Three Rs dominated the HR world in 2016: recruitment, retention, and regulation. Although there were other important trends as well, experts say competition for good workers and the challenges created by new federal rules were at the top of most employers’ list when it came to HR topics.
The election of Donald Trump as president may or may not have an impact on some of those regulatory issues in the long run, but for now, it's probably safe to assume that workplace regulations won't be immediately changed.
Many top issues for HR specialists in 2016 were familiar: wellness programs, wearable technology, and the continuing growth of health savings accounts (HSAs), for example. But even familiar trends have developed new wrinkles and innovations. And some areas, such as attracting employees, have become more urgent, as the unemployment rate drops and it becomes more difficult to find quality workers.
Younger workers create a new world
The U.S. labor pool is changing. In the past three years, millennials surpassed both boomers and Gen Xers to become the largest age demographic in the workforce. According to Pew Research, 1 in 3 workers is now a millennial.
“In 2015, millennials became more than 50 percent of the workforce,” says Susan Heathfield, a management consultant and human resources expert at The Balance.com.
“The boomer population is exiting, and even if they stay in the workforce, the chances of them reporting to someone half their age are really high,” she adds. “It's creating big changes.”
According to Heathfield, the younger workforce is making demands for more flexibility, such as telework and career development opportunities. They also see the workplace differently than earlier generations. “They make friends at work, and their social life goes on in the workplace,” she says. “They want to get to know the families of the people they work with.”
HR officials used to talk about work/life balance. But with telework and other trends toward remote work options, officials have begun to use a new phrase: work/life integration.
“From where we were 10 or 15 years ago to today, it's a lot different,” says Tom Wimer, principal of OneDigital's Human Capital Solutions. “With the demand for more flexible schedules, the way that people work has changed. It's becoming more of a meritocracy — judge me on the work, not where I do it or how many hours I put into it.”
Julie Stich, director of research at the International Foundation of Employee Benefit Plans, notes this change has stretched the concept of the workday, with many doing work from home in the evenings and on weekends. “They’re doing personal stuff at work and getting work messages when they’re at home,” she says. “It all does blend together.”
Wimer says workplace interaction has changed dramatically. “The old weekly team meetings just don't happen much anymore. It's just not the way a lot of folks communicate anymore. We’re on a 24/7 communication cycle.”
“It's a brave new world in many ways,” says Heathfield. “And employers who do not adjust to this are not going to attract the best employees, because those employees know they can go somewhere else and get what they want.”
Employer brand and culture
With the blending of work and personal life comes higher expectations for the employer, experts note. Employers are not just expected to make money — they have to make a difference.
“Millennials say philanthropy is really important to them,” says Heathfield. “The employer brand has to stand for something. They have very high expectations for the workplace.”
Some in the HR world speak of a company “brand” that can help attract and retain workers; Wimer says he prefers to think of it as question of corporate culture. But either way, workers want employers to emphasize social responsibility. “This is a big item for companies that want to reflect a sense of social responsibility and a sense of community,” Wimer says.
Regulation: Two changes have employers scrambling
The two big regulatory issues that affected businesses in 2016 were the overtime rules and a new fiduciary rule, though both will see changes with the election of Republican Donald Trump to the White House. Much will depend on what the new administration chooses to make a priority. Some observers think the Trump administration will have bigger fish to fry (think repealing and replacing the Affordable Care Act), so it's possible these regulations will stay in place, at least for the short term.
The Department of Labor changes to overtime will result in overtime protections going to an additional 4.2 million workers, federal agencies have estimated. In addition, new rules on fiduciary responsibility would require brokers to certify they were working in the best interests of their clients.
The rule would cause companies to look closely at their employer-sponsored retirement plans to make sure all policies and agents were in compliance. Many think that although Trump has spoken against the rule, it will stay in place for the foreseeable future. “I can't imagine this is going to be on the top of his hit parade,” says Marcia Wagner, a lawyer with the Wagner Law Group, in a recent story on MarketWatch.
One thing that both Hillary Clinton and Donald Trump talked about during the campaign was paid maternal leave. Although it's too soon to know whether the federal government will mandate policies around family leave, many companies are already expanding their family leave and sick leave policies.
And some state and local governments have passed legislation in this area. “I think the proliferation of family medical leave legislation by state and local jurisdictions has become a big development in the last year,” Wick says.
Technology continues to open new possibilities
Continued innovation in online offerings and technologies were another trend HR experts watched in 2016.
Rodney Alvarez, who serves on the HR Disciplines panel for the Society of Human Resource Management, notes online benefits and services have exploded, which he says has been a great help with recruiting. He says the biggest trend he saw in 2016 was the use of online clinics, which allow employees to see a health care provider via Skype.
“It allows employees to have immediate service, without having to wait for an appointment, and it's open 24 hours a day,” he says. “We’re seeing a growing trend of those services in the past year.”
Alvarez say he has also seen other online benefits, often delivered via apps, such as family planning resources and help with student loans. “Especially with millennials, we’re seeing companies, instead of a 401(k), they make matching payments on a student loan,” he says. “For workers coming out of college with a huge debt, being able to find an employer who will do a match is fabulous. It's a really great recruiting tool.”
Wimer agrees there has been a lot more interest in online platforms for HR benefits. “We’re seeing a lot more employers, even small- and middle-market companies, looking to leverage technology solutions for their HR processes.”