Fast Forward 25 Trends That Will Change the Way You Do Business Today
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 dodemand is a clear sense of the landscape on the far horizon. As a humanresourcesexecutive, you probably know what health care will cost your company nextyear.
But you're far less certain whether or not legions of workers will befull-time telecommuters five years from now, or if defined benefits will evenexist in 2013. Fortunately, there are forward-thinkers and trend-spotters outthere who make it their business to suss out thefuture for us.
Our visionaries don't always agree with each other, as you'llsee. Still, their predictions of what factors will alter the world of workforcemanagement are provocative, and may serve to inform and intrigue all of us whomanage people.
It has taken less than a decade for electronic mail to emerge as the heartand soul of corporate communication. Yet while e-mail has made it faster andeasier for people to swap words and data, it also has unleashed inbox overloadand a seemingly endless stream of spam. Future e-mail systems will attempt toremedy today's problems--but also add new capabilities.
One possibility is that senders will have to match a predetermined list--eitherby name, company, or IP (Internet provider) address--or find themselvesblocked. In addition, better anti-spam programs will help sift out the junk.
Powerful information-management and collaboration tools are also likely toemerge. They will link associated messages and track message streams moreefficiently. Internet pioneer Vinton Cerf predicts that automatic languagetranslation will take hold. Finally, unified messaging will allow workers tocheck e-mail, voice mail, mobile messaging, and fax machine from a single inbox.
Despite declining membership and overwhelming odds, labor unions aren't indanger of dying any time soon. They do, however, face the future with these grimfacts: Membership dropped from 20.1 percent of the labor force in 1983 to 13.2percent in 2002. The decline in U.S. manufacturing cost union members 1.5million jobs in the 1990s. The Bush administration has eliminated collectivebargaining rights for large numbers of federal employees.
Still, more than 500,000 workers formed new unions last year. Union membersmake on average $150 a week more than non-union workers. Pharmacists andphysicians, faced with alarming shifts in the medical marketplace, will joinunions in growing numbers in the coming years.
But to retain their power, unions must reverse the shrinkage, experts say."Unions have been doing a better job than ever," says Kate Bronfenbrenner,director of Labor Education Research at Cornell University. "It's just thatthe bar is a lot higher."
|3||Business Goes to Kindergarten|
All signs indicate that corporate involvement in public schools--alreadyredefining kindergarten-through-high-school education--will continue toincrease over the next decade. Alarmed by under performing public schools andstudents poorly equipped for the job market, business is getting directlyinvolved. Corporate sponsors are popping up on campuses from Washington, D.C.,to Stockton, California, as a new generation of students prepares for college,and for jobs such as auto mechanics, Internet specialists, and hotel workers.School-to-business field trips start in kindergarten. Internships, meetings withtop executives in office settings, and even paychecks are available for olderstudents.
"We're saying, 'See, there is a reason to go to school,'" saysKnute Momberg, director of Stockton's Weber Institute of Applied Sciences andTechnology. The school has more computers than students, and GM provided the newcars that teens take apart in squeaky-clean service bays.
In Europe, snooping at employees' e-mail isn't only considered bad form.It's often flat-out illegal. And as American companies increasingly enjoytheir reputations as global trendsetters in business practices, they may have toreverse some key employee policies, says Andy Boling, a partner andemployment-law expert in the Chicago-based law firm Baker & McKenzie.
Oneobvious area is workplace privacy, where U.S. companies may be compelled toreduce their monitoring of e-mail and Internet use. "Multinationals are finding that it's toocumbersome to have one set of privacy policies for Europe, another for Hong Kongand Australia, and a third standard for the United States," he says. WithU.S.-based employees communicating increasingly via e-mail with their Europeancounterparts, Americans also will begin to covet their liberal vacation policiesand parental-leave benefits. "These things may not be implemented here to theextent of the privacy regulations," Boling says, "but American workers andorganized labor may increasingly look to Europe as the standard."
|5||Companies Won't Sleep|
In a quest to reach new customers in foreign time zones and to speed upproduction and services, more and more companies in the future will be open forbusiness around the clock, seven days a week. Already about 24 million Americanswork in the 24/7 culture, accordingto Circadian Technologies, a Massachusetts-based consulting firm. While the24/7 worker used to be an assembly-line worker, today he or she may well be a college-educated computer-tech-support specialistworking nights in San Francisco, providing Japanese-language advice to acustomer who calls from Tokyo during his lunch hour.
The migration to a 24/7workplace will make human resources managers' jobs far more complex, saysDavid Mitchell, Circadian's director of publications. "You may have to offernighttime child-care providers, who watch kids while they sleep," he says. "Andyou may have to be much more creative in terms of scheduling--for example, ifyou're running a call center for a retailer, you may have to have more staffon hand right after the 2:30 a.m. infomercial." Employers also will have atrickier time dealing with disability claims, since some mental healthconditions may be exacerbated by a shift to nighttime work.
Making computers think more like people is an idea that persists. In theworkplace, software already predicts customer behavior and machine failures onthe factory floor. These capabilities will continue to evolve. As the Web anddata warehouses grow, artificial intelligence will solve problems that arebeyond the reach of the human brain.
AI's strength is that it can uncover patterns and spot problems amid amountain of data. That might translate into detecting financial fraud byexamining billions of transactions, says Pepperdine University businessprofessor Owen P. Hall Jr. Meanwhile, agents and bots--tiny pieces of software--willuse real-time data to make decisions about how to maximize the efficiency oftrucking fleets, machinery, and network resources.
"AI will bring advances but also usher in ethical concerns," Hall says.
|7||The Simmering Malaise|
For several years, employees have had a very tough time. They've lived withthe fear of downsizing. They've watched benefits and retirement savingsshrink. And they've been forced to work harder and longer, with feweropportunities for promotions or raises. Even when the economy eventuallyrecovers, experts say, pervasive dissatisfaction and anger aren't likely toevaporate.
Only 25 percent of workers feel a strong attachment to theiremployers, and 4 in 10 feel trapped in their jobs, according to WalkerInformation, an Indianapolis-based research firm. Walker vice president MarcDrizin says employee loyalty was on the decline even before the economy stalled,and that pattern is likely to continue. "I think most organizations still don'tunderstand why you need to be good to your workers," he says. Employers whoignore workplace discontent run the risk of periodic productivity slumps asskilled staffers depart for higher-paying positions whenever the labor marketsurges. Smart companies that make employees feel valued will gain a crucialcompetitive edge.
In the coming years, most cubicle-dwelling employees probably won't have aroom--or a door--of their own. There is an office movement toward more sharedwork space coupled with private desk areas, especially in creative industries,says Gervais Tompkin, a lead designer with the San Francisco-based WorkplacePractices Group at Gensler Architecture, Design and Planning Worldwide.
What's more, workforce managers will play a key role in office design,serving as a critical link between the personal and professional needs ofworkers and the vision of architects, he says. "When we analyze what makes ourbest designs successful and keeps those clients coming back to us, it is theactive involvement of human resources managers early on in the process,"Tompkin says.
He isn't prepared to predict the demise of doorless cubicle kingdoms, butsays that he is seeing changes. "I personally could never operate with aclosed door because people need to interrupt me at will since our work is socollaborative. Lawyers, on the other hand, will always need a way to shut outthe world because their work is by nature mostly one-on-one."
|9||Defined Benefit Plans|
Attracting the best and brightest employees in the future will become nearly impossible without a defined benefit plan. Stewart Lawrence, asenior vice president of The Segal Company in New York, predicts that companieswithout retirement plans that provide guaranteed benefits will be passed overfor employers that do. "Employees now understand the volatility of definedcontribution plans and are looking for a balanced program with both the upsidepotential of a defined contribution plan and the mitigation of downside risk ofa defined benefit plan," he says.
Major employers such as Microsoft, Wal-Mart, and Cisco Systems currently don'toffer defined benefit plans because they have been able in recent years torecruit effectively without them. This will no longer be true. As the workforceages and labor shortages increase, Lawrence says, companies will have to offerretirement plans that provide a floor level of retirement income.
|10||Telework Has a Part-Time Future|
By the year 2010, more than half of American wage earners will spend morethan two days a week working outside the office, reports the SulzerInfrastructure Services firm in London. Today, 28 million people "telework"under formal company policies--a leap from 4 million in 1990--and millionsmore work informally out of the office one or more days a week. As inexpensivebroadband Internet access and mobile technologies take hold, the number willincrease, says Toni Kistner, managing editor of Net.Worker, a division ofNetwork World magazine. "The technology has steamrolled ahead, making itcheaper and easier to work from anywhere."
It will be rare even 10 years from now, however, to find people in anyprofession who telework five days a week. When teleworking took off in the1990s, people talked about how the workforce would be dispersed and officeswould shut down. That hasn't happened, Kistner says. As the economy improves,companies may reduce their real estate, encouraging employees to share offices.That will create open work spaces that accommodate a flexible part-time teleworkenvironment. But there will always be a central location where people come towork, she says. "Some people need to come to the office to stay connected."
In professional jobs, teleworking is already common. With technologicalupgrades and guidance, the trend soon will take hold in fields such as nursingand call-center management. New kinds of work that combine technology andservice also will be more feasible as technology improves, says Sirkka Heinonen,senior research scientist at VTT Communities, the biggest technological researchcenter of the Finnish government. As the number of senior citizens in theindustrial world rises, for example, many will want to live at home as long asthey can. "Some kind of telework service providers to monitor these people athome will likely grow up around this need," she predicts. "These won't betraditional nurses, who are always on-site, but they will be telepresent andwill probably visit [patients] physically from time to time."
|11||Consumer-Driven Health Care Reigns|
Despite exploratory moves toward consumer-driven health care, most Americancompanies aren't exactly blasting into this new benefit area--not quite yet.Ten years from now, however, the notion of health-care dollars that employeescan spend as they see fit will be routine, say benefits experts.
Consumer-driven plans take many forms. All aredesigned to make employees more aware of, and responsible for, the costconsequences of their health-care choices. Roger Vaughn, president of AonConsulting U.S., says that employees will benefit from the hard bargains thatemployers drive with health-care providers, so they won't have to bear theexpense of buying health care on the open market. And thanks to the Internet anda push for greater openness about corporate finances, employees will be able tosee exactly what health care will cost them, and they'll also be able to makecomparisons to other plans, Vaughn says.
The other critical pieces for the success of consumer-driven programs are "education,advocacy, and assistance," says Richard A. Travers, CEO of Travers, O'keefe,a New York-based benefits consulting and brokerage firm. Those elements aren'tentirely present yet, but five years from now they will be, and "we'll bewell on our way," he says.
Child care is and will continue to be a major, often heartrending subject forworking parents. As the national workforce ages and the number of women ofchildbearing age levels off in the next five years, the demand for child caremay lessen. But access to quality child care will continue to be a major issuefor working moms and their employers.
Susan Seitel, president of Work & Family Connection, Inc., aMinnesota-based consulting firm, says one of the major problems for workingparents is what to do when the babysitter is sick or doesn't show up, or theregular preschool is closed for a holiday or vacation break. She expects that anincreasing number of companies will offer backup-care arrangements thatemployees can use in the event of emergencies. "Employees often are willing topay a fee for the care, so all the company may have to provide is the space,"Seitel says. A related trend may be the rise of contractors that provideinnovative activities for company-sponsored day care, such as theater classesfor kids, she says.
|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 workersto fill them by 2010, experts predict. The math is relatively simple. Thecivilian 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 ofjobs will reach 168 million.
Roger Herman, a futurist specializing in workplace issues, says pressure onbaby boomers wanting to retire will be so great that they will be pulled backinto the labor market. Even so, he says, older workers won't show up in largeenough numbers to fill the millions of jobs available. Herman says the problemwill be aggravated by the shortage of skilled, educated workers alreadyoccurring in manufacturing, health care, and various technical fields.
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 significantlyaltering people management. Companies spent $61.2 billion worldwide in 2002 onhuman resources management outsourcing, an amount expected to jump 11 percentannually, to $103.3 billion by 2007.
Growing even faster will be in the one-stop shopping market, where companiesbundle different human resources management services into one large contractrather than serving it up piecemeal. Industry analyst Marc Pramuk of IDC inFramingham, Massachusetts, says U.S. companies packaging end-to-end services did$6 billion of business in 2002. That business will more than double in fiveyears, to $15.4 billion, a 21 percent annual growth rate, he says.
Newer companies like Exult, a late-1990s start-up that is enjoying phenomenalgrowth, will battle it out for this business with older, established companieslike Fidelity Investments, which has gone beyond its mutual fund and 401(k)business into human resources administration. A sample of things to come: Partof a broad deal with IBM called for the transfer of 700 IBM human resourcesemployees into a Fidelity employer-services company.
|15||Recruiting Older Workers|
With the graying of the workforce, American business is going to have to payattention to what older workers want and how to recruit them, says DeborahRussell, manager of Economic Security and Work at the American Association ofRetired 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 agediversity such as "experienced workers" and "age-diverse."
A recent AARP-sponsored study, using a nationally representative sample of1,500 workers age 45 to 74, shows that 69 percent plan to work in some capacityduring their retirement years. They work not only for money but also forintangible benefits such as enjoyment and a sense of purpose. Poll participantsfocused on "soft benefits" such as adequate time off and flexible schedulesas well as "hard benefits," including health-care benefits and insurance andgood pension benefits as "absolutely essential parts of their ideal jobs."
Mergers and acquisitions are like courtships and marriages, says Ira Wolfe, aLeola, Pennsylvania, workforce consultant. Like human couples, companies "fallin 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 incorporate mergers. Wolfe estimates that company purchases conducted for thepurpose of buying another company's people could represent as many as half ofall acquisitions. Now, he estimates, only about 15 to 20 percent of acquisitionsare completed because one organization wants another company's workforce.
One of the principal reasons why mergers and acquisitions have failed in thepast is that workforce management isn't brought into negotiations until thedeal is consummated. No one studies the compatibility of the two cultures. Worseyet, the buyer often tries to change its partner, rather than adopting the waysof working that made the acquiree attractive in the first place.
|17||Freelancers and Consultants|
Today, some 30 million Americans are self-employed, and with companiesincreasingly enamored of outsourcing as a way to control costs and increaseflexibility, the use of freelance contractors and consultants is likely to grow.Dan Pink, author of the 2001 book Free Agent Nation, predicts that corporateworkplaces will evolve into a continually shifting mix of employees andfreelancers, "to the point where it will become difficult to distinguish onefrom the other."
That may lead to profound changes. Company health plans may begin todisappear, as workers on the move opt for their own portable health coverage,possibly subsidized byan employer. "Companies may not be hiring people for jobs," Pink says."Instead, they may be saying, 'We definitely want this person around for 10years to accomplish these particular tasks, and after that, we'll see.'"The concepts of retention and career development, he says, may be supplanted byan emphasis on maintaining long-term connections to workers who manage their ownrise, 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 employerswill soon turn to the concept of wellness management--with a twist. They'llgive 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 preserveprivacy and HIPAA compliance, begins by having employees and their coveredspouses take a voluntary health-risk appraisal each year. These questionnairesidentify 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 medicalexpenses, Lerche says. If the appraisal identifies two or more risk factors thatpoint to a potential health problem, the employee or spouse is a candidate forhealth coaching with a nurse, health educator, dietitian, or exercisephysiologist. The coach sets up a plan for the health risk and keeps track ofthe employee's progress via weekly phone calls. The incentive for the employeeis a reduction in insurance premium payments--$55 instead of $75 per month, forinstance, Lerche says. And if the employee stops participating, the insurancediscount can be suspended until he gets back on track.
"Too much of what we do is a short-term approach," he says. "Fiftypercent of disease is ultimately preventable," and this approach can head offmany major health problems.
"It's for the employer that has low turnover, wants to invest inemployees, 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 debtand worried about personal safety and job security--especially since 9/11 andthe economic downturn, says Harriet Hankin, president of CGI Consulting inMalvern, Pennsylvania. And those are some of the reasons they're increasinglylooking for spiritual comfort, she says. "The biggest change in the workplaceis the interest in spirituality. It's about doing the right thing. It's notabout religion. It's about job satisfaction. Jobs in the future will have tobe more meaningful. Pay won't be as important as a good job."
Referring to the rising number of books on spirituality and business and insubjects such as work/life balance, Jeffrey Pfeffer, professor of organizationalbehavior at the Graduate School of Business at Stanford University, says he'dagree that spirituality in the workplace is a noteworthy trend. Workers arelooking for meaning and purpose, he says. "The word 'spirit' comes fromthe word 'to breathe.'"
|20||Women at Work|
With steeply mounting numbers of educated women, glass ceilings are going toshatter in the coming years, says John A. Challenger, CEO of internationaloutplacement firm Challenger, Gray & Christmas, Inc. Between 1979 and 1999,the number of women earning four-year college degrees jumped 44 percent, from444,000 to 640,000, he says. At the same time, the number of men receivingfour-year degrees is declining--from 532,000 in 1993 to about half a million in1999.
As women earn more college degrees and ascend more corporate ladders,Challenger says, they "will make further inroads into management and execranks, and the workforce will have to create an environment where a balancebetween work and home life is more valued. Temporary and part-time work and jobsharing will be more common." There also will be more re-entry opportunitiesfor 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" likenursing and teaching, Challenger adds. The result won't be that women arecrowded out of the job market. "The major change will be this: The linebetween men's and women's work will blur and fade."
A job-skills shortage is already reality in the manufacturing industry, andis likely to spread to other industries over the next 10 to 15 years as babyboomers retire. Despite a recession that cost 2 million manufacturing jobs, arecent study by the National Association of Manufacturers warns that "manufacturingcould experience a shift from merely having a talent shortage to facing aserious labor crisis."
That's just manufacturing. Warnings also are forecast about the need forsavvy, well-trained workers in job categories such as information technology andthe global-energy and electrical-utility industries. Shortages are expected inthe global competition for managers, engineers, technicians, skilledcraftspeople, and front-line workers, mostly jobs requiring a college degree ortechnical education. Experts say changes must come on a broad front, from bettertechnology and skills training in secondary schools to aggressive recruitment toa coordinated national workforce policy.
|22||Security vs Privacy|
As technology becomes more sophisticated, the ability of those who administercompany--and government--computer networks to monitor the comings and goingsof workers will grow exponentially. While privacy experts shudder, cameras,keystroke logging, biometric devices, and network monitoring are becoming derigueur within many organizations.
In the future, the cat-and-mouse war between businesses and crooks will leadto more sophisticated surveillance, the standard use of data encryption, andsophisticated data-mining techniques that spot potential problems and risks byanalyzing patterns. "Increasingly, companies are realizing that security isnot an option, it's a basic requirement," says Alan Brill, senior managingdirector 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 siftthrough vast quantities of business and government data to detect suspiciousactivity. "The dangers are greater than ever," Brill says. "It's clearwe're living in a new era."
|23||Accounting for People|
Let's say you took up the hobby of collecting every annual report frompublic companies over the last 40 years. You'd be shocked at how little you'dlearn about what organizations often say are their "most important assets"--theirpeople.
A few--like the Atlanta Braves, EDS, and Deutsche Bank--have gone out oftheir way to tell people what their workforces are worth or how much value theirtraining will bring in the long run. In the years to come, however, humanresources 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'syour ability to think through complex problems, serve the customers better, andbe more creative." All these qualities come down to the capabilities of humanbeings, he says. Wall Street analysts will want to see what corporations knowabout 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 howvulnerable those "important assets" are. Machines stay put, but as Flannerysays, "People can walk at any time."
|24||Universal Health Care|
As costs soar and the number of uninsured Americans--both employed andunemployed--rapidly expands, there are about as many predictions about wherehealth care is headed as Carter's little pills. Employers are paying anincreasingly large share of the cost--and so are employees. And almost everyoneacknowledges that some dramatic change in health care is likely, perhaps eveninevitable, in the next decade.
The country is indeed moving toward some form of universal health caresystem, says Jeffrey Pfeffer, professor of organizational behavior in theGraduate School of Business at Stanford University. He points out that theUnited States is the only industrialized country where access to health care isdependent on employment. Says Pfeffer, "In other countries, access to healthcare is a fundamental human right."
|25||The End of HR As We Know It|
Conventional wisdom says that human resourcesfinally has achieved its sought-after seat at the table. But the ability ofhuman resources to add value at a strategic level "is currently more promisethan reality." That's the sobering finding of Creating a StrategicHuman Resources Organization (Stanford Business Books, 2003), a long-termstudy of human resources by Edward E. Lawler III and Susan Albers Mohrman.
The authors found that today's people managers still are most comfortablewith traditional human resources activities. "If they want to be effectivebusiness partners, they need to change their skill set," Lawler and Mohrmansay. Almost 30 percent of the companies in the study promote human resourcesexecutives who come from the business side, not human resources.
"In essence, some companies may have decided that the HR strategic-partnerrole is too important to leave to someone with an HR background." The study'sconclusion: Human resources must reinvent itself. "The old approaches andmodels simply are not good enough."
Workforce, June 2003, pp. 43-56 -- Subscribe Now!