“Average is over,” according to Tom Friedman and the pace of change is accelerating. These trends spell both doom and opportunity to the world of human resources. Beneath the cloud of these megatrends lies a groundswell of trends likely to change the way companies hire, manage, and motivate employees.
What are these trends that will pop-up during the year that will disrupt and potentially derail many company strategic and business plans? What do these trends mean for companies that plan to grow with more skilled workers.
#1 – Skills gaps will widen and worsen. Increasing productivity is the key to remaining competitive. As a result, the competition for workers with the right skills and temperament will increase dramatically.
#2 – Skilled worker wages will rise. The price to attract and retain a skilled worker will rise. In some industries and/or geographies the increases may be substantial. Wages for the “typical” worker with average- or low-skills will continue to stagnate – unless of course it is artificially propped up by minimum wage legislation.
#3 – Flying by the seat of your HR pants is dead. HR analytics if available at all has been abysmal. Traditional means of recruiting, screening, and selection are becoming increasingly ineffective. Hunches and gut instinct have no place in talent management. The need to manage talent with the scrutiny and precision companies use for cash flow, inventory, logistics, and supply chain is here and now.
#4 – Source wider and mine deeper. To find talent companies will need to throw out a wide net. That means the quantity of applicants will increase. The diamond in the rough will be buried deeper. Recruiters will need to mine more data faster and more accurately, requiring the use of technology.
#5 – One HR hat does not fill all. Managing compensation, benefits, and compliance is overwhelming. Recruiting and retention becomes an after-thought. Like most other jobs, the skill requirements for HR positions are changing. The sooner those companies realize that sourcing, recruiting, selection, and retention require specialized skills and dedicated responsibilities, the more effectively they will compete in the war for talent.
#6 – The employee turnover door will revolve faster. With rising demand comes increased employee turnover. A recent ADP report revealed that turnover is on the rise. But so far the change has been largely industry and/or geography specific. Turnover is not universal – yet. But that should not lull companies into complacency. The competition for key skilled workers is just heating up. With wage growth for a worker who changes jobs nearly 500 percent more than those who stay (ADP Workforce Vitality Index 2014), companies will need to improve employee engagement significantly and compensate competitively and aggressively.
#7 – Company-led training and development is overdue. As business models evolve and get cannibalized by new technologies, employees need to stay employable and job ready. Waiting for the government and academia to fix the skills gap is foolish. As the comedian Ron White says, “you can’t fix stupid.” Re-skilling America won’t happen over-night. For the time being, companies that expect to have an ample supply of skilled workers need to provide the training and resources to upgrade skills and the opportunity to re-train for new jobs.