomics and Employment
15. 14 SHRM WORKPLACE FORECASTpremiums, administration costsand any possible individual medi-cal claims covered by the employer.That is, organizations typicallypaid $8,026 in health care costsfor each employee who enrolledin an employer-sponsored healthcare plan.”12The report observesthat actual health care costs forany organization depend on manyfactors such as the “demographicmake-up of those being insured,the actual percentage the organi-zation contributes to health carepremiums and the history of insur-ance claims the organization filedin previous years.” The findingsshow that publicly owned for-profitcompanies had the highest averagehealth care premium for employee-only coverage, at $448, and theTable 6 Top economic and employment trendsMajorstrategicimpactMinoroperationalimpactNo impactContinuing high cost of employee health care coverage in the United States 85% 15% 0%Greater economic uncertainty and market volatility 61% 36% 3%Increased corporate downsizing and bankruptcies 56% 36% 8%Business impact of a decline in the value of the U.S. dollar 54% 42% 4%Increased cost of living for U.S. employees 54% 41% 5%Threat of a dip back into recession in the United States or globally 54% 43% 3%Decline in employees’ retirement savings 53% 43% 4%Rising retiree benefits costs 53% 37% 10%Downturn in consumer spending 52% 41% 7%Growth in the generational income divide (impact of higher education and livingcosts and slower wage growth on ability of younger generations to save andinvest) 50% 41% 9%Overall decline in the workforce readiness of new entrants to the labor market 49% 40% 11%Shift from a manufacturing to an information/service or knowledge economy 48% 37% 15%Increased demand for greater transparency of corporate data and information 45% 47% 8%Potential rise in fuel/gasoline prices in the United States and globally 44% 50% 6%Increased use of outsourcing of jobs within the United States 43% 45% 12%Rising higher education costs (impact on graduation rates, debt and availability ofeducated workers) 43% 43% 14%Increased mergers and acquisitions (MA) activity 42% 48% 10%Increasing employee concerns about job security 41% 51% 8%Greater use of contingent workers 38% 48% 14%Increased use of offshoring 37% 45% 18%Rise in underemployment (job seekers can only find part-time jobs or are in jobsfor which they are overqualified) 37% 53% 10%Growth in the income divide between high- and low-paid workers 36% 54% 10%Growth in unions in nontraditional sectors and industries 35% 44% 21%Changes in negotiating strategies, tactics and processes used by organized labor 34% 47% 19%Increased economic interdependence of countries and cultures 34% 50% 16%Decrease in unemployment 30% 62% 8%Employee wage stagnation 30% 61% 9%Upturn in consumer spending 30% 60% 10%Employee wage growth 26% 68% 6%Greater involvement of corporate boards in setting company policy 26% 53% 21%Rise of small businesses as generators of job growth 26% 55% 19%Reduction in employee mobility due to the housing/mortgage crisis 19% 64% 17%Source: SHRM Workplace Forecast (SHRM, 2011)
16. SHRM WORKPLACE FORECAST 15industry with the highest averageemployer contribution to monthlyhealth care premium for employee-only coverage was government/public—state/local industry (seeTable 7). A key finding was thatorganizations that had three ormore plans were noted to havelower median health care costs thanthose organizations that offeredonly one plan type to their employ-ees. As a result, more organizationsmay begin to offer two or moreplans, including high-deductibleconsumer-driven health care plans,in order to save costs on thoseemployees who use health care lessfrequently and are more likely tochoose a less expensive plan withlower premiums.Greater economic uncertaintyand market volatilityThe recession that began inDecember 2007 resulted in theloss of more than 8 million jobs,and although the U.S. labor forcebegan creating jobs through-out 2010, the pace was too slowto make a significant dent in theunemployment rate.To worsen matters, many of thosejobs eliminated during the eco-nomic downturn are not expectedto return, in light of technologicalupgrades that have improved pro-ductivity or automated jobs, alongwith the ongoing drive to squeezemore productivity out of existingstaff. Many economic forecasts arecalling for slow, steady growth inthe U.S. Gross Domestic Product(GDP) for the next two years—the World Bank, for example, isforecasting GDP growth in theUnited States of 2.9% in 2011 and3.0% in 2012.13But there still areplenty of conflicting signals in theeconomy, and this is putting hiringplans on hold for many employers.The bottom lines at corporations,for example, have steadily recov-ered since the recession began, butthat has not translated into a com-mensurate surge in hiring, accord-ing to an examination of U.S.Department of Commerce databy the Economic Policy Institute,a Washington, D.C.-based thinktank. As of the first quarter of2010, corporate profits were 5.7%higher than they were in the fourthquarter of 2007, yet during thesame timeframe, the number ofjobs in the U.S. labor force fell by5.9%.14Increased corporatedownsizing and bankruptciesIf 2008 and 2009 will be remem-bered for the high number ofbanks, insurance and other finan-cial companies that faced bank-ruptcy and 2010 saw a high rate ofcorporate downsizing and bank-ruptcies continue in the privatesector, 2011 may be rememberedfor the high number of federal,state and local government jobsthat were lost.Table 7 Employer contribution to monthly health care premium for employee-only coverage(by organization sector) 25th Percentile Median 75th Percentile AverageAll sectors $175 $306 $405 $338Government agency $60 $265 $338 $284Nonprofit organization $150 $280 $372 $306Privately owned for-profit organization $281 $386 $472 $410Publicly owned for-profit organization $86 $393 $530 $448Source: Society for Human Resource Management. (2010). SHRM health care benchmarking study. Alexandria, VA: SHRM.Table 8 Planned changes in total staff level (by organization sector)Overall(n = 426)Publicly OwnedFor-Profit(n = 66)Privately OwnedFor-Profit(n = 229)Nonprofit(n = 69)Government(n = 38)Will increase total staff 28% 47% 27% 25% 13%Will maintain total staff 60% 44% 62% 67% 66%Will decrease total staff 12% 9% 10% 9% 21%Note: Excludes responses of “not sure.”Source: Society for Human Resource Management. (October 2010). SHRM labor market outlook Q4 2010.
17. 16 SHRM WORKPLACE FORECASTAs the federal stimulus fundsbegan to dwindle, many stateshave faced serious budget short-ages. Municipal debt has grownsignificantly in the past decade, andhigh levels of municipal debt alongwith underfunded pensions forgovernment workers could mean awave of downsizing in the publicsector. According to the SHRMLabor Market Outlook for the finalquarter of 2010, HR professionalsin the government sector were leastlikely to say they would add staffin the next quarter and were mostlikely to say they would decreasestaff levels (21%, see Table 8).15And in November 2010, PresidentObama instituted a two-year freezeof the salaries of some 2 millionfederal workers. These reductionsand other spending measures alsocould have a ripple effect on orga-nizations outside the governmentsector.Threat of a dip back intorecession in the UnitedStates or globallyHR professionals are very aware ofthe threat of the global economyfalling back into a downward tra-jectory. Though most economistswere not predicting a double-diprecession as 2010 wound down,economic anxiety has continuedacross most parts of the world. Inaddition to the political protestsacross the Arab world, Europeexperienced a number of protestsas countries such as Greece andIreland looked to the EuropeanUnion and International MonetaryFund (IMF) for bailouts, and gov-ernments in France and the UnitedKingdom introduced austeritymeasures in response to spiralingdebt. High levels of debt make itless likely that governments willintroduce additional fiscal stimu-lus measures in 2011, and this,too, could influence economicconditions throughout the yearand beyond. A period of sluggishgrowth, if not an actual recession,could make workers less willingto change jobs and more focusedon job security, while poor eco-nomic conditions in countries witha strong history of emigration,such as Ireland, could increase thenumber of highly educated immi-grants seeking opportunities inmore robust economies.Increased cost of livingfor U.S. employeesAlong with the cost of health care,the cost of other goods and servicesalso is increasing. For example, theU.S. Department of Agriculture’sAnnual Report on Expenditureson Children by Families, 2009showed that the overall cost of rais-ing a child rose 15% in inflation-adjusted dollars between 1960 and2008, mainly due to increases inhealth care, child care and educa-tion costs.16At the same time,when adjusted for inflation, manyemployees have not seen increasesin their wages for several years andmay be finding it more difficult tomake ends meet. This trend wasexacerbated during the recession.The USDA’s calculations did notinclude the cost of a college educa-tion, which has been increasingsubstantially, yet a college degreehas become ever more necessary forworkers to obtain in order to earnthe wages needed to keep up withrising living costs. This may meanthat a higher number of employees,especially those in Generation Xand the Millennial generation,will carry a large college debt loadeither for themselves or their chil-dren. An increase in higher educa-tion costs in particular could haveimportant future implications forthe workplace because if fewer fam-ilies can afford the cost of highereducation, fewer educated workerswill be available to employers in theyears ahead.Business impact of a declinein the value of the U.S. dollarThe Federal Reserve is likely toprint more dollars to push interestrates lower if it is seen as the onlyavailable move to encourage lend-ing and thus wake up a sluggisheconomy. And though the dollarcontinues to be the undisputedglobal reserve currency, inves-tors worry that the more dollars incirculation, the further the valueof the dollar will decline. On theother hand, the dollar may rise ifEuropean sovereign debt troublesget worse. Because many emergingA period ofsluggish growth,if not an actualrecession, couldmake workersless willing tochange jobs andmore focused onjob security.
18. SHRM WORKPLACE FORECAST 17Figure 4 What do you see as the biggest threat to the retirement savings of employees at your organization?Employees are not saving enough for retirementThe instability of the financial marketsEmployees do not understand their retirement options(financial literacy)Employer-based retirement offerings alone are notenough to provide solid retirement savingsThe inadequacy of government retirement programsThe current and future financial stability of myorganizationOther32%32%14%10%7%3%2%Source: Society for Human Resource Management. (2009, July). SHRM poll: The U.S. recession and its impact on employee retirement. Retrievedfrom www.shrm.org.market countries are experienc-ing more stable fiscal conditionsand less debt, their currencies maybecome more attractive to inves-tors. A decline in the dollar wouldinfluence the cost of exports, andalthough a weaker dollar will makethe cost of imported goods rise forthe American consumer, it wouldhelp U.S. manufacturing firms selltheir goods abroad.Decline in employees’retirement savings, risingretiree benefits costsWhile much focus has been placedon the unemployment rate andthe shaky U.S. economy, there aregrowing concerns among HR pro-fessionals regarding how their work-ers will spend their “golden years.”Several studies indicate that work-ers are not preparing adequately forretirement, perhaps due, in part, toincreased financial hardships thatemerged during the recession. AJuly 2009 SHRM poll asked HRprofessionals what they viewed asthe biggest threat to the retire-ment savings of employees at theirorganizations, and 32% said theirworkers were not saving enoughmoney and another 32% cited theinstability of the financial markets(see Figure 4). In response to thesechallenges, 72% of HR profession-als said they were offering moreeducation to their workers—eitherthrough literature or presenta-tions—in order to build up theirnest eggs.17A July 2010 survey bythe Employee Benefit ResearchInstitute found that nearly one-half(47.2%) of “early Baby Boomers”in the workforce were at risk ofnot having sufficient retirementresources to pay for basic expen-ditures and uninsured health carecosts. That percentage dropped to43.7% for “late Baby Boomers,” butrose back up to 44.5% for membersof Generation X.18Decline in consumer spendingMany economists agree that con-sumer spending accounts for any-where from two-thirds to 70%of the U.S. GDP. It easily can beargued that a prolonged slumpin shoppers’ spending habits willseverely hamper the U.S. econ-omy’s chances of making a fullrecovery. More than half (52%) ofHR professionals in this survey citea downturn in consumer spendingas a top concern. Recent U.S. gov-ernment data show that spendingactivity has improved since 2009,and reports on holiday spending atthe close of 2010 were somewhatpositive, but spending activity isnot increasing substantially on amonthly basis. The U.S. Bureauof Economic Analysis reportedthat consumer purchases rose0.4% in October 2010, followingan increase of 0.3% in September,similar increases of 0.5% in AugustWhen adjustedfor inflation,many employeeshave not seenincreases in theirwages for severalyears and maybe finding it moredifficult to makeends meet.
19. 18 SHRM WORKPLACE FORECASTand 0.5% in July, and no increase inJune.19Spending on retail and foodservices in October 2010 totaled$373.1 billion, an increase of just1.2% from September, but 7.3%higher than October 2009, accord-ing to the U.S. Census Bureau.20Growth in the generationalincome divideBLS data show that while olderworkers are much more likely tostay unemployed longer, youngerworkers statistically are more likelyto lose their jobs. Many new gradu-ates have yet to find good jobs atthe wages needed to repay theirstudent loans, thus delaying theonset of their prime savings years.23The Organization for EconomicCooperation and Development(OECD) predicts that youth unem-ployment rates in the OECD areaof the world’s most developednations are expected to remain ataround 18% in 2011 and 17% in2012. This is more than double thetotal OECD unemployment rate,which stood at 8.6% in October2010.24Young people are enter-ing the job market during a time ofslow growth in new-hire compensa-tion (see Figure 5), and the recentunrest across the Arab world clearlydemonstrates that high rates ofunemployment among the youngcan have major social and politicalimplications.Wealth accumulation tends tohappen later in life. In the UnitedStates, government safety nets suchas Social Security and Medicarealso are aimed mainly at the elderly.Older workers are less likely to haveto shoulder some of the key livingexpenses that experienced the big-gest cost jump in recent years, suchas child care and college loans. Thismay mean that in many organiza-tions older employees could benoticeably more stable financiallythan their younger counterparts.Demographic trends such as latermarriage and childbirth—frequentlydue to uncertain finances—delaythe financial benefit of sharedhousehold incomes and extend thecosts of child-rearing further intoprime earning years. These trendscould make it more difficult to savewhile young, when compoundinginterest yields the best returns. Thiscould result in significant genera-tional differences in income, netFigure 5 SHRM LINE new-hire compensation index, manufacturing and services (June 2005 to January 2011)Jun-05Oct-06Feb-06Jun-07Oct-05Feb-07Jun-06Oct-07Aug-05Dec-06Apr-06Aug-07Dec-05Apr-07Aug-06Dec-07Jul-05Nov-06Mar-06Jul-07Nov-05Mar-07Jul-06Nov-07Sep-05Jan-07May-06Sep-07Jan-06May-07Sep-06Manufacturing new-hire compensation Service sector new-hire compensationSource: Society for Human Resource Management. SHRM Leading Indicators of National Employment (LINE) [historical data].While olderworkers are muchmore likely tostay unemployedlonger, youngerworkers statis-tically are morelikely to lose theirjobs.
20. SHRM WORKPLACE FORECAST 19worth, debt and retirement savings,and these, in turn, could potentiallylead to more generational tensionor conflict within the society andthe workplace.Overall decline in theworkforce readiness of newentrants to the labor marketMany HR professionals report thatnew entrants to the labor force donot have adequate skills. In a 2009survey report, the American Societyfor Training and Development,The Conference Board, CorporateVoices for Working Families andSHRM surveyed 217 employ-ers to examine corporate practiceson training newly hired graduatesat three educational levels: highschool, two-year college and four-year college. The findings showedthat almost half of the employerssurveyed provide workforce readi-ness (remedial) training programsto their newly hired entrants to dealwith deficiencies in skills that theyexpected this group to have whenhired.25Unfortunately, the majorityof companies find these programs tobe only “moderately” or “somewhatsuccessful” at best, stressing theneed for both improved manage-ment of business training dollarsand a much more effective U.S. edu-cation system. The OECD estimatesthat if the United States—whichcurrently ranks among the lower-performing OECD countries inmath and language skills—couldimprove its education outcomes tomeet the level of top-performingOECD countries, it “would by his-torical growth patterns see a pres-ent value of improved GDP of overUSD 100 trillion.”26Apr-08Feb-09Dec-09Oct-10Aug-08Jun-09Apr-10Jun-08Apr-09Feb-10Dec-10Feb-08Dec-08Oct-09Aug-10Oct-08Aug-09Jun-10May-08Mar-09Jan-10Nov-10Jan-08Nov-08Sep-09Jul-10Sep-08Jul-09May-10Jul-08May-09Mar-10Jan-11Mar-08Jan-09Nov-09Sep-10Workers arenot preparingadequatelyfor retirement,perhaps due, inpart, to increasedfinancialhardships thatemerged duringthe recession.
21. Table 9 Top actions organizations are taking in response to economic and employment trendsYes, currentlydoingNo Plan toLinking employee performance and its impact on the organization’s business goals 68% 11% 21%Increasing expectations of employee productivity 67% 15% 18%Putting more emphasis on succession planning and people readiness 51% 18% 31%Developing broader business acumen among HR staff 49% 30% 21%Increasing HR’s role in promoting corporate social responsibility and sustainability 47% 30% 23%Investing more in leadership development 45% 27% 28%Increasing the use of noncash rewards such as time off, time flexibility, learningopportunities44% 33% 23%Increasing investment in training for HR staff 43% 38% 19%Hiring workers (or increasing size of workforce) 42% 37% 21%Reorganizing the HR function to meet changing organizational strategic needs 42% 41% 17%Building people management or human capital components into key businesstransactions (change management, mergers acquisitions)39% 41% 20%Increasing employee health care co-pays 33% 40% 27%Retraining employees for new jobs 31% 54% 15%Putting more emphasis on certification for HR professionals 29% 62% 9%Moving strategic HR functions to business units 27% 66% 7%Decreasing use of contingent workers 26% 68% 6%Increasing use of specialized HR practitioners 26% 63% 11%Raising wages 23% 37% 40%Increasing use of alternative dispute resolution 22% 71% 7%Increasing use of contingent workers 22% 66% 12%Laying off workers (or shrinking size of workforce) 20% 68% 12%Decreasing retirement benefits plans 16% 76% 8%Decreasing other employee benefits as a result of increased health care benefitscosts15% 65% 20%Making changes to the executive compensation determination process 15% 71% 14%Increasing the use of HR outsourcing 14% 74% 12%Cutting back on HR staff 12% 81% 7%Decreasing wages 8% 88% 4%Source: SHRM Workplace Forecast (SHRM, 2011)How HR professionals are responding to economic and employment trends20 SHRM WORKPLACE FORECAST
22. HRprofessionals’ actionsin response to theseconcerns reflect a mix of increasedconfidence in the economy and anacknowledgment that a prolongedeconomic revival is not guaran-teed. Many HR representativesreport that their companies areadding workers or plan to growpayrolls in the near future, andothers are raising wages or makingplans for bigger salary budgetsdown the road. At the same time,a high proportion of respondentsare increasing expectations ofemployee productivity, as well asputting more emphasis on succes-sion planning and people readi-ness, perhaps as a safeguard againstfuture downturns in the economy.Many of the actions HR profes-sionals are taking involve morestrategic approaches reflecting howimportant it is for organizations tomanage their human capital effec-tively. The actions HR professionalsreport they are taking suggest thatcompanies are looking to HR torespond to changes in the economyby adjusting HR strategies andpractices.Other ideas to consider• Develop a range of potential economic scenarios for your industry ororganization. What will it mean for your business and your employees ifthe economic recovery is slow, stalls or, conversely, gathers steam andis strong and robust?• Think about what careers in your organization will look like five, 10 oreven 20 years from now. Futurists recommend looking at current andpotential future problems and imagining what kinds of jobs would needto be created to tackle those problems. This can be through addingnew skills to existing jobs, combining skills and functions or addressingbusiness problems through the creation of entirely new jobs.• Conduct a skills audit to see if your organization has pockets ofunderutilized or underemployed employees that could be moreeffectively deployed.• Get involved in local and national efforts to promote workforce readinessand improvements in all levels of education.• Promote secure retirement through financial education classes andautomatic enrollment in defined contribution retirement plans.• Consider how a rise in living costs will impact employees. Will risinggas prices encourage employees to live closer to work or ask fortelecommuting options? Will the cost of education discourage brightand capable young people from obtaining degrees, and could thisinfluence your future labor pool?• Use your HR expertise to give back to the community by working withyour local employment groups/agencies, SHRM chapters or other HRgroups to help job-seekers by reviewing resumes and helping withinterview preparation.SHRM WORKPLACE FORECAST 21
23. 22 SHRM WORKPLACE FORECASTFrom one perspective, advancementsin technology have streamlinedmany of the tasks HR profession-als previously spent much of theirtime on, but in other ways, technol-ogy has created layers of complexityto the HR function by exponentiallyincreasing the types of data and met-rics HR professionals are expected toleverage, particularly in the realm ofrecruiting and staffing. Though jobcandidates can be vetted more easilythrough the ubiquity of social mediaand new software that automaticallyroutes applicants to hiring profession-als based on their knowledge, skillsand abilities, many HR profession-als report that e-recruiting also hasScience and TechnologyTable 10 Top science and technology trendsMajorstrategicimpactMinoroperationalimpactNo impactLack of science and engineering graduates and workers in the United Statescompared with many other countries 53% 34% 13%Rapid growth of employee and business use of electronic social networkingsites (e.g., Facebook, LinkedIn) 48% 44% 8%Use of technology to eliminate geographic barriers in the workplace 48% 43% 9%Increased vulnerability of business technology to attack or disaster 47% 45% 8%Increasing divide between technology-savvy employees and those unfamiliarwith the latest technologies 42% 48% 10%Increase in business research and development investment in emergingeconomies 41% 39% 20%Increased use of Internet recruiting (i.e., e-recruiting) 38% 51% 11%Continued development and use of e-learning applications and tools 35% 53% 12%Increased intellectual property theft 34% 49% 17%Business and consumer adoption of “green” technologies (i.e., sustainabletechnologies that do minimal damage to the environment) 33% 52% 15%Loss of employee privacy as a result of technology (information about people’spresent and past more easily obtained) 32% 55% 13%Decrease in training budgets 29% 58% 13%Increase in training due to wide availability of low-cost technology-basedtraining 28% 60% 12%Increased worker productivity 27% 60% 13%Growing adoption of standards for data exchange between human resourceinformation systems (HRIS) 25% 57% 18%Rising threat of global health pandemics 25% 61% 14%Growth in the availability of HR management software aimed at and used bysmall businesses without HR staff 15% 60% 25%Source: SHRM Workplace Forecast (SHRM, 2011)
24. SHRM WORKPLACE FORECAST 23led to an explosion in the number ofcandidates they are fielding.Technological improvements inmanufacturing and other sectorsare creating new challenges for HRprofessionals and the employees theyrepresent. Specifically, tech-basedimprovements in the productionprocess have eliminated the needfor many workers, and HR depart-ments have been forced to changetheir recruiting strategies to keep upwith the high-tech movement in theworkplace.The rapid pace of change in technol-ogy is viewed as a benefit and a con-cern, based on the responses fromHR professionals. They cite a lack ofscience and engineering graduatesand workers in the United States asa detriment to the labor force, andthey also are wary of their businesses’susceptibility to computer hackersand other tech-related maladies. HRprofessionals also acknowledge thereis a growing gap between the tech-savvy and the tech-novice membersof their workforce.In response, HR professionals areexpanding the use of e-learningto better arm their workers withtech and other skills, and they alsoare updating technology policiesto reflect social media’s growingpresence.Lack of science andengineering graduates andworkers in the United StatesAs much of the developed worldshifts toward a knowledge-basedeconomy, where science and techni-cal skills are paramount, the demandfor these skills has clearly increased.HR professionals say the pendingshortage of candidates with this typeof expertise is of great concern; 53%of respondents said this has a majorstrategic impact on their operations,and another 34% said it has a minorstrategic impact (see Table 10).Whether or not there will be a dearthof U.S. workers in the science andengineering fields depends on whomyou ask. According to the Nation-al Science Foundation (NSF), thenumber of bachelor-level degreesconferred in China in natural sciencesand engineering (NS E), for exam-ple, grew from 239,000 in 1998 to807,000 in 2006. New NS E de-grees earned by Japanese and SouthKorean students combined in 2006was 235,000—roughly the sameamount of NS E degrees conferredin the United States in 2006, eventhough the U.S. population is con-siderably larger than the populationof those two countries (300 millionversus 175 million), the NSF says.Increased globalization has openedthe doors for science and technologyworkers to pursue these fields in theirhome countries. Furthermore, thosewho enter these fields of study in theUnited States are not as likely to beAmerican citizens: foreign nation-als have earned more than half of theU.S.-based NS E doctorates since2006, according to the NSF.27However, others say the UnitedStates remains a force in science andtechnology development and thatthe concerns about the shortage ofNS E workers may be overblown.The United States accounts for 40%of the world’s spending on scien-tific research and development andemploys 70% of the world’s NobelPrize winners, according to a 2008study by the Rand Corporation. Theflow of foreign-born science andengineering experts into the UnitedStates actually is to the country’sbenefit, according to Rand’s re-search. The study did acknowledge,however, that other nations are “rap-idly educating their populations inscience and technology.” The Euro-pean Union and China, for instance,are graduating more university-edu-cated scientists and engineers everyyear than the United States.28Rapid growth of employeeand business use ofsocial networking sitesWith hundreds of millions of per-sonal users on sites like Facebook,Twitter and LinkedIn, as well as anincreasing number of companies thatsell their wares through these medi-ums, social networking has become acrucial segment of doing business inthe United States. Some companiesare still learning what it all means fortheir operations, but HR profession-als are keeping busy developing poli-cies for using these websites at work.In 2009, one out of four HR profes-sionals said their organizations usedsocial networking sites to look upcandidates before inviting them foran interview. In 2008, only 3% of or-ganizations incorporated that practiceinto their recruiting, according to aSHRM poll from November 2009.That same poll revealed that 86% ofHR professionals said they would beless likely to hire a candidate whosesocial networking profile showed evi-dence of “unprofessional behavior”
25. 24 SHRM WORKPLACE FORECAST(see Figure 6).29At the same time, so-cial networking and the ever-growingblogosphere can help prospective jobcandidates learn more about employ-ers before an interview. Chat boardsdevoted to consumers and job seekerscan often serve as clearinghouses forinformation about companies. Manycompanies are now hiring “social me-dia managers” to help them navigatethis new Internet phenomenon.Use of technology toeliminate geographicbarriers in the workplaceTechnological advancements areat the heart of an economy that isincreasingly global in nature. There-fore, it is no surprise that a combined91% of HR professionals said thatthe use of technology to eliminategeographic barriers has some level ofstrategic impact on their operations,as shown in Table 10.From a recruiting standpoint, therehave been improvements in areassuch as video interviewing and con-ferencing, and sourcing technology,which allows hiring experts to trackprospective job candidates anywherein the world. “Distance learning”and the use of the Internet for pro-fessional development or to obtaineducation also has surged recently,particularly for companies with mul-tiple domestic and/or internationallocations. Many companies also aredevoting part of their budgets spe-cifically for search engine optimiza-tion, or SEO, in order to make theirinformation readily available when ajob seeker conducts an online search.Even with all of these tools available,experts warn that the human ele-ment still is very important to work-ers and prospective job candidates.30Technology should serve as a com-plement to the recruiting processand the general operations of a com-pany, and not as the sole solution.Increased vulnerabilityof business technologyto attack or disasterThere is perhaps universal agreementin the technology community thatthe threat of hackers, spam and othersoftware maladies has risen in recentyears. And HR professionals agree—acombined 92% of respondents in thissurvey said their businesses’ height-ened exposure to a technologicalattack or disaster has some level ofstrategic impact on operations (seeTable 10).Several software industry companieshave recently issued reports that re-inforce this theory. A 2010 survey bySymantec found that small and mid-sized businesses (10 to 499 employ-ees) are now making IT protectiontheir highest priority. Those types ofcompanies are spending an averageof $51,000 a year and two-thirds oftheir IT staff time on informationprotection, computer security and di-saster preparedness, the survey said.31Worldwide security software revenueis expected to surpass $16.5 billionin 2010, an 11.3% increase from2009, according to IT research com-pany Gartner.32A report by securitytechnology company McAfee saidthat production and distribution of“malware,” or malicious software,reached its highest levels ever in thefirst half of 2010. About 55,000 newpieces of malware appear every day incomputer systems around the world,according to McAfee’s report.33Not coincidentally, the business sec-tor was spending more on comput-er hardware and software in 2010.Private investment of informationprocessing equipment and software inthe United States was $598.6 billionin the third quarter of 2010, accord-ing to the U.S. Bureau of EconomicAnalysis. That is a sharp increase from$533.7 billion in the third quarter of2009 (see Figure 7).34Increasing divide betweentechnology-savvy employeesand those unfamiliar withthe latest technologiesThe phrase “digital divide” oftenrefers to the gap between heavilywired (and wireless) urban areas andrural regions that lack high-speedFigure 6 If a job candidate’s social networking profile showed evidence of unprofessional behavior, to whatextent would you be less likely to hire the candidate?Not at all less likely; that’s the candidate’s personal life 14%Somewhat less likely 45%A lot less likely; it tells a lot about the candidate as a person 41%Source: Society for Human Resource Management. (2009, November). SHRM poll: Interviewing do’s and don’ts for job seekers.
26. SHRM WORKPLACE FORECAST 25Internet access. But many observerssay there is also a chasm growing inthe workplace between tech-mindedworkers and their less technologicallyliterate co-workers.Millennials widely are regarded asthe first generation to grow up withcomputer/Internet access read-ily available at all times. In con-trast, many longtime members ofthe labor force have only recentlylearned the ins and outs of the onlineworld. This is perhaps why a com-bined 90% of HR professionals inthis survey said the “workplace digi-tal divide” has some level of impacton their operations.In response, more than half of HRprofessionals said they were expand-ing the use of “e-learning” (52%)and the use of technology-basedemployee and manager self-serviceapplications (51%). Other SHRMdata show that more employers areencouraging workers of all ages toembrace technology on the job.A December 2009 SHRM pollrevealed that 52% of companiesprovide for their employees “virtualwork options,” or scenarios thatallow for work away from the com-pany premises, and 22% anticipate anincrease in the number of employ-ees who work out of the office, asdepicted in Figure 8.35Increase in business researchand development investmentin emerging economiesBooming economies and largenumbers of science and engineer-ing graduates are making emergingeconomies much more attractivelocations for large multinationalorganizations to establish researchand development (RD) cen-ters. In November 2010, diabetesresearch company Novo Nordiskannounced it would commit up to$100 million to expand its BeijingRD center, saying the growth inits China RD operations, expectedto be completed in 2012, will makeits center the largest wholly ownedforeign RD operation in China.36Other companies are followingsuit. These kinds of investments aredriven by a number of factors. First,the cost of operating high-tech labsis much lower in emerging econo-mies compared with those in devel-oped economies. In addition, thesedynamic economies are producinglarge numbers of qualified scientistsand researchers, and perhaps mostimportant of all, they represent hugepotential new markets. As morecompanies set up research labs inthese markets, they may encountersome challenges related to creat-ing a common company culture ofinnovation across borders. But theyalso may find that they benefit fromnew approaches to solving problems,which can be integrated into the waythey do business across the globe.Increased use of e-recruitingA common recruiting challengeshared by many HR and staffingprofessionals over the course ofthe 2007-2009 recession was thatthe sheer number of applicants foreach job made it much more dif-ficult to locate the most promisingcandidates. Many have turned toe-recruiting technologies to makethe process easier. The most valuedaspect of such technologies is theability to improve job matching andenhance search capacity when mas-sive numbers of applications mustbe processed. But the ease withwhich these technologies make theprocess of both applying for a joband sorting through candidatesincreases the number of individualslikely to submit an application andcan be over-relied on for sortingthrough candidate qualifications.Figure 7 Private sector investment in technology (in billions of dollars)Computers and peripheralequipment96.978.9Information processingequipment and software 533.7598.6Equipment and software907.21,061.1 Software288.8260Third Quarter 2010 Third Quarter 2009Source: U.S. Bureau of Economic Analysis (November 2010)
27. 26 SHRM WORKPLACE FORECASTImproved, more customized tech-nologies and those that target pas-sive job seekers will continue to tryto address these problems.As the economy improves andthe demand for skilled workersincreases, technologies that findpotential qualified applicants—even those not actively searching—will be valued. The use of niche jobboards and social and professionalnetworking sites for recruiting alsomay increase as recruiters look toany and all ways to find the candi-dates they need.Continued developmentand use of e-learningapplications and toolsOne area of investment that wasfirst to experience major cost-cut-ting when the global economytook a nosedive was training anddevelopment for employees. Yet atthe same time, organizations weredemanding more from leaner work-forces. This drive to increase pro-ductivity by improving employeeskills while still keeping trainingand development costs down islikely to have encouraged the useof low-cost e-learning applica-tions. Technological improvementsare poised to make the e-learningexperience much more immer-sive and interesting for the learner.Organizational development profes-sionals will leverage these improvedFigure 8 Anticipated change in the number of employees who work out of office76%3%DecreaseStay the sameIncrease 22%Source: Society for Human Resource Management. (2009, December). SHRM poll: Transitioning to a virtual organization. Retrieved fromwww.shrm.org.Top trends from SHRM’s Technology and HR Management Special Expertise Panel1. Information and actions are increasingly portable viamobile applications.2. The availability of various social media and theincreasing complexity of intellectual property areincreasing the need to establish and improvetechnology governance and policies.3. The use of cloud computing (reliance on onlineapplications for various technology needs) isincreasing.4. Organizations increasingly are adopting viral recruitingand social media for employer brand messaging (e.g.,Facebook, Twitter).5. The economy is having a slowing effect on enterpriseprojects, which, in turn, affects technology—bothnow and when things shift back in recovery:Transformation projects are decreasing, new projectsrequire longer decision times, cost-cutting initiativesare increasing, organizations are breaking largerprojects into a series of smaller ones, globalizationefforts are on hold, software and implementationprices are lower.6. Talent management platforms are undergoing productconsolidation, shifting away from siloed applicationstoward total solution suites that support a holisticview of talent management.7. There is growth in the area of both candidate-management and employer-management tools.8. The availability of dynamic collaboration tools isaltering the importance of organizational knowledgeversus social hierarchy.9. As more companies produce various kinds ofsustainability reports (e.g., carbon disclosurereports), employees will require training in the useof sustainability software, carbon impact databasedevelopment, calculations of waste resource useinto carbon impact statements, as well as overallemployee training in process changes, governance,risk and compliance.10. Organizational and individual information increasinglyis transparent (e.g., profiling of hiring managers,Japan’s mega-database of all potential employees).Source: Society for Human Resource Management. (2009). Future insights: Top trends according to the SHRM Special ExpertisePanels. Retrieved on December 17, 2010, from www.shrm.org.
28. SHRM WORKPLACE FORECAST 27tools to create more customizedlearning applications that can beeasily updated through web-baseddelivery. Smartphones, tablets andother portable electronic devicesalso will make it easier to trainemployees on the move and mayencourage a more “just-in-time”approach to delivering training.Increased intellectualproperty theftIn February 2010, the U.S. AttorneyGeneral announced the formationof a new Department of Justice TaskForce on Intellectual Property aspart of a department-wide initiativeto confront the growing number ofdomestic and international intel-lectual property (IP) crimes. Alongwith working with other bodies toenforce intellectual property laws,the task force also was tasked withstepping up policy engagement withforeign law enforcement partners,developing a plan to expand civilIP enforcement efforts and leverag-ing existing partnerships with federalagencies and independent regulatoryauthorities such as the Department ofHomeland Security and the FederalCommunications Commission. Inthe wake of the publication of clas-sified documents by WikiLeaksand other media outlets and awide-ranging Wall Street insidertrading probe that developed in thesecond half of 2010, businesses alsoare beefing up their data securitymeasures. This may influence howknowledge-producing employees aremanaged and, in some cases, moni-tored. Currently, only 16% of HRprofessionals say their organizationshave invested in employee electronicsurveillance, but another 9% say theyplan to do so in the coming years.Depending on the industry, thesekinds of measures may become morecommon. HR professionals will betasked with balancing the need toput in place policies that protect theirorganizations’ IP while maintain-ing a culture of trust and respect foremployee privacy.Business and consumeradoption of “green”technologiesAccording to SHRM’s recent re-port, Advancing Sustainability: TheRole of HR, almost three-quartersof organizations reported engagingin sustainable workplace or busi-ness practices. But the likelihoodof formally adopting greener, moresustainable and socially responsiblebusiness practices varies dependingon the type of organization. Large-and medium-sized organizations,publicly owned for-profit compa-nies and firms with multination-al operation locations were morelikely to report that they engage insustainable workplace or businesspractices. The key drivers for invest-ing in more sustainable and sociallyresponsible ways of working were:1) contribution to society, 2) com-petitive financial advantage, 3) envi-ronmental considerations, 4) savingmoney on operational costs, and5) health and safety considerations.HR professionals reported severalimportant positive outcomes result-ing from their greater investment insustainability, including:• Improved employee morale.• More efficient businessprocesses.• A stronger public image.• Increased employee loyalty.• Increased brand recognition.37More and more, organizations thatare not paying attention to this issuewill be at a disadvantage from both acost-saving and innovation perspec-tive. Most importantly for HR pro-fessionals, the adoption of greenertechnologies or more efficient,greener ways of working will havea direct impact on their employerbrand.Figure 9 Focus on sustainability over time32%2% 66%2 years1% 27% 72%5 years12 months54%1% 45%Decreased Stayed the same IncreasedSource: Society for Human Resource Management. (2011). Advancing sustainability: The role of HR. Alexandria, VA: SHRM.
29. How HR professionals are responding to science and technology trendsTable 11 Top actions organizations are taking in response to science and technology trendsYes,currently doingNo Plan toTaking steps to protect employees in the event of a major health epidemic 62% 27% 11%Updating technology use policies for employees (use of social networkingsites, e-mail for non-business use, etc.) 58% 16% 26%Investing in technology and services designed to protect company data inthe event of disaster or cyber attack 57% 18% 25%Increasing the use of technology to perform transactional HR functions suchas paperless pay 56% 24% 20%Non-disclosure/non-compete agreements for intellectual property 53% 41% 6%Expanding the use of e-learning 52% 23% 25%Expanding the use of technology-based employee and manager self-serviceapplications 51% 22% 27%Moving to an Internet-based system for the delivery and utilization of HRapplications 48% 29% 23%Using social networking sites for recruiting, employer branding and otherpurposes 47% 34% 19%Increasing investment in Internet recruiting (i.e., e-recruiting) 46% 34% 20%Increasing the use of collaborative technologies that allow employees towork from anywhere 44% 37% 19%Changing work processes to make them more environmentally friendly 43% 37% 20%Increasing the use of workforce planning and decision tools 40% 34% 26%Using metrics to demonstrate HR’s return on investment 36% 43% 21%Increasing employee electronic surveillance 16% 75% 9%Source: SHRM Workplace Forecast (SHRM, 2011)28 SHRM WORKPLACE FORECAST
30. HRprofessionals are wellaware that in order tosucceed, they must find ways toleverage technology to streamlineHR processes, reduce costs andcreate a more productive workenvironment. The development ofgame-changing new technologiescontinues at a rapid pace, andtechnological improvementsform the backdrop to many ofthe most important businessand economic trends of today.Many of the ways HR profession-als are responding to science andtechnology trends reveal an under-lying recognition of threats in theenvironment, whether the need toprotect employees from new strainsof disease, protect company intel-lectual property and data, or moni-tor to make sure technology isn’tmisused. But most of the ways HRprofessionals say they are respond-ing to these trends highlight thepositive uses of technology andhow they proactively can be har-nessed to improve the recruitingprocess, help employees learn andwork collaboratively, and protectthe environment. The professionitself also is coming to be seen ina more scientific light, with anemphasis on demonstrating a solidreturn on investment for HR ini-tiatives. HR professionals also aredeveloping and using more robustHR metrics to further evaluate andevolve toward greater efficiency andeffectiveness.Other ideas to consider• Analyze what impact automation and new technologies will have on jobroles and tasks in the future in your industry and organization, includingHR jobs and functions.• Consider working with higher education providers to develop educationprograms that explore new technologies for your industry and helpbuild the pipeline of future skilled technical workers.• Work with the technology function in your organization to createcontingency plans in the case of data loss or theft. Get employeesinvolved by offering training on how to comply with data protectionregulations and prevent identity theft.• Educate employees on the importance of intellectual propertyand provide clarity on what kinds of information is owned by theorganization or otherwise protected.• Make use of the many HR blogs, online resources and shrm.org toaccess information, network with other HR professionals and stay up-to-date.• Work with local health care providers to offer employees flu shotsand create contingency plans (telecommuting, alternative workarrangements) in the case of a major flu outbreak or other publichealth emergency.• Review the kinds of data captured by your organization as well asexisting HR metrics to see if this data can be leveraged in new ways toimprove workforce planning or streamline HR processes.• Give back to the profession by participating in research projects (suchas the SHRM Leading Indicators of National Employment /LINE) thatleverage HR’s unique insight into the changing workplace to createvaluable data on trends in the workplace and the economy.SHRM WORKPLACE FORECAST 29
31. 30 SHRM WORKPLACE FORECASTToday, one of the most importantunderlying forces shaping trendsacross the board is globalization.For HR professionals, globalizationalso forms the backdrop to someof the most significant challengesand opportunities they face as theytry to find and manage the bestworkers or deal with the impact ofglobal competition on wages, workprocesses and the war for talent.Globalization does not only repre-sent the increased mobility of capi-tal or goods; one of its most centralcharacteristics is the movementof workers into different markets.The closer integration of worldmarkets has a direct impact onthis movement of skills and talent,and when one economy faces dif-ficulties, other national economiesincreasingly feel the effects in bothgood and bad ways. For example,GlobalizationTable 12 Top globalization trendsMajor strategicimpactMinor operationalimpactNo impactIncreased global competition for jobs, markets and talent 72% 22% 6%Economic growth of emerging markets such as India, China and Brazil 63% 24% 13%Greater need for cross-cultural understanding/savvy in businesssettings 61% 32% 7%Increased expansion of U.S. companies into the global marketplace 59% 34% 7%Growing importance of managing talent globally 58% 29% 13%Increased global labor mobility 48% 44% 8%Increased multiculturalism within organizations 45% 48% 7%Increased use of virtual global teams 45% 40% 15%Growth of the world’s middle class consumers 43% 49% 8%Need for increased security abroad for expatriates 42% 39% 19%Stricter cross-border policies for global business practices 39% 45% 16%Rapid turnover and skills shortages in key offshoring destinationssuch as India and China 31% 47% 22%Increased economic, social and political power of women around theworld 30% 59% 11%Public backlash against globalization and power of multinationalcorporations 24% 52% 24%Increased corporate leadership role in dealing with global problemssuch as poverty and disease 23% 53% 24%Decline in the number of foreign students who stay and work in theUnited States 13% 57% 30%Source: SHRM Workplace Forecast (SHRM, 2011)
32. SHRM WORKPLACE FORECAST 31countries benefit from the growthof middle-class consumers inemerging markets if they are ableto sell them goods and services, butmay weaken if a down economycauses such consumer markets todry up. As some economies falteror political unrest intensifies, othercountries may benefit from theinflux of educated and high-skilledworkers from these lands seekingopportunities abroad, but the nega-tive repercussions of these failingeconomies on other nations’ eco-nomic health also are likely to beconsiderable.Throughout the years, HR profes-sionals have been devoting moreattention to global issues, andmany HR professionals are trulyglobal professionals in the scope oftheir work—work that may crossborders, cultures and markets.This calls upon HR practitionersto develop new competencies, pri-marily through developing cross-cultural understanding and a solidfoundation of knowledge in inter-national employment legislation,labor law and economic trends.Increased global competitionfor jobs, markets and talentIf the outcome of the opening ofmarkets around the world could besummed up in one word, it mightwell be “competition.” As moreplayers in the global marketplaceare entering the field, the level ofcompetition for resources, marketsand the best possible pool of talentfrom which to build a workforceinevitably increases. The rise inemerging markets represents liter-ally billions of new players on thisfield of global economic competi-tion. These new economic power-houses are showing that not onlycan they compete on the basis oflower labor costs, they also canlead the way in creating innovativenew business models and dynamicand successful new multinationalcompanies.An example of this change isrevealed in the most recentBloomberg BusinessWeek rankingof the 50 most innovative compa-nies in the world. In 2006 just fiveof the companies that made the listwere located in Asia, but in 2010that number had grown to 15, andfor the first time since the rank-ings began in 2005, the majorityof companies on the list were basedoutside of the United States. In fact,11 of the companies ranked couldbe viewed as originating from anemerging economy; more than halfof these companies were not evenon the list in 2009 (see Table 13).38Economic growth ofemerging markets such asIndia, China and BrazilWith emerging economies, espe-cially India and China, grow-ing and establishing themselvesas dynamic and attractive coun-tries to invest in, the number ofmultinational organizations withoperations in emerging economiesTable 13 Highest-ranking innovative companies from emerging economies in 20102010 Ranking 2009 Ranking Company Headquarters Country Headquarters Continent7 27 LG Electronics South Korea Asia8 NR BYD China Asia11 16 Samsung Electronics South Korea Asia17 13 Tata Group India Asia22 NR Hyundai Motor South Korea Asia28 NR Haier Electronics China Asia30 46 Lenovo China Asia33 15 Reliance Industries India Asia41 NR Petrobras Brazil South America44 NR China Mobile China Asia47 NR HTC Taiwan AsiaData: Analysis and data provided in collaboration with the Boston Consulting Group’s innovation practice and BCG-ValueScience. Reuters andStandard Poor’s Compustat supplied financial data; Bloomberg provided total shareholder returns.NR: Not ranked in 2009 survey.Source: Bloomberg/Business Week. (2010, April). World’s most innovative companies, 2010.
33. 32 SHRM WORKPLACE FORECASTwill grow. In fact, there is somedebate about whether to even labelcountries like India and China as“emerging” anymore, particularlyas they have come out of the mostrecent recession looking muchhealthier than many more estab-lished economies.Beginning in the 1990s, the focus ofattention has been on the so-calledBRIC economies, which stands forBrazil, Russia, India and China,largely because they were seen as thecountries with the most potentialto see a high return on investment.Financial firm Goldman Sachs,which is credited with coining theterm, reviewed the performance andpotential of the BRIC countries asthe recession started to wind down.The conclusion: The recession hasmade the BRICs even more attrac-tive to investors because they stillare considered to be the main driv-ers of the new global economy andbecause they have a recorded com-bined annual growth rate of 5.8%over the past 20 years, a much fasterrate than the 2.5% growth seen indeveloped economies. These fourcountries have a combined total of43% of the world’s population, whilethe total population in emergingmarkets overall represents a whop-ping 80% of the world’s population.These numbers clearly demonstratehow a rise in these economies willhave a huge influence on the globaleconomy.39Greater need for cross-cultural understanding/savvy in business settingsAn interesting finding when com-paring this survey’s results withthose from previous years’ SHRMWorkplace Forecast surveys is thatHR professionals are rating globalissues overall as more influentialnow than they did in the past. Thisis particularly true of the “greaterneed for cross-cultural understand-ing/savvy in business settings”as a trend. In 2008, only 48% ofHR professionals said this trendwould have a major strategic impacton the workplace. In 2011, thisnumber had risen to 61%. It maybe because more HR profession-als are becoming responsible foror are working on tasks or projectsthat have multinational or multi-cultural dimensions. This includesHR professionals in internationalorganizations that must simultane-ously recognize the need for local-ization while harmonizing policies,benefits and work processes acrossoperations in different countries.Under these circumstances, it canbe challenging to create a commonorganizational culture, but this isprecisely what many HR profes-sionals are being called upon todo in their organizations. As HRprofessionals seek to create a sharedsense of values and a strong, unifiedemployer brand that spans countriesand cultures, they must inevitablybuild stronger intercultural skillsand learn how to leverage the grow-ing diversity of their workforce tohelp understand and meet changingcustomer needs.40Increased expansion ofU.S. companies into theglobal marketplaceAlmost every organization is expand-ing into or is influenced by theglobal marketplace in one form oranother. The recession made manyorganizations reconsider where toseek out customers, and many com-panies increasingly are looking togrowing foreign markets such as theBRIC countries for either new con-sumer markets or new locations forkey operations. Generally, the two gohand-in-hand as businesses that arelooking to sell goods and services toconsumers in other countries oftenestablish a local business presenceto be closer to their customers inthese target nations. Those compa-nies that are not necessarily aiming atforeign consumer markets may stillfeel the impact of foreign competi-tion. Emerging markets operate atan advantage when it comes to keep-ing labor costs low. HR profession-als in countries where labor costs arehigher therefore are under growingpressure to find ways to reduce thecost of benefits and other labor costs.U.S. Department of Commercedata indicated that internationalexports were up in 2010 comparedwith 2009, while a May 2010 reportfrom the California-based out-sourced product fulfillment providerShipwire pointed to an increasein overseas growth of small- andmedium-sized businesses in theUnited States: aggregate customershipping data for a two-year period(2008-2009) to uncover trendsaround export and shipping foundthat while 9% of total orders wereinternational in 2008, 20% wereinternational in 2009.41Growing importance ofmanaging talent globallyIn 2010, SHRM commissionedthe Economist Intelligence Unit
34. SHRM WORKPLACE FORECAST 33to conduct a quantitative surveyof senior executives and in-depthqualitative interviews with seniorbusiness leaders to assess futureglobal workforce management is-sues and their impact on globaltalent management. The surveyfound that senior business leadersexpect a much more diverse andinternational workforce in the yearsahead (see Figure 10). Some of thekey changes to the workforce thatsenior executives expect to see inthe years ahead include:• Increasing workforce fluxwith more roles automated oroutsourced, more contingentworkers and more employeesworking flexible hours.• More diversity, with workerscoming from a greater range ofbackgrounds, where “those withlocal knowledge of an emergingmarket, a global outlook andan intuitive sense of the corpo-rate culture will be particularlyvalued.”• The ascendance of soft skillssuch as communication skills,cultural awareness and corpo-rate values that are developedthrough international assign-ments and bringing togethergroups of workers from differentcountries and functions to learnand train together.According to the report, “changesto the organizational structure andworkforce will spell new challeng-es for managers.” These new chal-lenges will include:• Understanding the worker.The survey revealed a disconnectbetween what companies offer toemployees and what respondentssay their direct reports actuallyvalue, such as decision-makingresponsibility and opportunitiesfor continued learning.• Tapping into the multicul-tural workforce. Almost 30%of survey respondents saidtheir company will use IT andsocial networking tools to tapinto the global talent pool overthe coming decade, and somecompanies are partnering withschools to develop curricula“that prepare students for workin a multinational, multiculturalcompany.”42While the economic downturnlulled some organizations intothinking they could step downtheir retention efforts, this is a riskystrategy, according to a report fromDeloitte. The report is based ona five-part longitudinal survey ofhigh-ranking executives worldwideon managing talent in a turbulenteconomy. It points to the paradoxof skills shortages during a time ofhigh unemployment and warns thatthe coming years could get evenworse for organizations that do notactively engage their global work-force: “Over the last decade com-panies facing a skills shortage havebeen able to tap into the vast globaltalent markets such as China andIndia. But as Baby Boomers retireand skills grow scarce, there willbe no additional Chinas or Indiascoming online.”43Increased globallabor mobilityThe search for better work andimproved economic prospectsdrives regional and internationallabor mobility. An increase inglobal labor mobility is expectedFigure 10 How will your organization’s workers change over the coming 10 years?Our workers will have more diverse backgroundsand experience58%Our workers will become more international incomposition48%Our workers will become more ethnically diverse 44%Our workers will better represent the countrieswhere we do business36%Our workers will travel more frequently to ouroverseas offices21%Our workers will relocate more frequently amongour overseas offices20%Our workers will have to speak an Asian language 18%Don’t know/not applicable 9%Source: Economist Intelligence Unit. (2010, September). Global firms in 2020: The next decade of change for organisations and workers.
35. 34 SHRM WORKPLACE FORECASTfrom countries like Ireland, Spainand Greece that are experiencinghigh levels of unemployment due toeconomic shocks or from emerg-ing economies to more establishedeconomies. But increasingly, labormobility may include the move ofskilled and educated workers awayfrom established economies asthey seek out new opportunities inemerging markets that are viewedas more dynamic and where thechance to build a new business isseen as most promising for aspiringentrepreneurs.According to an OECD report onthe mobility of the highly skilled,“for receiving countries, the inflowof talent has positive effects relat-ing to knowledge flows, includingthe possibility of increased RDand economic activity owing tothe availability of additional skilledworkers, improved knowledgeflows and collaboration with send-ing countries, increased enroll-ments in graduate programmes,and potential firm and job creationby immigrant entrepreneurs.” Butwhile there are concerns that theemigration of skilled workers causesa brain drain in the sending coun-try, “remittances are an importantsource of income for many low-and middle-income householdsin developing countries.”44Globallabor mobility may be growingmore fluid, with many immigrants,particularly at the highest skill andeducation levels, moving frequentlybetween countries as opportunitiespresent themselves and as improve-ments in information and com-munications technologies help tokeep individuals connected to aTop trends from SHRM’s Global Special Expertise Panel1. Talent management continues to be a highpriority and must be more efficient than beforewhile leveraging cost awareness and monitoringdemands for key positions. Finding and retainingquality talent continues to be essential to businesssustainability, but is difficult in global markets thatmay act differently in terms of opportunity and salarymovement: Should multinational companies treateveryone equally or deploy different strategies indifferent countries to pay for and retain talent?2. The need for global organizations to work virtuallyacross functions and geographies increasesand intensifies, with implications for interculturalcommunication, business ethics and organizationaleffectiveness. A new approach is needed to developglobal workforce cultures, with a better understandingof transnational teams, online collaboration,globalization and business process transformation.3. Global employee engagement is tentative; companiesthat have implemented multiple layoffs have eroded asense of security in the global workforce.4. The economic crisis and fewer existing businessopportunities will create a high demand on the globalHR function to demonstrate greater agility andcontribute strategic guidance.5. Economic uncertainties fundamentally change themotivators that attract and retain employees.6. Human capital protectionism will continue to increasein most countries in non-tariff, nationalistic forms (forexample, hire-local stipulations for bailouts, quotasfor nonimmigrant visas and similar restrictions),to the detriment of organization and countrycompetitiveness.7. The lack of visa availability and lengthy processingtimes for green cards in the United Statesprompt highly qualified non-U.S. nationals to seekemployment elsewhere, usually for non-U.S.-basedcompetitors, leaving the United States with a lessqualified, less competitive workforce.8. Global mobility of high-value workers continuesas multinational companies restrict new hires andrelocate talented employees from within their existingworkforce.9. Companies that originated in emerging economieswill continue to succeed in the global marketplace(e.g., China’s Lenovo, Mexico’s CEMEX, Peru’sAJEGROUP and others).10. More government and bilateral investments inconflict or post-conflict zones create challengesfor businesses attempting to balance their interestin expansion with the safety of operations andpersonnel.Source: Society for Human Resource Management. (2009). Future insights: Top trends according to the SHRM Special ExpertisePanels. Retrieved from www.shrm.org.
36. SHRM WORKPLACE FORECAST 35number of different cultures. Thiscould create a truly global class ofin-demand workers who are ableto adapt easily and move betweencultures.Increased multiculturalismwithin organizationsUnsurprisingly, the rise of theglobal workforce also is lead-ing to increased multiculturalismwithin companies. Organizationsaround the world are looking forthe best ways to promote diversityand inclusion. According to theresearch study conducted by theEconomist Intelligence Unit onbehalf of SHRM, more than half(55%) of the senior executives sur-veyed around the world said theyhave policies that promote diversityand inclusion either “strongly” or“very strongly,” and another 31%promote diversity and inclusion“moderately.” Only 3% do not pro-mote diversity and inclusion at all.More than one-half of respondentsfrom North America (59%), Asia-Pacific (55%) and Western Europe(55%) promote diversity and inclu-sion “strongly” or “very strongly.”Thirty-one percent of respon-dents from Asia-Pacific and NorthAmerica and 28% from WesternEurope promote diversity andinclusion “moderately.”45Aroundthe world it is the HR profession-als who are primarily responsiblefor diversity and inclusion in theirorganizations (see Figure 11).The most recent recession mayhave had some impact on diver-sity efforts. A 2010 SHRM studyprovided mostly encouraging newsabout the state of diversity in theworkplace by revealing increases inthe “percentage of companies thatprovide training on diversity issues,the number of organizations thathave a diverse board of directorsand the percentage of organiza-tions reporting that their diversitypractices were effective in achievingtheir organization’s desired out-comes.” It did find, however, thatbetween 2005 and 2010, there was“a slight decrease in the percentageof organizations with practices thataddress workplace diversity. Thisslight decline is not surprising, as itis likely attributable to the unprec-edented global economic downturnthat began in late 2007.”46 Indeed,a June 2010 poll from SHRM indi-cated that the downturn resulted inacross-the-board cuts to many HRinitiatives and practices.47Increased use of virtualglobal teamsA more distributed, global work-force and the need for specializedskills are giving rise to the use ofvirtual global teams. This is makingit more important for managers tolearn how to effectively lead virtualteams and to deal with and opti-mize cultural differences. However,the distribution of team membersmakes it more difficult to superviseand support team members in tra-ditional ways.48Some organizationsFigure 11 Who has primary responsibility for diversity and inclusion in your organization?HR/talent director 59%Other 20%Chief diversity officer (CDO) 6%Corporate social responsibility head 6%Don’t know 5%General counsel/legal 3%Source: Economist Intelligence Unit and the Society for Human Resource Management. (2009). Global diversity and inclusion: Perceptions, prac-tices and attitudes. Retrieved from www.shrm.org.Increasingly,labor mobilitymay include themove of skilledand educatedworkers awayfrom establishedeconomies asthey seek outnew opportunitiesin emergingmarkets.
37. 36 SHRM WORKPLACE FORECASTare dealing with this challenge byempowering virtual employeesinstead of relying on managementand supervision. Multinationaland international organizations arelikely to benefit the most from teamstructures that are flexible, whereteam members can build the rela-tionships that make the team mosteffective. But even in a self-regulat-ing team structure, organizations,managers and HR leaders mustgive teams clear goals and objec-tives and provide support throughcreating a culture of trust, collabo-ration and effective communicationso that global virtual teams are ableto thrive.HR professionals around theworld definitely are developinga more global mindset. In the2010 SHRM survey report, WhatSenior HR Leaders Need to Know:Perspectives from the United States,Canada, India, the Middle Eastand North Africa, senior HR pro-fessionals from the participatingregions were presented with a list of18 competencies identified throughprevious SHRM research as mostimportant for senior HR lead-ers. They were then asked to ratethese competencies based on theiroverall importance. The resultsshowed much agreement aroundseveral key competencies. Acrossall four countries/regions, the twomost highly rated competencieswere effective communication andstrategic thinking, although theorder varied by country/region (seeFigure 12). Leading change was atop competency in Canada and inthe emerging economies of India,Middle East and North Africa. TheUnited States, India and the MiddleEast and North Africa shared HRknowledge as a top competency.India and the Middle East andNorth Africa shared all five top-rated competencies, though notin the same order of importance.The HR leaders in the SHRMstudy predicted that the need tothink strategically will only growin importance; equal proportionsof respondents across all countries/regions indicated increasing impor-tance for strategic thinking andeffective communication over thenext five years.49Growth of the world’smiddle-class consumersResearch from global manage-ment consulting firm McKinsey hasfound that “middle-class consumersspan a dozen emerging nations, notjust the fast-growing BRIC coun-tries, and they include almost 2billion people, who spend a total ofFigure 12 Top five competencies for senior HR leadersUnited States(n = 566)Canada(n = 1,137)India(n = 348)Middle East andNorth Africa(n = 196)Effectivecommunication59%Strategicthinking70%Strategicthinking57%Strategicthinking70%1Strategicthinking57%Effectivecommunication48%Effectivecommunication50%Effectivecommunication50%2HRknowledge56%Persuasiveness/influencingothers45%Businessknowledge46%HRknowledge45%3Integrity38%Leadingchange42%HRknowledge36%Leadingchange44%4Ethicalbehavior37%Credibility41%Leadingchange36%Businessknowledge37%5Source: Society for Human Resource Management. (2010). What senior HR leaders need to know: Perspectives from the United States, Canada,India, the Middle East and North Africa. Alexandria, VA: SHRM.
38. SHRM WORKPLACE FORECAST 37$6.9 trillion annually.” The reportestimates that these middle-classconsumers will spend approximately$20 trillion between 2010 and2020, an amount approximatelytwice the current consumption inthe United States.50The rise of the new global middleclass will influence businesses allover the world by creating largenumbers of new consumers ofproducts and services. Companiesthat are able to establish them-selves in these markets early in theirdevelopment are likely to gain themost as this consumer base grows.This is likely to add fuel to thetrend of organizations of all sizesmaking an effort to expand andseek out customers in the globalmarketplace.Need for increased securityabroad for expatriatesPolitical unrest, such as the mas-sive wave of political protests acrossthe Arab world, terrorism andother threats have emphasized theneed to consider security care-fully when assigning employees tojobs in other countries. In addi-tion, after nearly a decade of war,anti-American and, in some cases,anti-Western views have grownprevalent in many parts of theworld. This makes it necessary fororganizations to consider how bestto market and brand their productsand also how to ensure the safetyof their employees working in high-conflict zones. Some organizationsrequire expatriate employees to livein specific locations or communitiesor undergo special training beforegoing on assignment. But even inthe case of international assign-ments to countries where threatsare minimal, HR professionals willneed to continue to focus on howto handle security issues duringthe onboarding and assimilationprocess.Local needs,laws and culturemake it impos-sible to createa completelyone-size-fits-allapproach.
39. Table 14 Top actions organizations are taking in response to globalization trendsYes,currently doingNo Plan toIntegrating HR practices across operations, including international borders 32% 57% 11%Expanding to sell products and services into the global marketplace 31% 58% 11%Expanding business operations into the global marketplace 27% 62% 11%Giving more consideration to regional political issues when makingdecision to invest abroad 23% 68% 9%Shifting to a more global organizational model 19% 72% 9%Moving business to a non-U.S. location 8% 88% 4%Offshoring jobs to countries with lower health care and other labor costs 7% 87% 6%Seeking new offshoring destinations 6% 89% 5%Source: SHRM Workplace Forecast (SHRM, 2011)How HR professionals are responding to globalization trendsOther ideas to consider• Assessments of profitability and productivity of various parts of theorganization against the performance of similar groups in the marketcan help identify where teams are not performing at the optimal level.Learning from the highest performing teams in non-home countryoperations or among foreign competitors can help boost performanceacross all teams in a multinational organization.• Look into the feasibility of redeploying employees from shrinkingoperations to those where business is growing.• Identify the locations around the globe that have the highestconcentrations of individuals with key qualifications and skills for the jobsof most strategic importance to the organization and develop scenariosthat explore how these areas could grow to become new sources ofcompetition or could be leveraged to help the organization.• Relationships with outsourced/offshored suppliers may be evolving to bemore of a partnership. Consider what the impact of a more collaborative,partnership approach versus simply a low-cost provider approach couldhave for employees and skills development throughout the supply chain.• Work with and, if needed, provide training to leaders of global virtualteams to ensure that they have the soft skills and cultural contextneeded for intercultural communications that develop trust and rapport ina virtual setting.• Investigate carefully the human resource management practices ofsuppliers and global partners to ensure they are in alignment with theorganization’s overall sustainability and corporate social responsibilityprinciples, policies and values.HRprofessionals areincreasingly takingthe lead in globalizing theirorganizations by integratingHR practices across operations.This can be challenging becauselocal needs, laws and culturemake it impossible to createa completely one-size-fits-allapproach. HR professionalstherefore are balancing theneed for localized solutionswith a more universal approachto building corporate culturethat unifies the organizationacross borders and cultures.Even organizations that are notsetting up operations overseasare expanding into the globalmarketplace. Organizationsalso are considering regionalpolitical factors when decidingwhere to set up operations,and many are offshoringjobs to reduce labor costs.38 SHRM WORKPLACE FORECAST
40. SHRM WORKPLACE FORECAST 39With the cost of health care acentral concern of HR profes-sionals across the country, it is nosurprise that the passage of federalhealth care legislation was the toppublic policy trend identified in thesurvey. Other trends HR profes-sionals believe will have a consid-erable impact on the workplaceinclude the growing complexityof legal compliance, changes inemployee rights due to legislationand/or court rulings, the grow-ing national budget deficit, changesin financial regulations, and theimpact of underfunded pensions onretirees.Table 15 Top public policy and legal trendsMajor strategicimpactMinoroperationalimpactNo impactPassage of federal health care legislation 82% 18% 0%Growing complexity of legal compliance for employers 72% 27% 1%Changes in employee rights due to legislation and/or court rulings 67% 31% 3%Growing national budget deficit 61% 35% 4%Changes in financial regulations 59% 38% 3%The impact of underfunded pensions on retirees and the stability of thefederal Pension Benefit Guaranty Corporation 50% 38% 12%Implications of the outcome of the 2010 congressional elections 42% 49% 9%Proposed immigration laws in relation to H-1B visas and high-skilledforeign workers 42% 46% 12%Increase in global environmental legislation 34% 54% 12%Unions increasing their allocation of resources devoted to political lobbying 34% 48% 18%Increase in the legal retirement age in countries with aging populations 31% 48% 21%Proposed immigration laws that prosecute employers for hiring illegal/undocumented workers 31% 48% 21%Increase in discrimination litigation based on national origin 28% 60% 12%Increase in litigation involving overtime pay for exempt/white-collar workers 26% 54% 20%Increase in age discrimination litigation 24% 59% 17%Increase in discrimination litigation based on sexual orientation 24% 60% 16%Increase in discrimination litigation involving individuals with disabilities 23% 63% 14%Increase in religious discrimination litigation 19% 60% 21%Increase in race discrimination litigation 18% 64% 18%Increase in sex discrimination litigation 14% 64% 22%Source: SHRM Workplace Forecast (SHRM, 2011)Public Policy and Law
41. 40 SHRM WORKPLACE FORECASTPassage of federalhealth care legislationThe passage of federal health carelegislation is the top public policytrend according to HR profes-sionals. Not only is the cost ofhealth care in general one of theirmost pressing concerns, they areunder pressure from their orga-nizational leaders to explain theimplications of the new law andto make recommendations abouthow their businesses should re-spond (see Figure 13). The areasthat HR professionals currentlyare most likely to be addressing tohelp their organizational leader-ship understand the new law are:• Improving their overall knowl-edge of the new health carereform law.• Determining which actionstheir organizations need to takeimmediately.• Identifying the changes theirorganizations need to make totheir current health care plan tobe compliant.• Determining both the imme-diate financial implications andthe future financial implicationsbeyond 2011 (see Table 16).51The actions HR professionals aretaking or planning to take includeworking with legal and/or benefitscounsel to help their organizationsunderstand the implications of thenew law, sending HR staff in theirorganizations to classes to learndetails of the new law, partneringwith current health benefits provid-ers to design health care plans thatwill include areas affected by thenew law, developing health carecost analysis for organization’s lead-ers, and analyzing the short-termfinancial impact of the new law andthe feasibility of offering healthcare (see Table 17).52A key question is whether organi-zations will decide to drop healthcare coverage. But even as early asJune 2010, a SHRM poll revealedthat nearly one-half of organizations(46%) had already decided not todrop health care coverage as a resultof the health care reform. Financialimplications aside, responding HRprofessionals said the primary rea-sons that their employers wouldnot drop health coverage were: 1) itwould lower employee morale andjob satisfaction, 2) it would makethe organization uncompetitive inrecruiting new employees, and 3) itwould send a message that the orga-nization does not value the health ofits workers. Nevertheless, the uncer-tainty surrounding the health carebill and the increased costs associ-ated with providing health coverageare weighing on HR professionalsand their employers. The same pollshowed that 41% of organizationsare likely to pass increased healthcare coverage costs to employees in2011, regardless of whether thoseexpenses are associated with the newlaw. More than one-third (34%)of organizations are consideringalternative insurance plans for theirworkers as a result of the new leg-islation, and another 32% said theywould be likely to drop health carecoverage and pay the government’s“opt-out fine” if it would save theirorganization a substantial amountof money (see Figure 14).53Figure 13 Has senior management in your organization asked HR to provide an overview of the implications ofthe new health care reform law for the organization?Yes54%No46%Source: Society for Human Resource Management. (2010, September). SHRM poll: Organizations’ response to health care reform—seniormanagement’s requests. Retrieved from www.shrm.org.
42. SHRM WORKPLACE FORECAST 41Growing complexity of legalcompliance for employersIn addition to the new federal healthcare legislation, state and federallawmakers continue to develop newlaws that could influence the work-place and require HR profession-als to be vigilant in keeping up withtheir knowledge of new legislation orregulations in order to ensure theirorganizations’ compliance. Examplesinclude the introduction or possibleTable 17 What actions has your organization taken in response to the passage of the new health care reformbill?Alreadydoing/donePlanningto doCurrently NOT doing andhave NO plans to doWorking with legal and/or benefits counsel to help the organizationunderstand the implications of the new law 80% 15% 5%Sending HR staff to classes (e.g., attending seminars, participatingin webcasts on this topic) to learn details of the new law and itsimpact on the organization 78% 14% 8%Partnering with current health benefits provider to design a healthcare plan that will include areas affected by the new law 75% 24% 1%Developing health care cost analysis for organization’s leaders 59% 35% 7%Analyzing short-term financial impact of the new law and thefeasibility of offering health care 57% 33% 10%Developing a new health care strategy plan for the organization 48% 39% 13%Developing an employee communication strategy related to thenew law 45% 46% 9%Developing employee communication on the impact of the new lawon the organization’s health care plan and the employees 41% 54% 6%Analyzing long-term financial impact of the new law and thefeasibility of offering health care 38% 54% 9%Communicating impact of the new law to employees 37% 57% 7%Communicating impact of the new law to retirees 12% 40% 48%Source: Society for Human Resource Management. (2010, September 17). SHRM poll: Organizations’ response to health care reform—challengesand actions. Retrieved from www.shrm.org.Table 16 Which of the following issues has your HR team addressed or is it continuing to address in order tohelp the leadership of your organization better understand the new health care reform law and itsimplications?Overall knowledge of the new health care reform law 51%Actions your organization needs to take immediately 49%Changes your organization needs to make to its current health care plan to be compliant 47%The immediate financial implications 46%The future financial implications (beyond 2011) 39%Affordability of your health care plan for current employees 31%Health care as part of the total compensation package 24%Resources available to help the organization analyze, design and communicate health care plan tostakeholders 20%Possible penalties your organization could incur if it doesn’t comply with the new health care reform law,decides not to offer health care to employees or makes changes to the plan 16%Deciding who is the best resource (e.g., counsel/consultant) to explain the new health care reform law 13%Investigating the impact of the new health care reform law on part-time employees in the organization 9%Determining the impact on recruitment and retention strategies 7%Developing a plan on how to figure out each employee’s household income 3%Other 3%Source: Society for Human Resource Management. (2010, September 17). SHRM poll: Organizations’ response to health care reform—seniormanagement’s requests. Retrieved from www.shrm.org.
43. 42 SHRM WORKPLACE FORECASTintroduction of bills related tobackground and credit checks forjob applicants and workplace flex-ibility. In 2010, U.S. Citizenshipand Immigration Services (USCIS)also increased monitoring of H-1Bnonimmigrant visa petitions andthe number of site visits to compa-nies petitioning for temporary workvisas on behalf of employees. Andbecause so many organizations areusing contingent workers until theyfeel more confident about an eco-nomic recovery, modifications inregulations that clarify or define whatclassifies a worker as an independentcontractor could influence manyemployees and employers. States alsoare increasingly proposing and pass-ing wage-and-hour legislation, andsome states are choosing to providegreater coverage than federal lawssuch as the FLSA.Changes in employeerights due to legislationand/or court rulingsOften state legislation expandsemployee rights beyond whatis federally mandated. In somecases, court rulings also changehow employee rights in the work-place are interpreted. HR profes-sionals must continue to monitorthese developments to make surethat their organizations continueto comply with the law and avoidcostly litigation. For multistateemployers, variation in state lawscan create even more complexitynot only in relation to compliancebut also from an employee relationsstandpoint; employees in differentstates may be upset by perceiveddifferences in employee rights thatresult from different state laws.State laws related to credit and back-ground checks of job candidatescould be one area where changesoccur. Hawaii, Illinois, Oregon andWashington all have enacted lawsrestricting the use of credit reportsfor employment-related decisions,arguing that it could be discrimina-tory. More states may pass similarlaws over the coming years.Growing nationalbudget deficitThe national budget deficit is theamount of money a country spendsbeyond its ability to pay, and themoney a country borrows to payfor this difference is the nationaldebt. Countries around the worldare experiencing both high nationalbudget deficits and high levels ofnational debt. Increasingly, thisis resulting in austerity measuresthat are aimed at reducing nationaldebt levels. Several countries haveattempted to lower their nationaldeficits by reducing some types ofgovernment benefits, raising theofficial retirement age or increas-ing higher education tuition costs.Many of these measures have beenmet with public hostility and, insome cases, protests, most nota-bly in Greece, Spain, France andthe United Kingdom. Yet policyexperts and government leaderscontend that only by taking thesehard measures today can furtherhardship be avoided in the future.The U.S. government posted a$1.3 trillion budget deficit for fiscalFigure 14 If you decide to drop health care coverage and pay the government’s “opt-out” fine, what would beyour organization’s primary reason for doing so?5%Other50%Unsure at this time10%Not applicable; would not drop health care coverage9%Dropping coverage would ultimately lower employees’ totalcontributions to their health care coverage9%Dropping coverage would encourage employees to takemore responsibility for making sound health care decisions14%Dropping coverage and providing equal compensation toemployees would be viewed positively by employees32%Dropping health care coverage would save the organizationa substantial amount of moneySource: Society for Human Resource Management. (2010, June). SHRM poll: Health care reform. Retrieved from www.shrm.org.
44. SHRM WORKPLACE FORECAST 43year 2010, and as of September2010, the Total Public DebtOutstanding was more than $13trillion. With federal spending out-running income for more than twoyears and with the United Statesexpected to post a budget deficitof more than $1 trillion for thethird year in a row in fiscal 2011,54the U.S. government also has beenseeking ways to reduce spending.Many of the areas of savings beingproposed by various commissions andconcerned groups involve changesthat could impact employers. Theseinclude changes in the taxation ofcompensation such as health careand retirement benefits and extend-ing the age of eligibility for SocialSecurity. In December 2010, the finalreport of President Obama’s NationalCommission on Fiscal Responsibilityand Reform, led by former SenatorAlan Simpson and former WhiteHouse Chief of Staff Erskine Bowles,called for about $4 trillion in budgetsavings over a decade. The recom-mendations included cuts in militaryspending, a higher retirement age andother reforms.55But though many welcomed thereport as an important step inavoiding the fate of countries suchas Greece and Ireland, where fiscalcrises are forcing sharp across-the-board cuts, there were doubts overwhether there would be enoughbipartisan consensus to movethe recommendations forward.Businesses and HR professionalswill feel the effects of both actionand inaction on the problem ofnational deficits and debt in coun-tries around the globe. This issuewill influence international marketsand investments, taxation in the vari-ous countries where organizationsdo business, as well as the cost ofeducation and retirement. HigherTop trends from SHRM’s Labor Relations Special Expertise Panel1. Labor relations expertise is diminishing within theHR profession, due to such factors as the retirementof more Baby Boomers and many Millennials/GenXers purposefully avoiding the area. Nevertheless,HR professionals’ interest in labor relations andawareness of the importance of general—rather thanjust specialized—HR has increased as a result ofproposed labor legislation.2. The National Labor Relations Board (NLRB) is expectedto become more of an activist through rulemaking aswell as reversing prior Bush NLRB decisions.3. Unions are consolidating and collaborating toincrease political leverage and market density.4. Unions have an increased stake in many businessesas a result of the government’s intervention in thefinancial crisis, and unions will position themselves toregain concessions made once the economy turnsaround. The recession also has increased the role ofbankruptcy law, dramatically affecting labor relations.5. Union organizing is intensifying among automotivetechnicians and in the health care, nursing home,hospitality and child care service sectors. Thenoticeable relocation of many manufacturing jobs tothe South is likely to result in increased organizinginitiatives.6. There has been a decline in union apprenticeshipprograms, prompting a need for alternatives.7. State legislatures and governors are paying moreattention to labor relations areas not pre-empted bythe National Labor Relations Act and increasingly aretargeting employers for misclassifying employees asindependent contractors.8. Labor law increasingly is influenced by globalization,trade agreements and global labor standards. Inaddition, there is pressure to include labor-friendlyprovisions in standardized trade agreements anddiscourage offshoring through proposed tax changes.9. Unions are more involved with health insurance andretirement accounts, becoming brokers of record oracting as brokers, which can be lucrative.10. Unions of federal government workers are poised foradditional gains in the scope of bargaining matters,and unions are seeking to broaden their penetrationrate among state and local employees.Source: Society for Human Resource Management. (2009). Future insights: Top trends according to the SHRM Special ExpertisePanels. Retrieved from www.shrm.org.
45. 44 SHRM WORKPLACE FORECASTeducation costs in particular mayinfluence the availability of neededskills in the future workforce.Changes in financialregulationsMore than two years after theheight of the banking and finan-cial crisis, changes to financialregulations still are underway. InNovember 2010, the Group of 20(G20) leading nations ratified rulesto limit risk at the world’s largestbanks, mainly by requiring compa-nies to hold capital reserves that areat least double what was mandatedin the past. This was done in thehope that this more conservativeapproach will make large banksless prone to crises. There remainareas of disagreement among coun-tries because the economic crisishas affected different regions ofthe world in different ways, andthere is uncertainty around howregulations could hinder eco-nomic growth in some regions. Forexample, while the G20 endorsed aseries of major reforms to bankingand financial market regulations,Asian regulators have raised con-cerns that some of these reformscreate difficulties for their mar-kets.56As Asian economies grow,they will seek to have a greatervoice in global financial regulatoryreform, and this may make it moredifficult to arrive at a common setof guidelines in the future.The impact of underfundedpensions on retirees and thestability of the federal PensionBenefit Guaranty CorporationFewer employers are offering pen-sion plans to their employees, but forthose that do, an increasing numberare holding underfunded plans.These plans do not have enoughmoney to cover all pensions owedcurrently or in the future. Employees’lack of certainty that they will be ableto access their pensions is likely tohave an impact on both employeerelations and retirement security.Employers can terminate theirpension plans in a standard ter-mination by either purchasing anannuity from an insurance com-pany or, if the plan permits, bypaying the benefit owed in anotherform to each participant or benefi-ciary. An employer can apply for adistress termination if it can provethat the controlled group is finan-cially unable to support the plan.The Pension Benefit GuarantyCorporation (PBGC) is a federalagency created by the EmployeeRetirement Income Security Act of1974 (ERISA) to protect pensionbenefits in private-sector traditionalpension plans. While the PBGC’sinsurance program pays the benefitprovided by terminated pensionplans, a growing worry is that asthe number of underfunded pen-sions increases, the PBGC will itselfnot be able to pay out the promisedamounts to beneficiaries.57Implications of the2010 congressionalmidterm electionsAlong with changes in congres-sional and committee control andmembership and more than 60new members in the House ofRepresentatives alone, the 2010congressional midterm elec-tions will most likely influencegovernment funds at the locallevel and other areas of govern-ment spending. In addition, thechange in the balance of power islikely to impact workplace issues.A November 3, 2010, HR Newsarticle reported that “with thelargest turnover of congressio-nal seats since 1948, the changedpolitical landscape on CapitolHill will have a profound impacton workplace-related issues andlegislative proposals. Many of theemployment-based proposals cham-pioned by Democratic leaders andorganized labor now have virtuallyno chance to advance in Congresswith Republicans seizing controlof the House of Representativesand gaining at least six seats in theSenate in the November 2010 mid-term elections. Proposed workplacelegislation such as the EmployeeFree Choice Act (H.R. 1409,S. 560), the Employment Non-Discrimination Act (H.R. 2981)and the Paycheck Fairness Act(S. 3772) now have little chanceof gaining approval in Congress,according to sources familiar withthe issues.”58Proposed immigration lawsin relation to H-1B visas andhigh-skilled foreign workersCountries around the world havelaws in relation to the numberof immigrants they will accept.Increasingly, national governmentsare tailoring these laws so that theyfavor highly skilled immigrants.The reasoning is that in thosenations where demographic andeducation trends make skills short-ages likely in the future, this workershortfall will need to be dealt with
46. SHRM WORKPLACE FORECAST 45by encouraging educated andskilled foreign workers to come totheir countries to work. Employersin industries such as high-tech,engineering and science are mostinterested in increasing the numberof skilled foreign workers who canenter the country.The OECD has noted that intra-regional migration of highly skilledpostdoctoral students, research-ers and company transferees inEurope, the Americas and Asiaoften is temporary in nature, “sug-gesting more a pattern of ‘braincirculation’ than one of ‘braindrain’.”59Increasingly, coun-tries will be competing with oneanother to attract these in-demandworkers. This could affect immi-gration laws around the world. Inthe United States, this would mostlikely influence the H-1B nonimmi-grant visa for specialty occupationsthat deal with a body of highlyspecialized knowledge and requireadvanced degrees. There also havebeen calls to ease restrictions thatdiscourage foreign nationals whocome to the United States to studyfor advanced degrees from stayingand becoming U.S. citizens.Increase in globalenvironmental legislationIn the coming years, companiesdoing business around the worldmay need to devote more resourcesto complying with either interna-tional or national environmentallegislation. Views on environmentalresponsibility and the government’srole in protecting the environmentvary around the world, but busi-nesses seeking to comply with lawsin one part of the world are likelyto consider how environmentallysustainable their business operationsare in other regions as well. Becausedamage to the environment tran-scends national borders, interna-tional legal systems may becomemore active in this sphere. But evenif international cooperation remainslimited, some influential nations’regulatory policies are likely to havea global reach. A good example isChina. Not only will China’s inter-est in upgrading its environmentalstandards lead to legal and techni-cal transformation within its ownborders, it will create the founda-tion for common approaches toemissions trading, green labelingand other ways of measuring envi-ronmental impact. And becausemany new green products, servicesand process improvements are leg-islatively led—meaning that thelegislative environment can encour-age their growth—countries whereprotecting the environment hastaken on the most urgency by law-makers could be the first to estab-lish market dominance in greenindustries and technologies. Here,too, China is predicted to take thelead.60Unions increasing theirallocation of resourcesdevoted to political lobbyingAccording to the AFL-CIO, therewere 15.3 million union mem-bers in the United States in 2009.Though the number of unionmembers has declined over the pastdecade, union organizing activity ison the rise in some of the fastest-growing industries such as healthcare and services. This may be whythe Service Employees InternationalUnion (SEIU) is the fastest-grow-ing union in North America; itsmembers work in health care, publicand other services. HR profession-als identified an increase in unionresources devoted to political lob-bying as a key trend. Other trendsthat could influence unionizationare potential increases in non-tradi-tional members such as women andyounger workers or workers in non-traditional unionized industries orsectors. The growth of unions inother countries, especially emergingeconomies such as India and China,could influence labor costs in theseand other nations.Nations whereprotecting theenvironmenthas taken onthe most urgencyby lawmakerscould be thefirst to establishmarketdominancein greenindustries andtechnologies.
47. How HR professionals are responding to political and legislative trendsTable 18 Top actions organizations are taking in response to public policy and legal trendsYes, currentlydoingNo Plan toChanging company policy in response to federal regulations 58% 11% 31%Changing company policy in response to state regulations 53% 20% 27%Increasing transparency of corporate data and information 39% 46% 15%Increasing involvement/lobbying in state politics 38% 55% 7%Increasing awareness of the fiduciary status of HR professionals 36% 49% 15%Increasing involvement/lobbying in federal politics 35% 58% 7%Changing corporate governance in response to new legislation 34% 44% 22%Increasing involvement in local, state and national workforce readiness anddevelopment initiatives 28% 50% 22%Source: SHRM Workplace Forecast (SHRM, 2011)Ina time of both economicand political change, HRprofessionals are concentrating onmaking sure their organizations arecomplying with the law, whetherit comes from the federal, state,regional or global level. They alsoare responding to a changing regu-latory environment as well as grass-roots corporate social responsibility(CSR) and sustainability effortsby increasing the transparency ofcorporate data and information.Though only a minority of HRprofessionals say their organizationsare involved in political lobbyingefforts, those that do get involved inlobbying tend to do so at the staterather than federal level.Other ideas to consider• HR professionals working in the United States will need to pay carefulattention to new regulations coming out of the various U.S. federalagencies. A number of changes to federal regulations from theNational Labor Relations Board (NLRB) and the Equal EmploymentOpportunity Commission (EEOC) will be proposed in 2011.• Federal agency audit activity is on the rise in a number of areas—fromthe Department of Homeland Security on employment verificationissues, to IRS classification of individuals as independent contractors,to wage-and-hour audits through the Department of Labor.• HR professionals working globally also must be aware of changes inregional and national law or regulations in the countries where they dobusiness.• Take advantage of local SHRM chapter events or attend conferencesthat explain the HR impact of changing regulations, regularly visit keygovernment websites for updates on regulatory issues and use SHRMpublic policy resources to stay abreast of all public policy developmentsthat will impact HR.• A long-term view of health care reform looks at it not just as acompliance issue but as part of the organization’s overall compensationstrategy.• It is imperative that front-line managers and supervisors are aware oftheir obligations under the National Labor Relations Act, especially asunion activity tends to increase after downturns.46 SHRM WORKPLACE FORECAST
48. SHRM WORKPLACE FORECAST 47HR professionals must prioritizethose factors and trends that aremost likely to have the biggestimpact on their unique situationand particular organization. Thismay vary from industry to indus-try and company to company. Butthere are common threads thatconnect HR professionals regard-less of what industries they work in.Following up on a 2008 researchstudy from the World Federationof Personnel ManagementAssociations (WFPMA) and BostonConsulting Group (BCG) thatexamined the priorities HR profes-sionals are most focused on as theyprepare for the future, the sameissues were re-examined in 2010.61Table 19 shows that many of thesame priorities still hold.As HR professionals look to thefuture, they will be focusing oncreating the most effective talentmanagement strategies, includingimproving leadership developmentso that their pipeline of leadershipcontinues even as the current gen-eration of leaders begins to retire.They will be challenged to improveemployee engagement and buildbetter workforce planning modelsdespite a global economy that hasyet to fully stabilize. HR profession-als will meet these challenges bystaying informed, continuing theirown learning and education andinteracting with other HR practi-tioners to encourage, support andlearn from one another.ConclusionTable 19 Key priorities for HR leaders around the world: A comparison of 2008 and 2010 findingsKey priorities for HR professionals in 2008 Key priorities for HR professionals in 20101. Improving leadership development2. Managing talent3. Delivering on recruiting and staffing4. Managing change and cultural transformation5. Managing demographics (aging workforce)6. Enhancing employee commitment7. Transforming HR into a strategic partner8. Managing work/life balance9. Improving performance management and rewards10. Managing diversity1. Managing talent2. Improving leadership development3. Strategic workforce planning4. Enhancing employee engagement5. Transforming HR into a strategic partner6. Measuring workforce performance7. Managing change and cultural transformation8. Becoming a learning organization9. Improving employer branding10. Improving performance management and rewardsNote: Data sorted in descending order.Sources: World Federation of Personnel Management Associations the Boston Consulting Group. (2008, April). Creating people advantage:How to address HR challenges worldwide through 2015; World Federation of Personnel Management Associations the Boston ConsultingGroup. (2010, September). Creating people advantage 2010: How companies can adapt their HR practices for volatile times.
49. 48 SHRM WORKPLACE FORECASTAppendix 1: TrendsTrends MajorstrategicimpactMinoroperationalimpactNoimpactContinuing high cost of employee health care coverage in the United States 85% 15% 0%Passage of federal health care legislation 82% 18% 0%Increased global competition for jobs, markets and talent 72% 22% 6%Growing complexity of legal compliance for employers 72% 27% 1%Changes in employee rights due to legislation and/or court rulings 67% 31% 3%Large numbers of Baby Boomers (1945-1964) leaving the workforce aroundthe same time 64% 29% 7%Economic growth of emerging markets such as India, China and Brazil 63% 24% 13%Greater need for cross-cultural understanding/savvy in business settings 61% 32% 7%Growing national budget deficit 61% 35% 4%Greater economic uncertainty and market volatility 61% 36% 3%Increased expansion of U.S. companies into the global marketplace 59% 34% 7%Changes in financial regulation 59% 38% 3%Growing importance of managing talent globally 58% 29% 13%A global shortage of skilled workers 57% 31% 12%Increased corporate downsizing and bankruptcies 56% 36% 8%Business impact of a decline in the value of the U.S. dollar 54% 42% 4%Increased cost of living for U.S. employees 54% 41% 5%Threat of a dip back into recession in the United States or globally 54% 43% 3%Decline in employees’ retirement savings 53% 43% 4%Lack of science and engineering graduates and workers in the United Statescompared with many other countries 53% 34% 13%Rising retiree benefits costs 53% 37% 10%Downturn in consumer spending 52% 41% 7%Growth in the generational income divide (impact of higher education and livingcosts and slower wage growth on the ability of younger generations to save andinvest) 50% 41% 9%Increase in chronic health conditions such as diabetes, heart conditions, etc.,among employees 50% 43% 7%The impact of underfunded pensions on retirees and the stability of the federalPension Benefit Guaranty Corporation 50% 38% 12%Overall decline in the workforce readiness of new entrants to the labor market 49% 40% 11%Increased global labor mobility 48% 44% 8%Shift from a manufacturing to an information/service or knowledge economy 48% 37% 15%Rapid growth of employee and business use of electronic social networkingsites (e.g., Facebook, LinkedIn, etc.) 48% 44% 8%Use of technology to eliminate geographic barriers in the workplace 48% 43% 9%CONTINUED ON NEXT PAGE
50. SHRM WORKPLACE FORECAST 49Trends MajorstrategicimpactMinoroperationalimpactNo impactIncreased vulnerability of business technology to attack or disaster 47% 45% 8%Growth in the number of employees with caring responsibilities (elder care, childcare, both elder care and child care at the same time) 47% 48% 5%Increased multiculturalism within organizations 45% 48% 7%Increased use of virtual global teams 45% 40% 15%Increased demand for greater transparency of corporate data and information 45% 47% 8%Potential rise in fuel/gasoline prices in the United States and globally 44% 50% 6%Employee backlash against rising benefits costs 44% 51% 5%Growth of the world’s middle-class consumers 43% 49% 8%Increased use of outsourcing of jobs within the United States 43% 45% 12%Rising higher education costs (impact on graduation rates, debt and availabilityof educated workers) 43% 43% 14%Increased employee demand for workplace flexibility 43% 50% 7%Need for increased security abroad for expatriates 42% 39% 19%Implications of the outcome of the 2010 Congressional elections 42% 49% 9%Proposed immigration laws in relation to H-1B visas and high-skilled foreignworkers 42% 46% 12%Increased mergers and acquisitions (MA) activity 42% 48% 10%Increasing divide between technology-savvy employees and those unfamiliarwith the latest technologies 42% 48% 10%Increasing employee concerns about job security 41% 51% 8%Increase in business research and development investment in emergingeconomies such as India and China 41% 39% 20%An increased proportion of older workers in the workforce 40% 48% 12%Stricter cross-border policies for global business practices 39% 45% 16%Increased concerns about safety and security in the workplace 38% 55% 7%Greater use of contingent workers 38% 48% 14%Increased use of Internet recruiting (i.e., e-recruiting) 38% 51% 11%Growth in the number of employees for whom English is a second language 38% 51% 11%Increased use of offshoring 37% 45% 18%Rise in underemployment (job seekers can only find part-time jobs or are in jobsfor which they are overqualified) 37% 53% 10%Growth in the income divide between high- and low-paid workers 36% 54% 10%Rise in the number of employees with untreated physical and mental healthconditions in the workplace 36% 51% 13%Growth in unions in nontraditional sectors and industries 35% 44% 21%Continued development and use of e-learning applications and tools 35% 53% 12%Increase in global environmental legislation 34% 54% 12%Unions increasing their allocation of resources devoted to political lobbying 34% 48% 18%Changes in negotiating strategies, tactics and processes used by organized labor 34% 47% 19%Increased interdependence of countries and cultures 34% 50% 16%Increased intellectual property theft 34% 49% 17%Business and consumer adoption of “green” technologies (i.e., sustainabletechnologies that do minimal damage to the environment) 33% 52% 15%Loss of employee privacy as a result of technology (information about people’spresent and past more easily obtained) 32% 55% 13%Higher rates of immigration and an increase in the number of foreign-bornworkers 32% 53% 15%CONTINUED ON NEXT PAGE
51. 50 SHRM WORKPLACE FORECASTTrends MajorstrategicimpactMinoroperationalimpactNo impactRapid turnover and skills shortages in key offshoring destinations such as Indiaand China 31% 47% 22%Increase in the legal retirement age in countries around the world with agingpopulations 31% 48% 21%Proposed immigration laws that prosecute employers for hiring illegal/undocumented workers 31% 48% 21%Increased economic, social and political power of women around the world 30% 59% 11%Decrease in unemployment 30% 62% 8%Employee wage stagnation 30% 61% 9%Upturn in consumer spending 30% 60% 10%Decrease in training budgets 29% 58% 13%Increase in discrimination litigation based on national origin 28% 60% 12%Increase in training due to wide availability of low-cost technology-basedtraining 28% 60% 12%Decline in the number of employees without health insurance 28% 55% 17%Growth in the recognition and response to generational differences amongemployees 28% 62% 10%Increase in employee identity theft 28% 58% 14%Increased worker productivity 27% 60% 13%Increase in litigation involving overtime pay for exempt/white-collar workers 26% 54% 20%Employee wage growth 26% 68% 6%Greater involvement of corporate boards in setting company policy 26% 53% 21%Rise of small businesses as generators of job growth 26% 55% 19%Growing adoption of standards for data exchange between human resourceinformation systems (HRIS) 25% 57% 18%Rising threat of global health pandemics 25% 61% 14%Increased demand by company stakeholders/shareholders for input intocorporate decision making 25% 57% 18%Public backlash against globalization and power of multinational corporations 24% 52% 24%Increase in age discrimination litigation 24% 59% 17%Increase in discrimination litigation based on sexual orientation 24% 60% 16%Increase in the number of employees with mental health conditions such asdepression 24% 59% 17%Increased corporate leadership role in dealing with global problems such aspoverty and disease 23% 53% 24%Increase in discrimination litigation involving individuals with disabilities 23% 63% 14%Growing employee demand for sustainable and green business practices 23% 56% 21%Increase in religious discrimination litigation 19% 60% 21%Reduction in employee mobility due to the housing/mortgage crisis 19% 64% 17%Increase in race discrimination litigation 18% 64% 18%Increase in the number of individuals with disabilities in the workforce 16% 62% 22%Increased labor force participation rates of women 16% 64% 20%Growth in the availability of HR management software aimed at and used bysmall businesses without HR staff 15% 60% 25%Increase in sex discrimination litigation 14% 64% 22%Decline in the number of foreign students who stay and work in the UnitedStates 13% 57% 30%Growth in religious diversity in the workplace 11% 59% 30%Note: Sorted in descending order by “Major strategic impact” column.Source: SHRM Workplace Forecast (SHRM, 2011)
52. SHRM WORKPLACE FORECAST 51Appendix 2: ActionsAction Yes, currentlydoingNo Plan toLinking employee performance and its impact on the organization’s businessgoals 68% 11% 21%Increasing expectations of employee productivity 67% 15% 18%Taking steps to protect employees in the event of a major health epidemic 62% 27% 11%Implementing policies and procedures aimed at protecting employee andcustomer data from identity theft 60% 22% 18%Updating technology use policies for employees (use of social networking sites,e-mail for non-business use, etc.) 58% 16% 26%Changing company policy in response to federal regulations 58% 11% 31%Investing in technology and services designed to protect company data in theevent of disaster or cyber attack 57% 18% 25%Increasing the use of technology to perform transactional HR functions such aspaperless pay 56% 24% 20%Implementing wellness programs 54% 20% 26%Increasing HR’s role in promoting corporate ethics 54% 28% 18%Non-disclosure/non-compete agreements for intellectual property 53% 41% 6%Changing company policy in response to state regulations 53% 20% 27%Investing more in training and development to boost skills levels of employees 53% 25% 22%Expanding the use of e-learning 52% 23% 25%Expanding the use of technology-based employee and manager self-serviceapplications 51% 22% 27%Putting more emphasis on succession planning and people readiness 51% 18% 31%Increasing investment in employee safety and security 51% 31% 18%Developing broader business acumen among HR staff 49% 30% 21%Moving to an Internet-based system for the delivery and utilization of HRapplications 48% 29% 23%Using social networking sites for recruiting, employer branding and otherpurposes 47% 34% 19%Increasing HR’s role in promoting corporate social responsibility andsustainability 47% 30% 23%Increasing investment in Internet recruiting (i.e., e-recruiting) 46% 34% 20%Changing employment practices to avoid charges of discrimination 46% 44% 10%Implementing policies aimed at increasing workplace flexibility 46% 30% 24%Investing more in leadership development 45% 27% 28%Increasing expectations of employee availability to deal with work issues, evenin non-working hours such as nights or weekends 45% 46% 9%Increasing the use of collaborative technologies that allow employees to workfrom anywhere 44% 37% 19%Increasing use of noncash rewards such as time off, time flexibility, learningopportunities 44% 33% 23%Changing work processes to make them more environmentally friendly 43% 37% 20%CONTINUED ON NEXT PAGE
53. 52 SHRM WORKPLACE FORECASTAction Yes, currentlydoingNo Plan toIncreasing investment in training for HR staff 43% 38% 19%Hiring workers (or increasing size of workforce) 42% 37% 21%Reorganizing the HR function to meet changing organizational strategic needs 42% 41% 17%Implementing employee diversity education programs 41% 38% 21%Increasing the use of workforce planning and decision tools 40% 34% 26%Putting greater emphasis on developing retention strategies for the current andfuture workforce 40% 30% 30%Increasing transparency of corporate data and information 39% 46% 15%Building people management or human capital components into key businesstransactions (change management, mergers acquisitions) 39% 41% 20%Increasing involvement/lobbying in state politics 38% 55% 7%Training line managers to recognize and respond to generational differences 38% 41% 21%Using metrics to demonstrate HR’s return on investment 36% 43% 21%Increasing awareness of the fiduciary status of HR professionals 36% 49% 15%Increasing involvement/lobbying in federal politics 35% 58% 7%Changing corporate governance in response to new legislation 34% 44% 22%Increasing employee health care co-pays 33% 40% 27%Integrating HR practices across operations, including international borders 32% 57% 11%Expanding to sell products and services into the global marketplace 31% 58% 11%Retraining employees for new jobs 31% 54% 15%Putting more emphasis on certification for HR professionals 29% 62% 9%Increasing involvement in local, state and national workforce readiness anddevelopment initiatives 28% 50% 22%Expanding business operations into the global marketplace 27% 62% 11%Moving strategic HR functions to business units 27% 66% 7%Offering employment options designed to attract and retain younger workers 27% 59% 14%Decreasing the use of contingent workers 26% 68% 6%Increasing the use of specialized HR practitioners 26% 63% 11%Giving more consideration to regional political issues when making decisions toinvest abroad 23% 68% 9%Raising wages 23% 37% 40%Increasing the use of alternative dispute resolution 22% 71% 7%Increasing the use of contingent workers 22% 66% 12%Carrying out studies to determine projected future retirement rates in theorganization 22% 61% 17%Laying off workers (or shrinking size of workforce) 20% 68% 12%Offering more customized benefits packages to employees 20% 64% 16%Shifting to a more global organizational model 19% 72% 9%Increasing employee electronic surveillance 16% 75% 9%Decreasing retirement benefits plans 16% 76% 8%Offering employment options designed to attract and retain older workers 16% 73% 11%Decreasing other employee benefits as a result of increased health care benefitcosts 15% 65% 20%Making changes to the executive compensation determination process 15% 71% 14%Increasing the use of HR outsourcing 14% 74% 12%Cutting back on HR staff 12% 81% 7%CONTINUED ON NEXT PAGE
54. SHRM WORKPLACE FORECAST 53Action Yes, currentlydoingNo Plan toMoving business to different domestic geographic location 10% 84% 6%Moving business to a non-U.S. location 8% 88% 4%Decreasing wages 8% 88% 4%Offshoring jobs to countries with lower health care and other labor costs 7% 87% 6%Seeking new offshoring destinations 6% 89% 5%Note: Sorted in descending order by “Yes, currently doing” column.Source: SHRM Workplace Forecast (SHRM, 2011)
55. 54 SHRM WORKPLACE FORECASTIn conjunction with this report,SHRM conducted a survey onworkplace trends in May 2010. Thesurvey explored the issues and trendsthat HR professionals expected tohave the most impact in shapingthe field of HR management in thenext few years and the solutions theywere using to prepare to respond tothese trends. The survey instrumentwas based on the instrument usedin the 2006 Workplace Forecast, thenupdated based on current workplaceissues and trends. A sample of 9,000HR professionals was randomlyselected from SHRM’s membershipdatabase, which consisted of morethan 250,000 members at the timethe survey was conducted. Onlymembers who had not participatedin a SHRM survey or poll in the sixmonths preceding the survey wereincluded in the sampling frame.Members who were students, con-sultants, academics, located inter-nationally or had no e-mail addresson file also were excluded from thesampling frame. Each member ofthe survey sample was sent an e-mailthat included a link to the SHRMWorkplace Forecast survey. Of these,8,186 were successfully delivered torespondents, and 1,247 HR profes-sionals responded, yielding an overallresponse rate of 15%. Because of thelength of the survey, the respondentpool was randomly split into threegroups, with each group answeringone-third of the survey questions.Therefore, each individual item in thesurvey was seen by between 393 and435 HR professionals. The surveywas accessible for a period of fourweeks, and three e-mail reminderswere sent to nonrespondents in aneffort to increase the response rate.About environmental scanningEnvironmental scanning is a toolused by futurists, business trendsanalysts and corporate issues manag-ers to identify emerging issues andtrends. It involves collecting datafrom a wide array of sources in orderto obtain the broadest scope of infor-mation from which to base decisions.Though the collection of data canbe systematic and the structures putin place for data gathering can bequite detailed, environmental scan-ning always is considered a subjec-tive exercise since it involves makingdecisions about which kinds of infor-mation are most relevant. For thisreason, many organizations that useenvironmental scanning, includingSHRM, rely on teams of individualsto collect data, so that informationis viewed from a number of differ-ent perspectives. SHRM also solicitsviews about future trends from itsmembership, 12 Special ExpertisePanels and opinion leaders.Methodology
56. SHRM WORKPLACE FORECAST 551U.S. Bureau of Labor Statistics. (2009,December). 2008-2018 job outlook.Retrieved from www.bls.gov/oco/oco2003.htm.2Society for Human ResourceManagement. (2010, March). Post-recession hiring SHRM poll. Retrievedfrom www.shrm.org/Research/SurveyFindings/Articles/Pages/PostRecessionHiring.aspx.3Society for Human ResourceManagement. (2010). SHRM LeadingIndicators of National Employment(LINE) [historical data]. Available atwww.shrm.org/line.4Centers for Disease Control andPrevention. (2007). National estimateson diabetes. Retrieved on November 29,2010, from www.cdc.gov/diabetes/pubs/references07.htm .5Centers for Disease Control andPrevention (2008). Heart disease facts.Retrieved on November 29, 2010, fromwww.cdc.gov/heartdisease/facts.htm.6Centers for Disease Control andPrevention. (2010, August 3). Vitalsigns: State-specific obesity prevalenceamong adults. Retrieved on November23, 2010, from www.cdc.gov/mmwr/preview/mmwrhtml/mm59e0803a1.htm.7National Alliance for Caregiving incollaboration with the AARP. (2009November). Executive summary:Caregiving in the U.S. Retrieved onNovember 23, 2010, from http://assets.aarp.org/rgcenter/il/caregiving_09_es.pdf.8Society for Human ResourceManagement. (2010). 2010 employeebenefits: A survey report by SHRM.Retrieved on November 19, 2010,from www.shrm.org/Research/SurveyFindings/Articles/Pages/2010EmployeeBenefits.aspx.9U.S. Bureau of Labor Statistics. (2009,December). 2008-2018 job outlook.Retrieved on November 19, 2010, fromwww.bls.gov/oco/oco2003.htm.10Society for Human ResourceManagement. (2009, October 19). TheH1N1 flu virus – how prepared is yourworkplace? SHRM poll. Retrieved onNovember 19, 2010, from www.shrm.org/Research/SurveyFindings/Articles/Pages/TheH1N1VirusHowprepared.aspx.11U.S. Census Bureau. (2010, April).Language use in the United States: 2007American community survey reports.Retrieved on November 19, 2010, fromwww.census.gov/prod/2010pubs/acs-12.pdf.Endnotes
57. 56 SHRM WORKPLACE FORECAST12Society for Human ResourceManagement. (2010). SHRM healthcare benchmarking study executive sum-mary. Retrieved on November 22,2010, from www.shrm.org/Research/SurveyFindings/Documents/10-0625_Health%20Care_FINAL.pdf.13The World Bank. (2010, June).Global economic prospects. Retrieved onNovember 22, 2010, from http://siteresources.worldbank.org/INTGEP2010/Resources/FullReport-GEPSummer2010.pdf.14Mishel, L. (2010, July 17). Corporateprofits have recovered, but job market stilldepressed. Economic Policy Institute.Retrieved on November 30, 2010, fromwww.epi.org/economic_snapshots/entry/corporate_profits_have_recovered_but_job_market_still_depressed/.15Society for Human ResourceManagement. (2010, October).SHRM labor market outlook surveyreport Q4 2010 (October – December).Retrieved on November 22, 2010,from www.shrm.org/Research/MonthlyEmploymentIndices/lmo/Documents/LMO%20Q4%202010.pdf.16Lino, M. (2010). Expenditures on chil-dren by families, 2009. U.S. Departmentof Agriculture, Center for NutritionPolicy and Promotion. MiscellaneousPublication No. 1528-2009. Retrievedon November 22, 2010, from www.cnpp.usda.gov/Publications/CRC/crc2009.pdf.17Society for Human Resource Man-agement. (2009, July). The U.S.recession and its impact on employee re-tirement SHRM poll. Retrieved on No-vember 23,2010, from www.shrm.org/Research/SurveyFindings/Articles/Pages/RecessionImpactonRetirement.aspx.18Employee Benefit Research Institute.(July 2010). Retirement readinessrating. Retrieved on November 23,2010, from www.ebri.org/publications/ib/index.cfm?fa=ibDispcontent_id=4593.19U.S. Bureau of Economic Analysis.(2010, October). BEA news release.Retrieved on November 29, 2010, fromwww.bea.gov/newsreleases/national/pi/pinewsrelease.htm.20U.S. Census Bureau. (2010, October).Retrieved on November 29, 2010, fromwww.census.gov/retail/marts/www/marts_current.pdf.21Society for Human ResourceManagement. (2010). SHRM 2010human capital benchmarking database[unpublished data]. For more informa-tion go to www.shrm.org/benchmarks.22Society for Human ResourceManagement. (2010). SHRM LeadingIndicators of National Employment(LINE) [historical data]. Available atwww.shrm.org/line.23Sok, E. (2010, March). Record unem-ployment among older workers does notkeep them out of the job market. U.S.Bureau of Labor Statistics. Issues inLabor Statistics, Summary 10-04.Retrieved on November 23, 2010, fromwww.bls.gov/opub/ils/summary_10_04/older_workers.htm.24Organization for EconomicCooperation and Development. (2010,December). Off to a good start? Jobsfor youth. Retrieved on December 16,2010, from www.oecd.org/document/31/0,3746,en_2649_37457_46328479_1_1_1_37457,00.html.25American Society for Training andDevelopment, the Conference Board,Corporate Voices for Working Families,and the Society for Human ResourceManagement. (2009). The ill-preparedU.S. workforce: Exploring the challengesof employer-provided workforce readinesstraining. Retrieved on November 23,2010, from www.shrm.org/Research/SurveyFindings/Articles/Documents/BED-09Workforce_RR.pdf.26Organization for Economic Cooper-ation and Development. (2010). Thehigh cost of low educational perfor-mance: The long-run economic impact ofimproving PISA outcomes. Programmefor International Student Assessment.Retrieved on November 23, 2010, fromwww.oecd.org/dataoecd/11/28/44417824.pdf.27National Science Foundation. (2010).Science and engineering indicators 2010.Retrieved on November 23, 2010, fromwww.nsf.gov/statistics/seind10/pdf/seind10.pdf.
58. SHRM WORKPLACE FORECAST 5728Galama, T., Hosek, J. (2008, June).U.S. competitiveness in science and tech-nology. Rand Corporation. Retrieved onNovember 23, 2010, from www.rand.org/pubs/monographs/2008/RAND_MG674.pdf.29Society for Human ResourceManagement. (2009, November).Interviewing do’s and don’ts for job seek-ers SHRM poll. Retrieved onNovember 23, 2010, from www.shrm.org/Research/SurveyFindings/Articles/Pages/InterviewingDosandDonts.aspx.30Society for Human ResourceManagement. (2010, July). The effect ofhigh-tech solutions and social networkingon the recruiting process. Retrieved onNovember 29, 2010, from www.shrm.org/Research/FutureWorkplaceTrends/Documents/Spotlight%20Q2%202010.pdf.31Symantec Corporation. (2010, June).2010 global smb information protec-tion survey. Retrieved on November 23,2010, from www.symantec.com/content/en/us/about/media/pdfs/SMB_ProtectionSurvey_2010.pdf?om_ext_cid=biz_socmed_twitter_2010Jun_worldwide_SMB.32Contu, R., Cheung, M. (2010,August). Forecast analysis: Security soft-ware markets, worldwide, 2009-2014,2Q10 update. Gartner Incorporated.33McAfee Labs. (2010, August).Q2 2010 threats report. Retrievedon November 23, 2010, from www.mcafee.com/us/local_content/reports/q22010_threats_report_en.pdf.34U.S. Bureau of Economic Analysis.(2010, November). Gross domesticproduct: third quarter 2010 (second esti-mate) [press release].Retrieved onNovember 29, 2010, from www.bea.gov/newsreleases/national/gdp/2010/pdf/gdp3q10_2nd.pdf.35Society for Human ResourceManagement. (2009, December).Transitioning to a virtual organi-zation SHRM poll. Retrieved onNovember 23, 2010, from www.shrm.org/Research/SurveyFindings/Articles/Pages/TransitioningtoVirtualOrganization.aspx.36Novo Nordisk press release. Retrievedfrom Novo Nordisk website onNovember 23, 2010, from www.novonordisk.com/press/news/news.asp?sShowNewsItemGUID=edec8662-db33-43ee-b660-7b7c95e59e94sShowLanguageCode=en-GB.37Society for Human ResourceManagement. (2011). Advancing sus-tainability: The role of HR. Alexandria,VA: SHRM.38Arndt, M., Einhorn, B. (2010,April 25). The 50 most innovative com-panies. BusinessWeek.39Goldman Sachs. (2009, December4) The long-term outlook for the BRICsand N-11 post crisis. Global EconomicsPaper No: 192. Retrieved on November29, 2010, from www2.goldmansachs.com/ideas/brics/brics-at-8/BRICS-do.pdf.40Society for Human ResourceManagement. (2010). Global talentfor competitive advantage. ResearchQuarterly, 3. Retrieved on December17, 2010, from www.shrm.org/Research/Articles/Articles/Documents/10-0489%20Research_Quarterly_Q3_FNL.pdf.41Shipwire.(2010, May 3). Shipwirereport reveals uptick in small businessoverseas growth [new release]. Retrievedon November 29, 2010, from www.shipwire.com/help/shipwire-report-reveals-uptick-in-small-business-over-seas-growth/.42Economist Intelligence Unit. (2010,September). Global firms in 2020: Thenext decade of change for organisationsand workers. Retrieved on November 29,2010, from www.shrm.org/Research/SurveyFindings/Articles/Documents/Economist%20Research%20-%20Global%20Firms%20in%202020.pdf.43Deloitte. (2010, April). Has the greatrecession changed the talent game?Retrieved on November 29, 2010, fromwww.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/IMOs/Talent/us_TalentPulseWrap_041510.pdf.44Organization for EconomicCooperation and Development. (2008).The global competition for talent:Mobility of the highly skilled. Retrievedon November 29, 2010, from www.oecd.org/dataoecd/55/3/41362303.pdf.
59. 58 SHRM WORKPLACE FORECAST45Economist Intelligence Unit and theSociety for Human ResourceManagement. (2009). Global diversityand inclusion: Perceptions, practices andattitudes. Retrieved on November 30,2010, from www.shrm.org/Research/SurveyFindings/Articles/Documents/Diversity_and_Inclusion_Report.pdf.46Society for Human ResourceManagement. (2010, October).Workplace diversity practices: How hasdiversity and inclusion changed overtime? Retrieved on November 30,2010, from www.shrm.org/Research/SurveyFindings/Articles/Pages/WorkplaceDiversityPractices.aspx.47Society for Human ResourceManagement. (2010, June). SHRMpoll: Financial challenges to the U.S. andglobal economy and their impact on orga-nizations. Retrieved on November 30,2010, from www.shrm.org/Research/SurveyFindings/Articles/Pages/Financialchallengespoll.aspx.48Society for Human ResourceManagement. (2010). Successfullytransitioning to a virtual organization.Research Quarterly, 1. Retrieved onDecember 17, 2010, from www.shrm.org/Research/Articles/Documents/10-0024_RQ_1_2010%20FINALInteractive.pdf.49Society for Human ResourceManagement. (2010). What seniorHR leaders need to know: Perspectivesfrom the United States, Canada, India,the Middle East and North Africa.Retrieved on November 30, 2010,from www.shrm.org/Research/SurveyFindings/Articles/Pages/WhatSrHRLeadersNeedtoKnow.aspx.50Court, D., Narasimhan, L.(2010, July). Capturing the world’semerging middle class. The McKinseyQuarterly. Retrieved on November 30,2010, from www.mckinseyquarterly.com/Capturing_the_worlds_emerging_middle_class_2639.51Society for Human ResourceManagement. (2010, September).SHRM poll: Organizations’ response tohealth care reform—senior management’srequests. Retrieved on December 1,2010, from www.shrm.org/Research/SurveyFindings/Articles/Pages/SeniorManagementsRequests.aspx.52Society for Human ResourceManagement. (2010, September 17).SHRM poll: Organizations’ responseto health care reform—challenges andactions. Retrieved on December 1,2010, from www.shrm.org/Research/SurveyFindings/Articles/Pages/ResponsetoHealthCareReform.aspx.53Society for Human ResourceManagement. (2010, June 27). SHRMpoll: Organizations’ responses to healthcare reform. Retrieved on December 1,2010, from www.shrm.org/Research/SurveyFindings/Articles/Pages/Organizations%E2%80%99ResponsetoHealthCareReform.aspx.54Data from U.S. Congressional BudgetOffice. For more information, go towww.cbo.gov/budget/budget.cfm.55National Commission on FiscalResponsibility and Reform. (2010,December 1). The moment of truth:Report of the National Commissionon Fiscal Responsibility and Reform.Retrieved on December 1, 2010, fromwww.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf.56Ku, D., Armstrong, R. (2010,November 29). Asia regulators sayG20 reform driven by U.S., Europe.Reuters. Retrieved on December 1,2010, from www.reuters.com/article/idUSTRE6AS1CB20101129.57For more information about thePBGC, go to www.pbgc.gov/index.html.58Leonard, B., Deschenaux, J. (2010,November 3). Midterm 2010 electionschange prospects for HR-related leg-islation. HR News. Retrieved onDecember 1, 2010, from www.shrm.org/Publications/HRNews/Pages/ElectionsChangeProspects.aspx.59Organization for EconomicCooperation and Development. (2002).International mobility of the highlyskilled. OECD Policy Brief. Retrievedon November 29, 2010, from www.oecd.org/dataoecd/9/20/1950028.pdf.60Oster, S. (2009 December 15).World’s top polluter emerges as green-technology leader. Wall Street Journal.Retrieved on December 1, 2010, fromonline.wsj.com/article/SB126082776435591089.html.
60. SHRM WORKPLACE FORECAST 5961World Federation of PersonnelManagement Associations (WFPMA) the Boston Consulting Group (BCG)(2008, April). Creating people advantage:How to address HR challenges worldwidethrough 2015; World Federation ofPersonnel Management Associations(WFPMA) the Boston ConsultingGroup (BCG) (September 2010).Creating people advantage 2010:How companies can adapt their HRpractices for volatile times.Additional ResourcesAmerican Association of RetiredPersons (AARP)www.aarp.orgBureau of National Affairs (BNA)www.bna.comBureau of Labor Statisticswww.bls.govCenter for Disease Controlwww.cdc.govEmployee Benefits Research Institutewww.ebri.orgGeneral Accounting Officewww.gao.govInternational Labor Organizationwww.ilo.orgOrganization for EconomicCooperation and Developmentwww.oecd.orgPension Benefit Guaranty Corporationwww.pbgc.govSHRM Leading Indicators of NationalEmployment®(LINE®).Monthly reports available atwww.shrm.org/lineSHRM Surveyswww.shrm.org/surveysUnited Nations Global Compactwww.globalcompact.org/United Nations Statistics Divisionhttp://unstats.un.org/unsd/default.htmU.S. Census Bureauwww.census.govU.S. Commerce Departmentwww.commerce.govU.S. Citizenship andImmigration Serviceswww.uscis.govU.S. Administration on Aging (AoA)www.aoa.gov