In 2015, an improving economy wasn't enough to allay the concerns of business owners and HR professionals. Stagnant wages, continued high benefits costs and regulatory uncertainty combined to make both employers and employees skittish about the future.
But the underlying movement in the U.S. economy is toward growth, and HR professionals should prepare for the issues that have come with it: competition for workers, demand for flexible benefits, pressure for more productive and healthier workers, and technological innovations that will spur both innovation and new risks.
One of the top issues for HR departments in 2015 was employee recruitment and retention; and this will continue to be a challenge into 2016. HR regulatory compliance, including but not limited to the Patient Protection and Affordable Care Act, continues to be a concern for businesses. And the concept of wellness continues to evolve, with companies motivated to strive for a healthier and more productive workforce.
Let's look at these and other HR issues that are likely to be pressing concerns in 2016.
1. Competing for workers
Plenty of Americans are still looking for work, or looking for a better job. But employers are reporting that it's getting harder and harder to find quality job candidates, especially in high-demand areas such as technology and health care. But it's not just highly-educated workers who are hard to find.
“It's going beyond the traditional hot job sectors of tech and health care at this point. Truck driver might be a harder job to fill right now than software developer,” says Tim Sackett, an HR blogger and president of HRU Technical Resources. “I actually have hiring managers say to me, ‘Just find us people who will actually show up and work’ — and these are for professional jobs.”
“All of our labor market research shows that recruiting difficulties are at pre-recession levels and going beyond that now,” says Jennifer Schramm, manager of the workplace trends and forecasting program at the Society for Human Resource Management. Schramm says that although there was technically not a labor shortage in the U.S., a number of sectors are having trouble filling positions.
In response, companies are being forced to become more creative in recruitment efforts. Flexible work hours, expanded benefits, more vacation or medical leave options, ping-pong tables in the break room — anything and everything has been tried by employers scrambling to find, and keep, workers.
“Employers are trying different things to see what works for them; a lot of it depends on company culture,” says Julie Stich, director of research with the International Foundation of Employee Benefit Plans. “What works for Google or Netflix may not work for your company, but you should take a look to see what does work for your workforce.”
Experts say understanding your company's culture and brand is key to fine-tuning your recruitment efforts. If a company can articulate to potential employees what makes it different and what value that brings to workers, it is ahead of the game.
2. Generational issues
Directly related to the recruitment/retention issue is the problem of providing benefits to workers of different generations, who may have very different expectations and needs.
HR experts note that the younger generation expects more bells-and-whistles at a workplace, such as those ping-pong tables or cereal bars, but older workers are more likely to want financial counseling.
At the same time, Schramm warns that companies that try too hard to target benefits to older workers can run into trouble. Generally speaking, older employees often distrust programs that are focused primarily on them.
“They don't want to be singled out; they feel more vulnerable,” Schramm says. Instead, she says, companies should show that they support workers regardless of their age. “Our research shows the No. 1 job satisfaction factor across generations is respect for employees at all levels.”
Mentoring of younger workers by older, experienced employees is something that got a lot of discussion in 2015, but Sackett expresses skepticism about how much a company should expect from such programs.
“I don't know how much mentoring and/or transfer of knowledge is actually taking place. I think we want to believe this is happening, but it takes a special person to be a mentor,” he says. “The other part is young employees know everything — just ask them. Just like every single younger generation that ever entered the workforce. Turns out, almost every organization is awful at this, and most of us are just trying to make it work any way we can.”
One part of the HR equation that benefits workers of all ages is a wellness program. And employers continue to be very interested in offering such programs.
“A large number of organizations offer wellness programs,” Schramm says. “Our surveys show that 69 percent of our members offer them. And a lot of them say they’re increasing investments in wellness.”
And with an aging workforce nationwide, it makes sense to emphasize wellness to ensure both health and productivity among workers, Schramm adds.
Both Schramm and Stich agree that many companies are looking for better ways to measure return on investment on wellness programs, but that it might continue to be a tricky thing to quantify.
Stich also notes that the definition of wellness is expanding.
“We’re seeing an evolution here; it's becoming more about total employee well-being,” she says. “Not just focusing on physical wellness, but looking at things like mental health and financial wellness. Wellness programs continue to evolve, and employers are adding more and more components to their programs.”
4. Regulation and politics
There's at least one HR issue we’re likely to be hearing about during the 2016 presidential campaigns: paid family leave.
Both Democrats and Republicans are talking about the issue, and although Republicans seem much cooler toward the kind of nationwide program Democrats are pushing for, both Sen. Marco Rubio and new House Speaker Paul Ryan have made statements putting family leave on the political radar.
Paid family leave — providing paid leave for new parents or when an employee needs to care for a sick family member — is not a new concept; several states have implemented some type of paid family leave benefit. And paid medical leave is being pushed by worker groups who say it makes sense to provide the benefit, rather than force sick workers to come to the workplace while they may be both contagious and less productive. In addition, President Obama signed an order in September requiring federal contractors to provide one hour of paid sick leave for every 30 hours an employee works.
Stich says even without government mandates, such policies are becoming more popular with businesses, in part because it helps them compete for employees.
“It's something employers are looking at; something they can provide to make them an employer of choice,” she says.
Other areas in the regulatory realm that employers will be talking about in 2016 include the changes to the definition of overtime work as part of FLSA regulations, PPACA's Cadillac tax, and possible changes to regulations regarding contract or contingent workers.
“I think the rising percentage of contingent workers, as a total percent of our workforce, is going to cause further regulatory issues down the road,” Sackett says.
“The recession has led more companies to increase their percentage of contingent workers, and this won't go back down. This will definitely increase the pressure for further regulation amongst this job segment.”
5. Tech and personal data
The news that more than 22 million federal workers, along with family and friends, had their data hacked shocked not only the affected agencies but the business community, as well. A number of high-profile hacks on customer data has been costly for banks and retailers, and the prospect of employee data also being breached is yet another worry in an age where work is done on multiple digital platforms.
“With so many different systems and devices, it's really challenging to keep this data secure,” Schramm says.
In a 2014 survey of the IT industry, 63 percent of respondents reported that their organizations had experienced data breaches as the result of mobile security issues. The threat of data breaches, and how to protect companies and employees alike, will surely be another topic that bears watching in 2016.