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Obama's Impact on HR

The impressive victory of Sen. Barack Obama in the U.S. presidential election will usher in a new era of precisely what he promised: significant change.

November 21, 2008
Related Topics: Change Management, Benefit Design and Communication, Labor Relations

The impressive victory of Sen. Barack Obama in the U.S. presidential election will usher in a new era of precisely what he promised: significant change. His presidency, coupled with victories by Democrats in both national and state elections, means that changes are coming in our nation’s political direction. These won’t relate just to foreign policy and budget priorities; they will also significantly affect HR and the way organizations manage employees. You can decide on your own whether to view these changes as opportunities or threats, but in either case, you can’t ignore the fact that change is coming—and it is coming fast.

Changes in laws and regulations that affect HR are likely to come almost immediately for several reasons, the primary being that one party with a clear change agenda now controls two branches of the federal government, making new legislation and policy much easier to implement. In addition, should several Supreme Court seats become vacant during Obama’s first term, the replacement judges will most likely be more progressive than those vacating, adding to the political control of the nation by Democrats.

Another reason that change is coming fast relates to the honeymoon period that Congress traditionally gives newly elected presidents. Given the sense of urgency stemming from public outcry over the economy and the years of pent-up frustration among those who favor more protective employment laws, legislators will likely move quickly to pass popular legislation in an effort to stave off a balancing of power that might come during the next set of midterm elections. The speed of change will require HR professionals to closely monitor government deliberations and plan ahead in order to prepare their organizations for the new order.

One of the most likely areas of change will be diversity. Having an African-American president will almost certainly raise the level of discussion about diversity and inclusion in America. The heightened political discussion will likely carry over into corporate offices, where there will be increased scrutiny of diversity efforts and results.

This election brought an unprecedented volume of young people, minorities and women to the polls, which will likely reinvigorate discussions about how companies can engage such segments as well. More tolerant H-1B visa and immigration policies will also be high on the political agenda, so HR needs to expect not just legal changes, but also an increase in the percentage of the workforce that is foreign-born. Changes in the composition of the Equal Employment Opportunity Commission, as well as increases in its funding, will likely add legal clout to each of these discussions.

Another major impact is likely to be in the area of labor relations. Through the Employee Free Choice Act, which is likely to be passed, there will be efforts to make it easier for unions to organize and bargain. Shifts in the Supreme Court will likely make it more difficult to fire individuals and to win employment-related lawsuits.

Compensation and benefits can expect significant changes in several areas. Almost immediately, there is likely be pressure to raise the minimum wage and to increase employers’ responsibility for offering sick leave and a wider range of health benefits. Corporations may be asked to contribute more toward Social Security and retirement programs because of the impact of the recent downturn on 401(k) balances. Regulations making it easier to file equal-pay suits are also likely.

Taken together, these new laws and regulations will require HR to focus on adjusting its processes and policies to fit the changed regulatory environment. With all the change, there will be a great deal of uncertainty and few clear answers for HR professionals trying to comply with mandates.

The last but perhaps most important change that employees, executives and HR professionals should expect is optimism. Recent polls show that more than 75 percent of the population believes the country has been moving in the wrong direction. If Obama meets his promise to reach across the aisle, an era of cooperation and optimism may truly emerge. Confidence in politics could lead to increased consumer spending and a return to the innovation and productivity that American executives and workers have long been known for. Good times are ahead.

Workforce Management, November 17, 2008, p. 42 -- Subscribe Now!

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