Finding the right consultant for your organization’s project can take time, a luxury that some managers may not have. But TechSoup recommends investing the time: “You are going to be investing significant time and money in this; it’s best to shop around and interview several candidates.” So, where to begin? The Web site offers several matters for consideration by managers at nonprofits (TechSoup’s target audience) and for-profits alike. Among them: “Does the consultant’s technical experience match your needs?” “How busy is the consultant?” “Can the project be completed remotely?” For the specifics, check out “Choosing the Right Consultant.“
More California Employers Offering CDHPs
The dominance of managed care in the California market led many benefits experts to doubt if consumer-driven health plans with high deductibles would gain much traction there.
But a recent survey has found that 38 percent of employers in the nation’s most populous state now offer high-deductible health plans to their employees, up from 18 percent in 2007.
However, only 10 percent of employers offering HDHPs to their employees also offer a health savings account, while less than 1 percent offer a health reimbursement arrangement, according to the latest edition of the California Employer Health Benefits Survey, a joint project of the Oakland, California-based California Healthcare Foundation and the National Opinion Research Center.
Even though the percentage of employers offering HDHPs in California surged, the proportion of employees enrolling in the plans remained unchanged from 2007, at 4 percent. By contrast, enrollment nationally in the plans doubled from last year to this year, to 8 percent.
More than three-quarters of California workers were given a health maintenance organization option in 2008, according to the survey, compared with just 41 percent of workers nationally. As such, California workers have been consistently more likely to enroll in HMOs than covered workers nationally, who are more likely to enroll in preferred provider organization plans, the survey noted.
In California, 52 percent of covered workers were enrolled in HMOs in 2008, while 33 percent were enrolled in PPOs, 11 percent in point-of-service plans and 4 percent in HDHPs. By comparison, 20 percent of U.S. workers are enrolled in HMOs, while 58 percent are enrolled in PPOs, 12 percent in POS plans and 8 percent in HDHPs.
Among other findings of the survey:
• Employer-based health care premiums rose by an average of 8.3 percent in 2008, the same as 2007.
• More than half of California employers offered coverage for same-sex domestic partners, more than double the national average. Because of a change in survey wording, the 2008 results could not be compared with those of prior years.
• Thirty percent of covered workers in California were enrolled in a partly or completely self-insured plan in 2008, compared with 55 percent nationally. The gap between the state and national figures is associated with California’s high HMO enrollment since HMOs are less likely than other plans to be self-insured, the survey noted.
• This year’s survey, which was conducted by interview from April to July, included 796 randomly selected participants drawn from the Dun & Bradstreet list of private employers with three or more workers.
For complete results of the survey, visit www.chcf.org.
Filed by Joanne Wojcik of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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More Layoffs Reported at HR Software Firms
The job cuts infecting the economy have come to the once highflying HR software field. Authoria, one of the leading vendors of talent management software, recently trimmed its workforce partly in response to the sagging business climate.
“We did do a reduction,” Authoria chief executive Jim McDevitt said Thursday, December 18.
McDevitt, who took the helm of the Waltham, Massachusetts-based firm last month, declined to specify the number of pink slips, but he called the trim “fairly minimal.” McDevitt said the reduction focused on nonrevenue-generating areas, citing human resources and information technology.
Authoria now has between 260 and 270 employees, McDevitt said. Among the Authoria staff members being cut is Nina McIntyre, the firm’s senior vice president of marketing.
Authoria’s staff reductions are part of massive cuts under way at U.S. businesses, which are retrenching amid a recession. More than 1.2 million payroll jobs were lost in September, October and November.
HR software has been one of the fastest-growing corners of business software, and talent management applications—which refer to tools for key HR tasks such as recruiting and employee performance management—helped lead the boom.
Some in the HR software industry have argued that such products as succession planning applications would be desirable in a downturn because they can help companies downsize. But it’s unclear how well spending on talent management systems is holding up given the faltering economy.
Terry Tillman, equity analyst at investment firm Raymond James & Associates, questioned the demand for performance management software as he downgraded his rating on shares of software vendor SuccessFactors on December 17.
“We had believed that performance management would represent a much more resilient spend category given the strategic nature of more systematically measuring employee performance and enabling high-value activities such as succession planning and compensation management,” Tillman wrote as he downgraded SuccessFactors shares from “strong buy” to “market perform.”
“Unfortunately, economic dislocation seems to have become so great that even the low-cost nature, ease of use of the company’s solutions, and derived operational benefits are not enough to get deals closed and/or prevent project delays,” Tillman added.
Tillman also wrote of cuts at SuccessFactors: “We have heard the company has done another round of job cuts, above and beyond its prior 10 percent reduction in force executed in early November.”
Asked whether the company laid off employees recently or in some way reduced its headcount, Stacey Epstein, SuccessFactors’ vice president of marketing communications, said she could not comment.
In the first quarter of this year, SuccessFactors terminated dozens of employees. The company declined to call the reduction a layoff, even though SuccessFactors cut employees in conjunction with the elimination of a business group.
Not all talent management software firms are handing out pink slips.
“We have not had any job cuts,” said Nate Swanson, head of investor relations for Taleo.
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Taleo Facing More Legal Challenges
In the weeks since Taleo revealed a review of its accounting policies, the HR software vendor has received plenty of attention from the legal profession.
Two law firms have filed shareholder suits accusing Taleo of misleading investors. About 10 other law firms have issued press releases related to the litigation—in most cases alerting Taleo investors that they could become lead plaintiff in the matter.
Such plaintiff attorney actions are common in securities litigation, as firms seek the role of lead counsel, said Kevin LaCroix, a partner in Beachwood, Ohio-based OakBridge Insurance Services, which helps firms buy liability insurance.
“They’re trolling for plaintiffs,” LaCroix said. “It’s a complicated race to the courthouse.”
It’s not uncommon for companies to face shareholder suits after their stock drops sharply—something Taleo experienced November 11, the day after it announced the accounting review. In many instances, the lawsuits are quickly dismissed, LaCroix said. But there’s still something of a stain on firms.
“It’s not good publicity,” LaCroix said.
Taleo is one of the leading players in the fast-growing field of talent management software, which refers to tools for key human resources tasks such as recruiting and employee performance management. Over the past 15 months, Taleo has made a splash with its performance management software, its acquisition of rival Vurv Technology and its plans to develop an online hub for talent management matters.
Less positive publicity began November 10. That’s when Taleo said it would not file its Form 10-Q report for the quarter ended September 30 with the Securities and Exchange Commission by the November 10 due date.
Taleo also said its independent accounting firm asked it to re-evaluate whether the company’s practices with respect to the timing for recognition of application and consulting revenues were appropriate. Taleo said it was reviewing the issues raised by its auditors to determine if an alternative accounting treatment should be adopted.
The next day, shares of Taleo fell nearly 30 percent, closing at $7.83. On Thursday, December 18, Taleo shares closed at $7.41, down 6 percent from their closing price Wednesday.
On November 14, Vermont-based law firm Johnson & Perkinson filed a lawsuit in the U.S. District Court for the Northern District of California accusing Taleo of a scheme to defraud investors.
Just over a month later, on Wednesday, December 17, the Radnor, Pennsylvania, law firm of Barroway Topaz Kessler Meltzer & Check also said it filed a shareholder suit against Taleo. Its suit, it said, accuses Taleo of failing to disclose and misrepresenting “materially false and misleading” financial statements.
Nate Swanson, Taleo’s head of investor relations, gave the same response to the Barroway complaint as he did to the earlier Johnson & Perkinson suit. “We think the suit is without merit and premature,” Swanson said.
He added that Taleo continues to work with its accounting firm, Deloitte & Touche, and that Taleo accounting policies have not changed since before the company went public in 2005.
LaCroix said plaintiff attorney firms in securities litigation seek to represent the shareholder with the greatest financial loss, who may get to serve as lead plaintiff in a class-action case. Over the course of five years, roughly 10 percent of publicly traded firms get hit with shareholder lawsuits, LaCroix said. But about 40 percent of those suits are tossed out on an initial motion to dismiss the case, he said.
Securities issues can become a bigger deal if the U.S. Securities and Exchange Commission decides to investigate a firm. Executives also can find themselves distracted by a big legal hullabaloo. “It can be a burden,” LaCroix said.
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FMLA Amendments Add Military Family Leave
The Department of Labor has issued revised regulations for the Family and Medical Leave Act that will take effect January 16, 2009. Among the changes are regulations to implement statutory amendments signed into law by President Bush in January 2008 allowing new leave entitlements for family members of military personnel.
The FMLA now permits family members of wounded military personnel to take up to six months of unpaid leave to care for them during their rehabilitation in a single 12-month period. It also entitles family members to take time off to manage short-notice deployment, military events and related activities, child care and school activities, financial and legal arrangements, counseling, rest and recuperation, post-deployment activities and any additional activities agreed to by the employer and employee.
Also, obtaining medical certification regarding a “serious health condition” has been extended to allow employer representatives to contact the employee’s health care provider for this certification. However, if the certification is incomplete, the employer must notify the employee in writing and give the employee seven calendar days to provide the employer with this information. The employer may also require employees to provide a new certification every 12-month FMLA period if a condition lasts longer than one year, or to require recertification of an ongoing condition every six months.
In addition, the new rules also require employers to provide employees with a general notice about the FMLA, an eligibility notice, a notice of rights and responsibilities, and a designation notice. The time period for various notices has been extended from two business days to five. Additionally, it allows employers to require employees to exhaust paid leave before taking unpaid leave. The new rules treat vacation and personal and sick leave the same way. 29 CFR, Part 825.
Impact: Employers are advised to consult the new regulations’ entitlements and notice requirements. An employer may now be liable when it fails to follow the notification rules and the employee is caused harm as a result of this failure.
December 2008 — Register Now!
Class of ’98 Hits and Misses on HR’s Future
Overly optimistic, but on the right track.
That sums up the quality of predictions made by a group of experts a decade ago, when Workforce Management (or Workforce, as it was called then) asked them to forecast what HR would look like in 2008.
The panel of HR executives and researchers was largely on the mark, for example, in forecasting that “collaborative cultures” would become the workplace model; that many jobs would be “redesigned to be much broader in scope, especially in management positions, resulting in leaner headcounts”; and that the continued emergence of a world marketplace would “require development of an international workforce.”
But the futurists overreached on a number of forecasts. Consider the utopian prediction that “families will return to the center of society; work will serve as a source of cultural connections and peripheral friendships.” And the still-futuristic notion that “Freelance teams of generic problem solvers will market themselves as alternatives to permanent workers or individual temps.” Then there’s this example of wishful thinking: “HR will have a ‘seat at the table’ as part of the top management team and report directly to the CEO in most companies.”
That hasn’t happened, says Jac Fitz-enz, chief executive of consulting firm Human Capital Source and one of the 10 panelists from 1998.
“In certain areas, we had the right direction,” Fitz-enz says. “We just expected things to happen faster than they did.”
Jason Averbook, CEO of consulting firm Knowledge Infusion, has a similar view. He says HR departments have spent more time getting up to speed on such topics as virtual work arrangements, the global nature of work and just-in-time learning than putting the ideas into practice. “The last 10 years have been spent educating HR around those concepts, not HR implementing those concepts,” he says.
For the story a decade ago, Workforce Management asked Fitz-enz and his peers to generate and rank predictions in six categories. Workforce Management has conducted a similar exercise this year, with a largely new set of panelists.
Though not all the 60 predictions from 1998 have materialized, the top-ranked choices from each category reveal good forecasting:
Workplace flexibility: Collaborative cultures will be the workplace model.
Global business: The role of corporate HR will change to that of creator of overall values and direction, and will be implemented by local HR departments in different countries.
Work and society: Family and life interests will play a more prevalent role in people’s lives and a greater factor in people’s choices about work—there will be more of a “work to live” than a “live to work” mentality.
Workforce development: Lifelong learning will be a requirement.
Definition of jobs: Organizations won’t pay for the value of the job but for the value of the person.
Strategic role of HR: Successful HR departments will focus on organizational performance.
Today’s growing interest in corporate social networks, ad hoc teams and in the cooperative style of Millennials shows that collaborative cultures are growing in importance, even if they are not yet the workplace model. And to take another of these top predictions, companies do seem to care more about finding and tapping the value of individual employees, rather than simply paying for a job. Consider all the attention to identifying and grooming high-potential employees in recent years, as well as the push for better succession planning and career development.
On the other hand, there are some major developments in workforce management that the 1998 story largely ignored. It failed to capture the emergence of metrics in HR and increased interest in quantifying the return on “human capital” in the past decade. Nor did the panelists forecast the mushrooming importance of complying with various laws and regulations—a trend that hit HR and other corporate functions in the wake of the Enron and stock-option-backdating scandals.
In other areas, the panel had the right idea in general, but set the bar too high. HR, for example, continues to struggle in its quest to have a seat at the table. Jodi Starkman, executive vice president at consulting firm ORC Worldwide, says HR for the most part hasn’t spearheaded efforts to optimize the performance of organizations.
It could do so, she says, through such means as having visibility into the global talent pool, which would enable it to deploy people better. “My observation is that HR in most organizations is still barely a partner, let alone a leader,” Starkman says. “Ten years later, it continues to play a largely transactional role in most organizations.”
The software systems used by HR officials haven’t helped much, Averbook says. For years, vendors have been touting “strategic” human capital management applications. But the tools have by and large fallen short, Averbook argues, beginning with the employee data typically found in HR systems.
Commercial social networking sites do a better job gathering information about people, he says. “LinkedIn and Facebook know more about the employee than the company does,” Averbook says.
Some of the predictions from this year’s panel are similar to those made a decade ago, underscoring the fact that the field hasn’t changed as fast as many expected. Even so, a number of panelists this year said the pace of change would increase in the coming decade.
Fitz-enz says that breaking down tradition is not a speedy process.
“You’re talking about evolution,” he says. “And evolution takes time.”
Workforce Management, December 22, 2008, p. 23 — Subscribe Now!
Our Panel of Experts
Kevin Kelly Americas and Israel director, people Ernst & Young | Kelly oversees day-to-day management of strategy and operations for Ernst & Young’s Americas people team. The professional services firm has been on Fortune magazine’s list of the 100 Best Companies to Work For 10 consecutive years. |
Terry Laudal Senior vice president of human resources, Americas, Japan and Asia Pacific SAP | Laudal is responsible for overseeing human resources for SAP. This year, the Germany-based business software company was named by the Great Place to Work Institute Germany as the best large workplace in Germany for the fourth consecutive year. |
Virginia Clark Global head of learning and talent management SAP | Clark is responsible for the development of talent across the SAP organization worldwide. |
Nandita Gurjar Vice president and group head, human resources Infosys Technologies | Gurjar handles HR management for more than 94,000 employees. Last year, the India-based technology services firm was named by the Great Place to Work Institute India as one of the 25 best workplaces in India, and earned an Optimas Award from Workforce Management for Global Outlook. |
Libby Sartain Former head of HR Southwest Airlines, Yahoo | During her tenure, both Yahoo and Southwest earned spots on the Fortune 100 Best Companies to Work For list. She is on the board of directors of coffee firm Peet’s Coffee & Tea and is co-author of HR From the Heart and Brand From the Inside. |
Dave Ulrich Professor University of Michigan’s Ross School of Business | Ulrich studies how organizations build capabilities of speed, learning, collaboration, accountability, talent and leadership by using human capital. He has written or co-written several books, and his honors include being ranked top management guru by BusinessWeek. |
John Boudreau Professor University of Southern California’s Marshall School of Business | Boudreau has studied the connection between superior human capital and sustainable competitive advantage. His research has received the Academy of Management’s Organizational Behavior New Concept and Human Resource Scholarly Contribution awards. |
John Haggerty Managing director of executive education Cornell University’s Center for Advanced Human Resource Studies | Haggerty’s research interests include HR functional excellence, applications of technology in HR and measures of strength of HR systems. He had a 27-year career as an HR practitioner, including 21 years at General Electric. |
Susan Meisinger Former CEO Society for Human Resource Management | From 2002 until June 2008, Meisinger headed the HR field’s largest professional group, which has nearly 170,000 members. During her tenure, SHRM opened offices in India and China and started a public affairs campaign to highlight the value of the profession. |
Top Predictions
Structure of Work
1. There will be an increased focus on infrastructures—such as social networks and wikis—to support building strong relationships and collaboration.
2. The structure of work will become more adaptive, more informal and less focused on formal structure and static design solutions.
3. (tie) “Agile” organizations will have survived rampant aggregation and consolidation, and all organizations will be developing greater agility.
There will be greater demands on HR professionals to be businesspeople, with competencies in finding and retaining talent and in managing contract and freelance workers.
Organizations will have the ability to personalize the employee value proposition, helping employees find value in the work they do based on how they interact with the company. Some employees will be full time and long term. Others will be short term and part time.
Flexibility will no longer be optional. Employees will expect to utilize both short- and long-term flexibility options to meet their needs.
The most successful organizations will have a performance culture or meritocracy and will demand extraordinary effort from those who wish to achieve leadership positions.
8. Technological progress and the evolution of virtual networks and social vetting—that is, using networks such as LinkedIn to establish trust and research people’s backgrounds—will increase workplace flexibility. The trends will increase the use of emerging work structures that involve engaging professional and social networks through means such as “crowd sourcing”—when an organization invites the public to help solve a problem.
9. Organizations will work across internal and external boundaries, connecting and customizing internal actions to external customers and investors.
10. The talent market will look a lot more like eBay than Monster or Yahoo HotJobs. Candidates will put themselves up for bid for specific work, hours and duration and will name their minimum price, including benefits and perks. Employers will contract with each worker for what will be delivered.
Global Business
1. Companies will need to balance the need for a unified global culture with local strategic and cultural differences and make core global values locally relevant and easily understandable for all employees.
2. (tie) The business world will continue to be flattened by globalization, changing demographics, the ubiquity of technology and regulatory compliance. Conducting business on this level playing field will require a change in mind-set, strategies and operations.
Operating in a global economy will create even more demand for leaders with global experience. This means it will be more important for key talent to have expatriate experience.
4. (tie) Companies will find their best people anywhere in the world, so successful workers will be willing to work outside their home country.
The concept of offshoring will cease to exist. Talent will exist globally and companies will go where the talent is. The purpose will not be to get the lowest-cost labor, but rather the highest-quality talent. This will be especially true with technical and creative workers.
Global companies will become more adept at managing a global enterprise on a 24/7 basis, with more management and technology systems in place to allow work to be easily passed around the world.
There will be a more progressive use of partnerships and alliances across functions, organizations and customers to build more collaborative and innovative ways to compete and win market share.
8. The hunt for inexpensive labor will continue, but the evolution of economies from low cost to high value will be quicker, and increasingly, a low-cost labor strategy will be more difficult to sustain.
9. Organizations will master the paradox of managing both large global companies and micro units at the local level. They will meet the challenge of being global even as they react to local conditions.
10. Organizations that leverage supply chain efficiencies on a continuous basis globally will flourish. Organizations embedded too deeply in any single geography will be at an increasing disadvantage.
Work and Society
1. Societies throughout the world will focus on work as a more important crucible for social progress and values. The memory of today’s financial crisis will leave a legacy of greater scrutiny and regulation of issues such as fairness, pay differentials and ethics, particularly in traditional Western economies.
2. Millennials will redefine work, doing work at home and taking home to work. This means blurring the boundaries of life and work. More workforce mobility will allow people to work from home and at different hours.
3. There will be more emphasis on collaboration and using technology to support it.
4. As the generation born around 1980 takes its place leading major global organizations, the formative events in those workers’ lives—such as aging parents, the terror attacks of September 11, 2001, and the 2008 financial crisis—will lead to greater C-suite emphasis on corporate social and environmental responsibility.
5. Flexibility will be an expectation of employees.
6. There will be a significant problem of retirement in the West. With people living longer and fewer people in the workforce, retirement will have to be redefined.
7. Balance will still be an issue. Work practices in the most successful firms will have had few changes. Technology, and especially ubiquitous connectivity through wearable devices such as eyeglasses with built-in computer screens, will continue to blur the distinction between working and not working.
8. For nations such as India, where a large number of young employees are entering the workforce, there will need to be a major shift to address their needs and concerns. These are people who may frequently ask, “What’s in it for me?” Organizations need to show that they have the flexibility to adapt to these changes while being able to maintain a strong culture.
9. (tie) Generation Y issues, such as the perception that Gen Y employees will require greater workplace flexibility policies, will have had far less impact on business reality than predicted. Talented people, willing to work very hard, will flourish in most organizational settings.
Corporate responsibility and serving the wider community will be an integral part of an organization’s business strategy.
Recruiting and Workforce Development
1. Recruitment and development will increasingly be seen as part of an integrated workforce-supply optimization process. Both will become virtual, global and just-in-time, but they will also be transformed through an increasing emphasis on optimization, differentiation and return on investment.
2. There will be a continued and increased demand for top talent. The gap between the best and the rest will be greater. There will be more demand for creativity, innovation and thought leadership.
3. Employers will compete as intensively for workers as they do for customers. Branding an organization as a place for workers will be as important as branding for consumers.
4. Firms will become adept at sourcing and engaging transient talent around short-term needs, and will focus considerable energy on the long-term retention of smaller core talent groups.
5. Leadership development will be a critical need. Global leaders must develop strong decision-making, business and people management capability in diverse cultures.
6. With a more flexible workforce, employers will struggle with the funding of workforce development. They will be hesitant to train workers only to see them leave. Training and development may be tied to some contractual time commitment on the part of the worker.
7. (tie) More focus will be placed on searching for people who match companies, not just people who have the skills that companies need.
The lack of skilled workers will be a global phenomenon, making the war for talent a global war. Successful HR professionals will be much more adept in fighting this war and will develop expertise in work visas, employment and privacy law around the globe.
9. (tie) Workforce development will be seen as a holistic approach that meets the needs of clients, individuals, organizations and surrounding communities.
There will be more development inside and outside of work. People will be encouraged to take a “social sabbatical” as a development experience, for example.
Strategic Role of HR
1. The strategic role of decisions about talent and how it is organized will increasingly be recognized as pivotal to an organization’s sustainable strategic success. Leaders will be held accountable for the quality of those decisions.
2. HR issues will be measured much more as part of the business plan.
3. Talent management will become the prime focus of HR.
4. HR will be heavily involved in helping build organizational strategy, including such decisions as which markets to enter, which countries to choose for expansion and which analytics to inspect.
5. (tie) A “decision science” approach will be the foundation of human resources. HR will view talent in a supply-chain fashion and help the business understand workforce trends to make sound decisions.
HR will be part of strategy formulation and execution discussion.
HR will play a more significant role in developing leadership for an organization.
HR will go the way of finance and accounting. There will be two career paths. One will be the equivalent to the comptroller in an organization, focused on HR delivery and compliance issues. The other will be equivalent to finance: focused on the business strategy relative to talent needs, workforce development and organizational design.
9. The full-time permanent jobs that remain in HR will require more business acumen and more HR depth than ever imagined, leading to a continued and greater global shortage of the needed talent.
10. (tie) The role of the “HR department” will vary widely, becoming the repository of expertise and advice on talent in some organizations, but in others, this role may be taken by experts from other disciplines, with HR focusing more on processes, vendor management, etc.
To remain successful in a flat world, predictability, sustainability, profitability and risk management are critical. Hence, HR’s value will also come from helping the organization tackle such areas as people-related challenges, risk and compliance issues, sustained growth and the looming talent shortage.
The ratio of HR staff to firm population will be dramatically smaller.
Compensation and Benefits
1. Companies will need to offer tailored benefits to meet diverse needs and attract talent. As a result, there will be more menu-like choices available for employees relative to their personal lifestyle (e.g., risk-reward incentive designs, benefit options, etc.).
2. (tie) Increasingly, organizations will help their employees understand that benefits have expanded to include an organization’s ability to provide opportunities to build skills and career in an inclusive and flexible work environment through challenging work assignments, career mobility, formal and on-the-job learning, coaching and a feedback-rich culture.
Executive compensation still will be a critical responsibility of HR, and there will be even greater reliance on outside consultants to help design programs. But corporate boards, concerned about consultants being too close to executive management, will seek HR expertise, resulting in many more HR professionals having positions on corporate boards.
There will be more creative ways to tie employee wealth to firm performance, such as performance shares, and not just stock options.
5. There will be more accountability associated with CEO and senior leader pay, with more transparency.
6. (tie) Traditional compensation and benefits will evolve toward a focus on total rewards, with a commensurate emphasis on customization, differentiation and integration across all elements of the employment relationship.
Compensation and benefits will be more tied to financial results and behavior results—that is, demonstrating the right competencies, which will be defined more from the customer point of view.
Organizations will have to work to educate employees on the total value proposition they receive. Compensation is only one component.
9. Benefits will be more globally similar, and portability will increase.
10.There will be an expansion of creative benefit offerings to address different workforce needs, such as elder care, pet care, concierge services and
HR 2018 Future View
The concept of “offshoring” will cease to exist. Millennials will redefine jobs, doing work at home and taking home to work. The labor market will look more like eBay than Monster or Yahoo HotJobs. And companies will engage in “crowd sourcing.”
These are among the top predictions from a panel of experts for what human resources will be like in 2018. Overall, the nine thought leaders and HR executives surveyed by Workforce Management envision a quite different workplace and HR profession from those of today. In 2018, work will consist of transient teams made up of internal and external workers, HR officials will assume many more seats on corporate boards, and leaders increasingly will be held accountable for their talent management decisions.
And don’t be surprised if an HR executive becomes CEO of a Fortune 100 firm—our experts put the odds of that happening as high as 100 percent.
Of course, forecasting is always iffy. Workforce Management’s attempt to predict 2008 back in 1998, for example, had mixed results (see story on page 22). But we decided to try again, given the importance of preparing for and benefiting from workforce trends ahead. It also seems like a good time for constructing scenarios for the future, given the global economic upheaval that is forcing firms to wrestle with talent strategies.
Panelist Libby Sartain, former head of HR at Southwest Airlines and Yahoo, thinks the coming decade will differ from the past one when it comes to the pace of change in HR. In other words, hold on to your seats. “The last 10 years moved slower than I thought they would,” she said. “We will be moving faster.”
Creating the lists
Sartain was joined on the panel by other leading HR practitioners. They included Kevin Kelly, director of the people team for the Americas at professional services firm Ernst & Young, and Nandita Gurjar, vice president of human resources at India-based technology services company Infosys Technologies. Also participating were two HR executives from business software firm SAP: Terry Laudal, senior vice president of human resources for the Americas, Japan and the Asia Pacific region; and Virginia Clark, global head of learning and talent management.
In addition, our panel featured HR experts from the academic world: John Haggerty, managing director of executive education at Cornell University’s Center for Advanced Human Resource Studies; John Boudreau, business professor at the University of Southern California; and Dave Ulrich, business professor at the University of Michigan. Ulrich also participated in our prediction study a decade ago.
Rounding out the group of thought leaders was Susan Meisinger, who recently stepped down as CEO of the Society for Human Resource Management, the HR field’s largest professional organization.
This panel of experts helped us compile predictions in six workforce categories. We first asked participants to provide several predictions in each of the categories. Then we took the composite lists of predictions and fed them back to the panel members, asking them to rank their top 10 in each category. From those rankings, we calculated the top 10 predictions in each category.
The purpose of asking panel members to rank the composite lists was to arrive at something akin to a consensus. We instructed experts to keep in mind how realistic the predictions were as they ranked them, but to focus on the significance of the forecasts in shaping the HR field.
Not surprisingly, the experts didn’t always agree on what’s ahead. For example, one of Haggerty’s initial predictions was “substantially less business travel and fewer expatriate assignments.” But Meisinger said she expected “even more demand for leaders with global experience, creating more demand for ensuring key talent has expatriate experience.”
Haggerty also disagreed with Ulrich over the impact of Generation Y on the workplace. While Ulrich foresaw “Millennials redefining work” and blurring the boundaries of life and work, Haggerty forecast a minimal effect. “Gen Y issues will have had far less impact on business reality than predicted,” he wrote. “Talented people, willing to work very hard, will flourish in most organizational settings.”
Still, we found a fair amount of common ground among panelists.
Key forecasts
In the “Structure of Work” category, experts collectively pointed to collaboration as a key in 2018. The top-ranked prediction was: “There will be an increased focus on infrastructures—such as social networks and wikis—to support building strong relationships and collaboration.” The second-most popular choice predicted novel work arrangements: “The structure of work will become more adaptive, more informal and less focused on formal structure and static design solutions.”
Gurjar, of Infosys, envisions expanded use of virtual teams of employees who communicate extensively through videoconferencing, e-mail and text messaging. Gurjar said people are learning to work well together without much, if any, face-to-face interaction. At Infosys, workers text message despite sitting just a few feet away from one another. “Our communication is so highly dependent on e-mail or SMS [short messaging service, or texting],” she said. “Nobody talks on the phone anymore.”
Under the “Global Business” heading, panelists focused on making corporate principles clear to workers in all locations. “Companies will need to balance the need for a unified global culture with local strategic and cultural differences and make core global values locally relevant and easily understandable for all employees,” the top prediction stated.
The corporate social responsibility movement will grow stronger, experts said in the category of “Work and Society.” Their No. 1 prediction was: “Societies throughout the world will focus on work as a more important crucible for social progress and values. The memory of today’s financial crisis will leave a legacy of greater scrutiny and regulation of issues such as fairness, pay differentials and ethics, particularly in traditional Western economies.”
At the same time, decisions about hiring and training will be tied more carefully to the bottom line, panelists predicted. The top forecast in the field of “Recruiting and Workforce Development” was: “Recruitment and development will increasingly be seen as part of an integrated workforce-supply optimization process. Both will become virtual, global and just-in-time, but they will also be transformed through an increasing emphasis on optimization, differentiation and return on investment.”
Another top forecast in this category was that leadership development will be critical. SAP’s Clark sees a continued shift away from a pure “command and control” leadership style to a more “matrixed, collaborative” approach. This puts the onus on an organization to develop different types of capabilities in their leaders.
“I really think that leadership development is going to be one of the areas on top of the corporate agenda,” Clark said. Panelists suggested that HR executives will face tough scrutiny of the way they recruit, manage and retain people. The top prediction for the “Strategic Role of HR” was: “The strategic role of decisions about talent and how it is organized will increasingly be recognized as pivotal to sustainable strategic success. Leaders will be held accountable for the quality of those decisions.”
And the benefits world of the future will be customized and creative, with offerings that could include elder care, pet care and concierge services, according to the panel. “Companies will need to offer tailored benefits to meet diverse needs and attract talent,” the experts predicted in their top choice.
Other emerging trends
Apart from asking panel members to make and rank predictions in the six categories, we also asked several specific questions about HR a decade from now. Among these was how much a data-driven “decision science”—similar to the disciplines of finance or supply chain management—will emerge in HR by 2018.
USC’s Boudreau, who is among the leading voices calling for HR to develop a decision science, is optimistic. “A decision science for talent markets will advance significantly by 2018,” he said, “and will increasingly be seen as equally important for business leadership as finance, marketing and supply chain.”
Meisinger suggested some caveats. “Those that have a business degree as well as HR certification will be very comfortable with a decision-science approach,” she wrote. “It is much more likely to be present in larger companies than small, since smaller companies have fewer resources.”
Ulrich agreed there will be more data to crunch, but he also said, “It is hard to make a science out of talent and organizational issues.”
Panelists generally gave good odds that an HR executive will advance to become CEO of a Fortune 100 firm by 2018. Boudreau put the chances at 100 percent. Sartain also said it was likely. “With many HR people moving to operations or from operations and having strong business acumen, this will happen more often,” she said.
Asked what the most important workforce management issue will be in 10 years, Clark and Laudal said continued labor shortages, particularly in leadership positions. Gurjar cited the need for constant learning and updating of skills.
Haggerty predicted: “Talent management, same as 2008.”
Another thing he doesn’t see changing is what the profession calls itself. Terms such as “talent management” and “human capital management” have been bandied about, but Haggerty doesn’t see them sticking.
” ‘HR’ will still be the name,” he predicted. “Fads with fancy titles will fade.”
Kelly, of Ernst & Young, begged to differ. A 27-year veteran of the profession, he already sports an unusual title as director of people for North and South America, and Israel. Just as terms such as “personnel” and “employee relations” gave way to more modern labels, he expects the name “HR” will be “outdated and old-fashioned” in a decade.
After all, he said, the field is starting to race forward, thanks to such factors as globalization, increased attention to talent and a greater focus on inclusive workplaces. “In my last five years, the rate of change is greater than in the first 22,” he said.
A still faster pace is ahead, he predicted. “I wish it wasn’t so,” he said with a chuckle, “because I’m trying to catch my breath.”
Workforce Management, December 2008, p. 1, 18-23 — Subscribe Now!
The Rankings
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Workforce Management, December 15, 2008, p. 24 — Subscribe Now!