This is Part II of a two part entry. Find the first entry here. I was sent this article recently. It seems to have a few Internet sources, but most reliably comes from the Workforce magazine/website (Subscribe ).
From e-mail to health care, and from artificial intelligence to the end of HR as we know it, here are forecasts of how different the world of workforce management will be 10 years from now.
Workforce-management decisions aren’t made with crystal balls. What they do demand is a clear sense of the landscape on the far horizon. As a human resources executive, you probably know what health care will cost your company next year.
But you’re far less certain whether or not legions of workers will be full-time telecommuters five years from now, or if defined benefits will even exist in 2013. Fortunately, there are forward-thinkers and trend-spotters out there who make it their business to suss out the future for us. Our visionaries don’t always agree with each other, as you’ll see. Still, their predictions of what factors will alter the world of workforce management are provocative, and may serve to inform and intrigue all of us who manage people.
| 13 | Help Wanted: Ten Million Workers |
The convergence of several trends–declining births, retiring baby boomers, and expected business growth–will create more jobs than there will be workers to fill them by 2010, experts predict. The math is relatively simple. The civilian labor force will increase by 17 million, reaching 158 million in 2010, reports the Bureau of Labor Statistics. But by then, the BLS says, the number of jobs will reach 168 million. Roger Herman, a futurist specializing in workplace issues, says pressure on baby boomers wanting to retire will be so great that they will be pulled back into the labor market. Even so, he says, older workers won’t show up in large enough numbers to fill the millions of jobs available. Herman says the problem will be aggravated by the shortage of skilled, educated workers already occurring in manufacturing, health care, and various technical fields.
| 14 | Outsourcing |
Outsourcing is to in-house human resources what Pac-Man is to dots. Double-digit growth is expected in the multibillion-dollar outsourcing market, dramatically gobbling up traditional human resources tasks and significantly altering people management. Companies spent $61.2 billion worldwide in 2002 on human resources management outsourcing, an amount expected to jump 11 percent annually, to $103.3 billion by 2007. Growing even faster will be in the one-stop shopping market, where companies bundle different human resources management services into one large contract rather than serving it up piecemeal. Industry analyst Marc Pramuk of IDC in Framingham, Massachusetts, says U.S. companies packaging end-to-end services did $6 billion of business in 2002. That business will more than double in five years, to $15.4 billion, a 21 percent annual growth rate, he says. Newer companies like Exult, a late-1990s start-up that is enjoying phenomenal growth, will battle it out for this business with older, established companies like Fidelity Investments, which has gone beyond its mutual fund and 401(k) business into human resources administration. A sample of things to come: Part of a broad deal with IBM called for the transfer of 700 IBM human resources employees into a Fidelity employer-services company.
| 15 | Recruiting Older Workers |
With the graying of the workforce, American business is going to have to pay attention to what older workers want and how to recruit them, says Deborah Russell, manager of Economic Security and Work at the American Association of Retired Persons. “Terms such as ‘fast-paced,’ ‘high-energy,’ ‘young,’ and ‘vital’ are often signals to older workers that they need not apply,” she says. AARP encourages companies to use terminology that better reflects age diversity such as “experienced workers” and “age-diverse.”
A recent AARP-sponsored study, using a nationally representative sample of 1,500 workers age 45 to 74, shows that 69 percent plan to work in some capacity during their retirement years. They work not only for money but also for intangible benefits such as enjoyment and a sense of purpose. Poll participants focused on “soft benefits” such as adequate time off and flexible schedules as well as “hard benefits,” including health-care benefits and insurance and good pension benefits as “absolutely essential parts of their ideal jobs.”
| 16 | Mergers |
Mergers and acquisitions are like courtships and marriages, says Ira Wolfe, a Leola, Pennsylvania, workforce consultant. Like human couples, companies “fall in love, and then later decide they can’t live with the other.” In the coming years, people management will play a far more pivotal role in corporate mergers. Wolfe estimates that company purchases conducted for the purpose of buying another company’s people could represent as many as half of all acquisitions. Now, he estimates, only about 15 to 20 percent of acquisitions are completed because one organization wants another company’s workforce. One of the principal reasons why mergers and acquisitions have failed in the past is that workforce management isn’t brought into negotiations until the deal is consummated. No one studies the compatibility of the two cultures. Worse yet, the buyer often tries to change its partner, rather than adopting the ways of working that made the acquiree attractive in the first place.
| 17 | Freelancers and Consultants |
Today, some 30 million Americans are self-employed, and with companies increasingly enamored of outsourcing as a way to control costs and increase flexibility, the use of freelance contractors and consultants is likely to grow. Dan Pink, author of the 2001 book Free Agent Nation, predicts that corporate
workplaces will evolve into a continually shifting mix of employees and freelancers, “to the point where it will become difficult to distinguish one from the other.” That may lead to profound changes. Company health plans may begin to disappear, as workers on the move opt for their own portable health coverage, possibly subsidized by an employer. “Companies may not be hiring people for jobs,” Pink says.
“Instead, they may be saying, ‘We definitely want this person around for 10 years to accomplish these particular tasks, and after that, we’ll see.’” The concepts of retention and career development, he says, may be supplanted by an emphasis on maintaining long-term connections to workers who manage their own rise, moving in and out of corporate positions with increased freedom.
| 18 | Pay for Wellness Performance |
Instead of waiting to pay for the treatment of sick employees, some employers will soon turn to the concept of wellness management–with a twist. They’ll give employees a concrete financial incentive to participate, says Tom Lerche, senior vice president of Aon Consulting. The process, which is handled through an outside organization to preserve privacy and HIPAA compliance, begins by having employees and their covered spouses take a voluntary health-risk appraisal each year. These questionnaires identify factors that lead to such chronic diseases as asthma, heart disease, and diabetes, which can account for 20 to 35 percent of a company’s medical expenses, Lerche says. If the appraisal identifies two or more risk factors that point to a potential health problem, the employee or spouse is a candidate for health coaching with a nurse, health educator, dietitian, or exercise physiologist. The coach sets up a plan for the health risk and keeps track of the employee’s progress via weekly phone calls. The incentive for the employee is a reduction in insurance premium payments–$55 instead of $75 per month, for instance, Lerche says. And if the employee stops participating, the insurance
discount can be suspended until he gets back on track. “Too much of what we do is a short-term approach,” he says. “Fifty percent of disease is ultimately preventable,” and this approach can head off
many major health problems. “It’s for the employer that has low turnover, wants to invest in employees, and wants to see to it that they’re productive and in good health” in the working years ahead, Lerche says.
| 19 | Spirituality at Work |
Americans eat too much. They spend too much money. They are obese and in debt and worried about personal safety and job security–especially since 9/11 and the economic downturn, says Harriet Hankin, president of CGI Consulting in Malvern, Pennsylvania. And those are some of the reasons they’re increasingly looking for spiritual comfort, she says. “The biggest change in the workplace is the interest in spirituality. It’s about doing the right thing. It’s not about religion. It’s about job satisfaction. Jobs in the future will have to be more meaningful. Pay won’t be as important as a good job.” Referring to the rising number of books on spirituality and business and in subjects such as work/life balance, Jeffrey Pfeffer, professor of organizational behavior at the Graduate School of Business at Stanford University, says he’d agree that spirituality in the workplace is a noteworthy trend. Workers are looking for meaning and purpose, he says. “The word ‘spirit’ comes from the word ‘to breathe.’”
| 20 | Women at Work |
With steeply mounting numbers of educated women, glass ceilings are going to shatter in the coming years, says John A. Challenger, CEO of international outplacement firm Challenger, Gray & Christmas, Inc. Between 1979 and 1999, the number of women earning four-year college degrees jumped 44 percent, from 444,000 to 640,000, he says. At the same time, the number of men receiving four-year degrees is declining–from 532,000 in 1993 to about half a million in 1999. As women earn more college degrees and ascend more corporate ladders, Challenger says, they “will make further inroads into management and exec ranks, and the workforce will have to create an environment where a balance between work and home life is more valued. Temporary and part-time work and job sharing will be more common.” There also will be more re-entry opportunities for women who leave the workplace for a few years and then return. At the same time, more men will be moving into “women’s jobs” like nursing and teaching, Challenger adds. The result won’t be that women are crowded out of the job market. “The major change will be this: The line between men’s and women’s work will blur and fade.”
| 21 | Skills Shortage |
A job-skills shortage is already reality in the manufacturing industry, and is likely to spread to other industries over the next 10 to 15 years as baby boomers retire. Despite a recession that cost 2 million manufacturing jobs, a recent study by the National Association of Manufacturers warns that “manufacturing could experience a shift from merely having a talent shortage to facing a serious labor crisis.” That’s just manufacturing. Warnings also are forecast about the need for savvy, well-trained workers in job categories such as information technology and the global-energy and electrical-utility industries. Shortages are expected in the global competition for managers, engineers, technicians, skilled craftspeople, and front-line workers, mostly jobs requiring a college degree or technical education. Experts say changes must come on a broad front, from better technology and skills training in secondary schools to aggressive recruitment to a coordinated national workforce policy.
| 22 | Security vs Privacy |
As technology becomes more sophisticated, the ability of those who administer company–and government–computer networks to monitor the comings and goings of workers will grow exponentially. While privacy experts shudder, cameras, keystroke logging, biometric devices, and network monitoring are becoming de rigueur within many organizations. In the future, the cat-and-mouse war between businesses and crooks will lead to more sophisticated surveillance, the standard use of data encryption, and sophisticated data-mining techniques that spot potential problems and risks by analyzing patterns. “Increasingly, companies are realizing that security is not an option, it’s a basic requirement,” says Alan Brill, senior managing director at security consulting firm Kroll Inc., New York. Not surprisingly, the threat of terrorism is raising the stakes. For example, the U.S. government’s Terrorist Information Awareness program proposes to sift through vast quantities of business and government data to detect suspicious activity. “The dangers are greater than ever,” Brill says. “It’s clear we’re living in a new era.”
| 23 | Accounting for People |
Let’s say you took up the hobby of collecting every annual report from public companies over the last 40 years. You’d be shocked at how little you’d learn about what organizations often say are their “most important assets”–their people. A few–like the Atlanta Braves, EDS, and Deutsche Bank–have gone out of their way to tell people what their workforces are worth or how much value their training will bring in the long run. In the years to come, however, human resources executives will start to see many more statistics on turnover, absenteeism, and revenue per employee in corporate publications.
“What’s the basis for competition in the 21st century?” asks Thomas P. Flannery, the director of Ernst & Young’s human capital practice. “It’s your ability to think through complex problems, serve the customers better, and be more creative.” All these qualities come down to the capabilities of human beings, he says. Wall Street analysts will want to see what corporations know about the people who are winning patents for the company and closing big deals. And when companies show what people are worth, it also reminds shareholders how vulnerable those “important assets” are. Machines stay put, but as Flannery says, “People can walk at any time.”
| 24 | Universal Health Care |
As costs soar and the number of uninsured Americans–both employed and unemployed–rapidly expands, there are about as many predictions about where health care is headed as Carter’s little pills. Employers are paying an increasingly large share of the cost–and so are employees. And almost everyone acknowledges that some dramatic change in health care is likely, perhaps even inevitable, in the next decade. The country is indeed moving toward some form of universal health care system, says Jeffrey Pfeffer, professor of organizational behavior in the Graduate School of Business at Stanford University. He points out that the United States is the only industrialized country where access to health care is dependent on employment. Says Pfeffer, “In other countries, access to health care is a fundamental human right.”
| 25 | The End of HR As We Know It |
Conventional wisdom says that human resources finally has achieved its sought-after seat at the table. But the ability of human resources to add value at a strategic level “is currently more promise
than reality.” That’s the sobering finding of Creating a Strategic Human Resources Organization (Stanford Business Books, 2003), a long-term study of human resources by Edward E. Lawler III and Susan Albers Mohrman. The authors found that today’s people managers still are most comfortable with traditional human resources activities. “If they want to be effective business partners, they need to change their skill set,” Lawler and Mohrman say. Almost 30 percent of the companies in the study promote human resources executives who come from the business side, not human resources. “In essence, some companies may have decided that the HR strategic-partner role is too important to leave to someone with an HR background.” The study’s conclusion: Human resources must reinvent itself. “The old approaches and models simply are not good enough.”
Workforce, June 2003, pp. 43-56 — Subscribe Now!
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