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Current Trends in HR - 6.ppt

  1. Current Trends in HR
  2. CURRENT TRENDS IN HR • EMPHASIS ON STRATEGIC PLANNING & SUCCESSION – VP of HR is a Strategic Manager, Management Succession Planning • EMPHASIS ON COST-RELATED ISSUES / COST CONTROL – Global Competition, Outsourcing and Downsizing • NEW SPECIALTIES EMERGING IN HR – HR Planning, International HR, Employee Assistance Programs • GROWTH OF GOVERNMENTAL REGULATIONS – Wages (1930s), Unionization (1940s), Employment (1960s) • PROFESSIONALIZATION OF HR MANAGEMENT – Professional HR Societies & HRCI (Certification Institute) • THE INTERNET REVOLUTION – Electronic Recruiting, Records Management, and HRIS
  3. Current Trends Rising cost of benefits, especially health care Competitive pressure on increasing employee wages Rising Compensation Costs
  4. Current Trends Developing Human Capital Managing talent Labor Shortages Higher Ethical Standards
  5. Current Trends A move toward single software platforms Use of technology to communicate with employees Evolution of new technologies Harnessing New Technology
  6. Current Trends Managing the Changing Workforce Increased diversity in the workforce Work-life balance Increased vulnerability of intellectual property Changing work patterns – 24/7 availability, etc.
  7. Rising Compensation Costs 1. Rising cost of benefits, especially health care Health care costs for most employers is expected to be around 7%, a moderate increase compared to previous years
  8. Employer Responses Aggressive health care initiatives, such as higher deductibles, co-pays, and employee contribution levels. • 88% of employees are required to pay some of the insurance premium out of their own pockets. • Changes or elimination of employee health care coverage • Some employers have been holding their health care costs to a 1% increase.
  9. Employer Responses Focus on changing employee behaviors  Wellness programs  Smoking cessation efforts  Education of employees on health care options and associated costs Successful employers are aggressively pushing consumer directed health plans (CDHPs) Combines a high deductible insurance policy with a tax advantaged health savings account  Firms are setting the premiums at 30% below traditional plans to encourage participation
  10. Employer Responses Saving money by providing free drugs and supplies for chronic diseases (e.g., asthma, diabetes) that are known to lead to costly complications. Goal is to get patients to stick to their treatment schedules; often tied to classes or coaching Upcoming survey from Hewitt Associates indicates nearly 20% of firms do this now, and 47% are considering doing so in the future Paying the full amount of common preventive services can also help reduce costs
  11. Employer Responses  Sending the sickest employees to the best doctors is gaining as a strategy  Dubbed by some as a 20-20 approach - employers and their health plans use data to identify physicians rated in the top 20% for effective treatments and match them with the 20% of employees who most need care.  Employers provide financial incentives, (e.g., lower copayments) as incentives to use the top providers.  Eventually, firms will try predictive modeling to identify the sickest 20% of employees so steps can be taken today to "get ahead of the curve”
  12. Employer Responses  Increasing financial penalties for employees that poorly manage their health Many companies continue to reward workers who take health risk assessments and participate in health management programs, while punishing those who do not Employers may deny a worker access to higher-benefit plans if worker declines participation in wellness programs
  13. Employer Responses  On-site medical clinics are growing in popularity  Large companies staff clinics with own employees while smaller firms contract out to nearby clinics Help provide primary care to workers at low or no cost On-site clinics lessen time employees spend away from work. On-site clinics expanding to include rehab services, dentistry, X-ray and lab work Forms inviting specialists to come on-site and offer their services. Clinics moving into more active management of workers' health conditions
  14. Employer Responses Putting health care into employee’s hands As health insurance costs continue to rise, employers are adopting a controversial new approach: ending group coverage and giving employees $50 to $200 or so a month to help buy their own health care
  15. Rising Compensation Costs 2. Competitive pressure on increasing employee wages Linking pay to organizational goals, employee productivity, and labor market norms Pay-for-Performance Programs Performance Management
  16. Success of Programs • Pay for Performance Works When: It is measurable and objective There are clear expectations There is commitment to training and support Flexibility for input
  17. Failure of Programs • Pay for Performance Falls Short When: It pits employees against each other It pushes one outcome to the detriment of the others It is so subjective it opens the organization and managers to allegations of bias
  18. Key Drivers of Success  Better communication of performance standards with all levels of the organization Clearly Specify Incentive Measures Organizational measures: • service quality • teamwork • income growth • cost savings Individual measures: • based on established performance goals within individual areas of responsibility
  19. Challenges in Implementing Performance-Based Pay • Pervading Attitude of Equality • Custom of Cost of Living Approach • Challenge of Performance Measurement • Discomfort with Judging Performance • Weaknesses in Data Collection • Inadequacy of Funding Resources
  20. Current Trends Developing Human Capital 1. Managing talent – recruitment, development, and retention of the best workers  Employers need to find innovative ways to “brand” themselves, setting them apart from competitors and becoming an “employer of choice”  As talent becomes scarce, development of current employees for promotional opportunities
  21. Developing Human Capital 2. Labor shortage – finding the right talent  Statistic: By 2020, gap between available and required skilled workers is projected to be 14 million  Use of e-recruiting and non-traditional labor pools  Establishing selection system geared to retention: better skills assessment, knowledge, and fit for jobs
  22. Developing Human Capital 3. Higher ethical standards  Greater focus on trust and integrity at all levels  Regulatory compliance issues (i.e., Sarbanes- Oxley Act)
  23. Current Trends • Harnessing New Technology 1. Use of technology to communicate with employees  Company intranets  E-Newsletters  Company emails
  24. Harnessing New Technology 2. A move toward single software platforms  Integrated HRIS  PeopleSoft  SAP  Oracle
  25. Harnessing New Technology  Specialized applications  Succession planning  Applicant tracking  Job evaluation  Employee performance evaluation  Grievance handling
  26. Harnessing New Technology  Perhaps most significant development is the use of organizational intranets An intranet is internal network that makes use of World Wide Web technology (browsers, servers, etc.) to gather and disseminate information within the firm Intranets may be linked to the external Internet, but are secured so that only authorized users can access information on internal components
  27. Harnessing New Technology 3. Evolution of new technologies • Employee Self-Service and Data Exchange Capability to maintain personal data View context-specific information Initiate benefits transactions  Internet-based tools are quickly becoming the preferred method for employees to execute benefits transactions
  28. Benefits of Automated Benefit Administration • Reducing and eliminating extensive manual efforts formerly needed to: Distribute, collect, and process forms Test programming required to export/import data Administer the periodic data exchanges Reconcile data Resolve employees’ problems resulting from the time lag between data collection and processing
  29. Current Trends Managing the Changing Workforce 1. Increased diversity in the workforce Creating workplace that respects and includes differences Recognizing unique contributions individuals with differences can make Creating work environment that maximizes potential of all employees
  30. Managing the Changing Workforce 2. Work-life balance  Employees experiencing burnout due to overwork and increased stress – in nearly all occupations  Rise in workplace violence, increase in levels of absenteeism as well as rising workers’ compensation claims  Causes range from personal ambition and the pressure of family obligations to the accelerating pace of technology
  31. Work-Life Balance  According to study by Center for Work-Life Policy, 1.7 million people consider their jobs and work hours excessive  50% of top corporate executives leaving current positions  64% of workers feel work pressures are “self-inflicted”, and taking a toll  In the US, 70%, and globally, 81%, say jobs are affecting their health.  Between 46% and 59% of workers feel stress is affecting their interpersonal and sexual relationships.  Males feel there is stigma associated with saying “I can’t do this”
  32. Managing the Changing Workforce 3. Structural shift from the manufacturing to the service sector  Growth in part-time employment  Rising prominence of women in the workforce  Gradual ageing of labor force with fewer young people entering workforce and participation rates among older workers increasing  Growing importance of temporary employment and self employment  Adoption of flexible working practices, such as job sharing and the increasing opportunity to work from home.
  33. Conclusions Exciting time for HR professionals More emphasis on cost containment and control Focus on employee responsibility and involvement at work Greater use of technology in communication with employees More flexible patterns of work