Key Workplace Trends


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  • McKinsey predicts that by 2010 India will face shortfall of 500,000 staff capable of working for multinationals. In India, cheapest way to build loyalty is to build ties with employee’s families such as encouraging parents to visit the workplace.
  • Currently Hawaii and California have more minorities than Caucasians and this trend will continue.
  • The increase in workers without children will lead to a change in the traditional benefits offerings.
  • We might also want to add as a short-term trend, the housing and mortgage crisis. This is having a major impact on our economy, and potentially could impact hiring and create more unemployment.
  • Women now account for more than half of college and graduate degrees.
  • The percent of married couples with children is about half what it was in 1970. We are seeing continued numbers of couples who either do not choose to have kids or wait a number of years to have children. This report is predicting that for children born in the 1990’s, more than half will live part of their childhood in a single parent family.
  • More and more Wellness programs – some see increase in paternalism with companies interested in improving your health (lose weight, stop smoking, etc. ) and using a cafeteria approach to health plans, other benefits. See more variable compensation plans that put some money at risk.
  • Why does this matter? With a smaller percentage of population having a bachelor’s degree, weakens economy Seeing a widening gap in college degrees between whites and other ethnic groups 26 out of 100 whites 21 out of 100 other ethnic groups
  • Bad news is adjusted for inflation, real wages are barely higher now than they were in 2000
  • According to the SHRM/Conference Board study on Are They Really Ready to Work?, asked about projecting change in skills in five years, predict 27% decrease in hires with high school degree, 49% increase hires with two-year degree and 59% increase in hires with college degree.
  • Over 400 top employers nationwide were asked about readiness of recent new entrants to the workplace, high school, community college and 4 year college grads.
  • Key Workplace Trends

    1. 1. Key Workplace Trends & Impact to Human Resources March 18, 2008
    2. 2. Sources <ul><li>From McKinsey Quarterly , online journal January 2006, “Ten Trends to Watch Davis and Elizabeth Stephanson </li></ul><ul><li>From “SHRM Workplace Forecast, 2006-2007” & “SHRM Special Expertise Panels 2007 Trends Update”, </li></ul><ul><li>Business Week Survey to 2,000 managers, published August 20, 2007 </li></ul><ul><li>“ Are They Ready to Work? Employers’ Perspectives on Basic Knowledge and Applied Skills of New Entrants to 21 st Century US Workforce,” key findings of survey to 400 employers by Conference Board, Corporate Voices for Working Families, Partnership for 21st Century Skills, and Society for Human Resources Management, October 2006. </li></ul>
    3. 3. McKinsey Quarterly – 10 Trends to Watch - Macroeconomic <ul><li>Centers of economic activity will shift globally and regionally </li></ul><ul><ul><li>Currently Asia (minus Japan) accounts for 13% world GDP and Western Europe has 30%+. Within 20 years Asia will catch up. </li></ul></ul><ul><li>Public sector costs will balloon, requires increase in productivity </li></ul><ul><ul><li>Aging population causes huge outlay for pension & health care. </li></ul></ul><ul><ul><li>Not just developed economies but countries with emerging markets demanding more retirement & health care security. </li></ul></ul>
    4. 4. Macroeconomic trends <ul><li>Consumer spending changes worldwide </li></ul><ul><ul><li>Billion new consumers worldwide in next decade with increase in discretionary spending – $4 trillion to $9 trillion plus. </li></ul></ul><ul><ul><li>Hispanic population in 2015 spend equivalent of 60% of all Chinese consumers. </li></ul></ul><ul><ul><li>Technology will give all consumers info and access to products. </li></ul></ul>
    5. 5. Ten Trends to Watch Societal and Environmental <ul><li>Technological connectivity transforms way people live. </li></ul><ul><ul><li>12% newlyweds last year met online, 2 billion use cell phones, billion Google searches a day (more than half not in English), 9 trillion emails a year. </li></ul></ul><ul><li>Integration of global labor market </li></ul><ul><ul><li>33 million college educated in developing countries </li></ul></ul><ul><ul><li>Companies shifting jobs where the talent is and not just low paying jobs. </li></ul></ul>
    6. 6. Societal and Environmental Trends <ul><li>Behavior of big business coming under increasingly sharp scrutiny. </li></ul><ul><ul><li>Current US ideology not understood or accepted around globe – intellectual property rights, free trade, shareholder value. </li></ul></ul><ul><ul><li>Regulatory backlashes </li></ul></ul>
    7. 7. Societal and Environmental Trends <ul><li>Demand for natural resources and strain on environment. </li></ul><ul><ul><li>Oil demand to grow by 50% in 20 years. Supply can not keep up with demand. Similar demands on copper, steel, aluminum. </li></ul></ul><ul><ul><li>Water shortage </li></ul></ul>
    8. 8. Ten Trends to Watch Business and Industry <ul><li>New global industry structures </li></ul><ul><ul><li>Nontraditional business models flourishing </li></ul></ul><ul><li>Management not an art but a science </li></ul><ul><ul><li>Technology and highly sophisticated software running companies. </li></ul></ul><ul><ul><li>Most CEO’s are boomers & impending leadership crisis is coming. As many as 50% senior managers leaving in next 5 years. </li></ul></ul>
    9. 9. Business and Industry Trends <ul><li>Access to information changing economics of knowledge. </li></ul><ul><ul><li>Google and other online tools allow instantaneous access. </li></ul></ul><ul><ul><li>Open source knowledge, new models of production, distribution and ownership. </li></ul></ul><ul><ul><li>World-wide patent applications rose 20% annually in last 10 years. </li></ul></ul>
    10. 10. SHRM Workplace Forecast – 2006 Top Three Themes Overall <ul><li>Rise in healthcare costs </li></ul><ul><li>Implications of increased global competition </li></ul><ul><li>Demographic changes, aging of workforce, impending mass retirement of baby boomers at about same time </li></ul>
    11. 11. Demographic Outlook <ul><li>In 2003, Hispanics became the largest minority group in US </li></ul><ul><li>Most population increase seen in ethnic and racial minorities - births and immigrants </li></ul><ul><li>Singles outnumber married couples with children </li></ul><ul><li>Later age for child bearing </li></ul>
    12. 12. Racial and Ethnic Composition of the Population 1980-2020
    13. 13. Demographic Impact <ul><li>Aging population </li></ul><ul><ul><li>Sandwich generation caring for children and parents </li></ul></ul><ul><ul><li>Fewer workers to support Medicare & Social Security </li></ul></ul><ul><li>Diversity of workers impacts workforce policies </li></ul><ul><ul><li>Flextime, telecommuting & sabbaticals </li></ul></ul><ul><ul><li>Training line managers to respond to differences - cultural, languages, generational, technology </li></ul></ul><ul><ul><li>Bringing retirees back into workforce </li></ul></ul>
    14. 14. Economic Outlook <ul><li>Rise in healthcare costs is most important economic trend </li></ul><ul><li>Rise in costs of retiree health benefits & governmental programs </li></ul><ul><li>Labor shortage – projected in 2012 will have 21 million jobs and only 17 million new entrants into workplace </li></ul><ul><li>Cost of security & war on terrorism causes continued economic uncertainty </li></ul>
    15. 15. Social Outlook <ul><li>Changing definition of family </li></ul><ul><li>24/7 workplace </li></ul><ul><li>Broadening diversity – religious, ethnic and cultural </li></ul><ul><li>Poor educational performance US students </li></ul><ul><li>Women attaining higher rates of education and professional degrees versus men </li></ul><ul><li>Global health issues – HIV, SARS & bird flu, plus US has highest obesity rate </li></ul>
    16. 16. Percent Households by Type Source: U.S. Census Bureau, Current Population Survey, March 2002 Supplement
    17. 17. Science & Technology Outlook <ul><li>Technology increases communications with employees and potential for monitoring employees </li></ul><ul><li>Increased theft of intellectual property and identity theft </li></ul><ul><li>Skills quickly become outdated and gap in skills learning – rich vs. poor and young vs. old </li></ul><ul><li>E-learning any time & any place </li></ul><ul><ul><li>Wearable computer devices </li></ul></ul>
    18. 18. Political Outlook <ul><li>Focus on Global and domestic security driving political agenda </li></ul><ul><li>Health care privacy and portability legislation </li></ul><ul><li>Increased political partisanship and state reactions related to the political party in power </li></ul><ul><li>Increasing grassroots pressures on labor practices </li></ul><ul><li>Political impact of federal deficit and cost of war in Iraq </li></ul><ul><li>Weakening of Affirmative Action - policies tested in courts </li></ul>
    19. 19. International Outlook <ul><li>Exporting of US manufacturing & other white collar jobs </li></ul><ul><li>Ethnic strife causing segregation of cultures and increased anti-Americanism </li></ul><ul><li>English spoken by ¼ of world’s population </li></ul><ul><li>Spanish is second language of US </li></ul><ul><li>Development of global labor standards </li></ul>
    20. 20. Employment Outlook <ul><li>Rising health care costs, continued double digit increase per annum over next 5 years </li></ul><ul><li>Employee demand for flexible work schedules & telecommuting </li></ul><ul><li>Growth in women and minority owned business </li></ul><ul><li>Benefits & compensation structured for diverse population and varied needs </li></ul><ul><li>Increase in hiring college grads and highly skilled workers </li></ul>
    21. 21. US Census Bureau, 2004 Supplement <ul><li>Average all states – educational background </li></ul><ul><ul><li>25.5% have some college </li></ul></ul><ul><ul><li>18.1% have bachelor’s degree </li></ul></ul><ul><ul><li>9.6% have advanced degree </li></ul></ul><ul><li>State of Tennessee – educational background </li></ul><ul><ul><li>23.0% have some college </li></ul></ul><ul><ul><li>17% have bachelor’s degree </li></ul></ul><ul><ul><li>7.3% have advanced degree </li></ul></ul>
    22. 22. Measuring Up 2006 – Report Card on Higher Education by National Center Public Policy and Higher Education <ul><li>In Tennessee 33% aged 18-24 were enrolled in college in 2006 </li></ul><ul><ul><li>Compared to top ranking states at 41% </li></ul></ul><ul><ul><li>Ranking TN below Korea, Greece, Finland, Belgium, Ireland, Poland, Australia, France, Hungary, Spain and New Zealand </li></ul></ul><ul><li>2006 Tennessee Report Card </li></ul><ul><ul><li>Preparation = C- (up) </li></ul></ul><ul><ul><li>Participation = C- (up) </li></ul></ul><ul><ul><li>*Affordability = F (neutral) </li></ul></ul><ul><ul><li>Completion = B (up) </li></ul></ul><ul><ul><li>Benefits = C+ (up) </li></ul></ul>
    23. 23. The Value of a College Degree? US Census Bureau, 2004 Supplement <ul><li>Average all States – avg. personal income </li></ul><ul><ul><li>$25,053 with high school diploma </li></ul></ul><ul><ul><li>$48,417 with college degree </li></ul></ul><ul><ul><li>$70,851 with advanced degree </li></ul></ul><ul><li>State of Tennessee - avg. personal income </li></ul><ul><ul><li>$21,815 with high school diploma </li></ul></ul><ul><ul><li>$43,644 with college degree </li></ul></ul><ul><ul><li>$67,986 with advanced degree </li></ul></ul><ul><li>For 2008, adjusted for annual 4% increase = $51,056 with college degree </li></ul>
    24. 24. % Change in Number of Jobs by Education Source Projected 2000-2010 Source: Bureau of Labor Statistics
    25. 25. 2007 SHRM Workplace Update <ul><li>SHRM expertise panels look at 13 areas for key trends and changes from previous year </li></ul><ul><li>Looks at trends in following areas: </li></ul><ul><ul><li>Corporate Social Responsibility </li></ul></ul><ul><ul><li>Employee Health, Safety and Security </li></ul></ul><ul><ul><li>Employee Relations </li></ul></ul><ul><ul><li>Ethics </li></ul></ul><ul><ul><li>Global </li></ul></ul><ul><ul><li>HR Consulting/Outsourcing </li></ul></ul>
    26. 26. 2007 SHRM Workplace Updates <ul><ul><li>Labor Relations </li></ul></ul><ul><ul><li>Human Capital Measurement/HR Metrics </li></ul></ul><ul><ul><li>Organizational Development </li></ul></ul><ul><ul><li>Staffing Management </li></ul></ul><ul><ul><li>Total Rewards/Compensation and Benefits </li></ul></ul><ul><ul><li>Technology and HR Management </li></ul></ul><ul><ul><li>Workplace Diversity </li></ul></ul>
    27. 27. Corporate Social Responsibility <ul><li>Businesses recognize necessity for corporate social responsibility as part of required strategy </li></ul><ul><li>Increase in transparency in operations </li></ul><ul><li>Awareness of gaps between “haves and have nots” </li></ul><ul><li>Business impact of Generation Y priorities </li></ul>
    28. 28. Employee Health, Safety and Security <ul><li>Influence of health insurance costs and new programs – “smokers penalties,” health risk assessments and wellness programs, particularly for diabetes and obesity </li></ul><ul><li>Concerns for health information protection and risks of identity theft </li></ul><ul><li>Ongoing concerns for communicable diseases and possible pandemic situations </li></ul><ul><li>More background and drug tests </li></ul>
    29. 29. Employee Relations <ul><li>Retention of talent is strategic objective – specific skill sets in short supply </li></ul><ul><li>Multi-generational employees see increased employee relations issues </li></ul><ul><li>Change in communications (social networks, blogs, etc.) and the new etiquette and ethics required for the workplace </li></ul><ul><li>“ Islamophobia” </li></ul>
    30. 30. Global <ul><li>How to manage global talent and have the right talent, particularly in fast growing countries (India, China) </li></ul><ul><li>Immigration reform and employee shortages (construction & engineering) </li></ul><ul><li>Balancing business needs with US centric versus global centric views </li></ul><ul><li>Multiculturalism </li></ul>
    31. 31. HR Consulting/Outsourcing <ul><li>Changing role of HR due to outsourcing, consulting and global needs. </li></ul><ul><li>Small organizations are outsourcing all of HR to Professional Employer Organizations </li></ul><ul><li>Greater use of metrics to justify HR costs </li></ul><ul><li>Specialized niche HR consultants </li></ul>
    32. 32. Labor Relations <ul><li>Union consolidation and attempt to organize more members in non-traditional areas </li></ul><ul><li>Impact of the cost of health care benefits to labor relations </li></ul><ul><li>Impact of immigration policy on union organizing efforts </li></ul>
    33. 33. Human Capital Measurement / HR Metrics <ul><li>Increasing demand to use human capital measures and HR metrics leading to standard sets of measures </li></ul><ul><li>Measures that are culturally sensitive and understanding of the various differences in acceptable practices </li></ul><ul><li>Increased use of technology for measurements </li></ul>
    34. 34. Organizational Development <ul><li>Increase awareness of OD and impact on business </li></ul><ul><li>Supporting targeted groups (generational, cultural) with specialized development </li></ul><ul><li>Organizational performance tied to talent management – ID, develop and retain those with critical KSA </li></ul><ul><li>More entry level workers lacking workplace etiquette, emotional intelligence, interpersonal skills </li></ul>
    35. 35. Staffing Management <ul><li>Looming skills and talent shortage </li></ul><ul><li>Shifting demographics and use of global talent </li></ul><ul><li>Increasing use of technology in recruiting </li></ul><ul><li>Increasing use of assessments for pre-employment </li></ul><ul><li>Continued use of metrics but increase in alignment with business goals </li></ul>
    36. 36. Total Rewards / Compensation and Benefits <ul><li>Proper oversight and compliance to regulations and increased transparency for executive compensation </li></ul><ul><li>Impact of aging workforce on total compensation packages </li></ul><ul><li>Risk and cost shifting increase both government to business and employer to employee </li></ul><ul><li>Total rewards increasingly using career development and work/life balance issues, and importance of effective communications of all total rewards </li></ul><ul><li>Performance management and alignment with total rewards and business strategy </li></ul>
    37. 37. Technology and HR Management <ul><li>Online social networking </li></ul><ul><li>Growth of ASP’s and outsourcing technology </li></ul><ul><li>Real-time web applications – ex. Remote interviewing, “pulse” surveys </li></ul><ul><li>Need for closer working relationships between IT and HR for HR technology </li></ul><ul><li>Legal issues for use of HR technology, ex. privacy issues and data storage </li></ul>
    38. 38. Diversity Management <ul><li>Linking diversity to overall business strategy to ensure commitment </li></ul><ul><li>Demographic shifts in workplace and impact to recruitment and retention efforts of HR </li></ul><ul><ul><li>Immigration and multi-cultural issues </li></ul></ul><ul><ul><li>Aging workforce and multiple generations working </li></ul></ul><ul><ul><li>Those with disabilities </li></ul></ul><ul><li>Need to address varying religious and spiritual needs of diverse workforce </li></ul>
    39. 39. Are They Really Ready to Work? Study by SHRM, Conference Board, Partnership 21 st Century, Corp. Voices Working Families <ul><li>63% predict a foreign language is important basic skill </li></ul><ul><li>Critical thinking 77.8% and creativity/innovation 73.6% are top two responses for increasing in importance </li></ul><ul><li>Top three applied skills important to the workplace are professionalism, teamwork and oral communications. </li></ul><ul><li>Employers list top deficiencies for college grads – written communications, leadership ability and professionalism. </li></ul>
    40. 40. Actions HR Professionals are Taking in Response to Trends <ul><li>Training managers to respond to generational differences </li></ul><ul><li>Changes in health care policies and plans in response to demographic changes </li></ul><ul><li>Changes in policies as response to federal and state regulations </li></ul><ul><li>Strategic HR planning and succession planning related to recruiting and retaining diverse employees </li></ul><ul><li>Increasing use of technology to perform transactional HR functions, and use of technology for more employee self service applications </li></ul>
    41. 41. Actions HR Professionals are Taking in Response to Trends <ul><li>Increasing HR’s role in corporate ethics and crisis management </li></ul><ul><li>Increasing investment in training for employees and HR staff </li></ul><ul><li>Building human capitol factors/metrics into key business transactions & planning to increase productivity to offset higher cost of business </li></ul><ul><li>More policies for work/life balance </li></ul><ul><li>Increase in policies for safety and security </li></ul>
    42. 42. Q & A