At the beginning of the year, many companies in a wide range of industries attempt to predict and forecast what the next 12 months will look like. This involves setting budgets, looking at new client opportunities, and crafting a plan and strategy that will make the new year more successful than the last.
A large component to this beginning of the year strategic planning is human capital. As such, executives and managers should be aware of the projected employment and workforce trends for the upcoming year. This article provides a brief synopsis of the key trends that we expect to impact employment in 2016.
The Intensifying Fight for Talent
According to the U.S. Bureau of Labor Statistics (BLS), there were 5.4 million job openings in October 2015. Labor experts expect the fight for talent to grow more intense in 2016. Some recent job board ads, for example, are offering sign-on bonuses of over $5,000 for high in-demand skills. Also, many workers are receiving job offers to only go back to their current employers and ask for and receive sizeable counter offers. There is no doubt that 2016 means a worker-controlled job market.
New Overtime Rules and Regulations
In early 2015, the President added a wage and hour regulation into the Federal Register that would require employers to pay overtime to salary employees who earn $50,400 or less per year. This is expected to become wage and hour law beginning in 2016, with all employers required to comply.
For the last few years, evolution in workplace technology has been constant. The goal is to make work easier for workers and improve productivity for the employer. These improvements come in many forms, including faster and more reliable broadband, more powerful smartphones and tablets, better collaboration software, and improved CRMs and ATSs. Most of these technology improvements help workers to be more flexible in their working patterns. However, employers should be wary about this workplace flexibility having an impact on work/life balance. Additionally, workplace distractions are expected to increase, and employment experts recommend that HR departments develop policy manuals on how the company is going to govern technology.
An alumni employee, or boomerang employee, is one that leaves the company only to return later. A recent study by The Workforce Institute found that 48 percent of companies had a policy against hiring boomerang employees in the past, but now 76 percent say they are more accepting of hiring them. This trend is due to more professionals switching jobs often, and the increased access to talent through technology. Companies are creating groups on social media so that former employees can stay connected. The benefits of hiring alumni workers are that they are familiar with the company culture and require less training.
With the growth of features in collaborative technologies, along with generational preferences, globalization, and the call for greater work-life balance, the corporate office is starting to become more decentralized and smaller. A New York Times article indicates that by 2020, the average amount of space per employee will drop to 150 square feet, down from 400 square feet in 1985. Additionally, according to the Harvard Business Review, 60 percent of employees aren’t even using the space allocated to them, with more workers opting to work remotely. As such, companies are realizing that they can save millions of dollars by shrinking their offices. Many top companies are moving away from open offices and creating multi-facet offices that give employees options – everything from cubicles to lounges and cafeterias.
Affordable Care Act (ACA) penalties will go into full effect this year. In 2016, 95 percent of companies with 100 or more employees will need to be insured, and companies with 50 to 99 employees will have to insure full-time workers. This could lead to companies laying off workers to save money, putting pressure on current workers to do more with a smaller headcount. Talent is already one of the largest costs to companies, and expensive healthcare benefits will only make it more so. Experts expect that, in order to remain profitable and appease shareholders, companies will elect to hire freelancers as opposed to full-time employees.
Already many companies are expanding their maternity benefits to compete for top talent and retain current workers. In the next few years, as the new baby boom from the millennial generation commences, this employment benefit will become more important. Currently, only 1 percent of companies offer unlimited maternity leave, while 64 percent of employees say they want it. Additionally, only 13 percent of people have access to paid family leave. A big movement currently trending is fathers being able to take leave as more women become the primary earners in the family. Today, approximately 76 percent of fathers go back to work in one week or less when they have a child.