Top 10 HR Trends in 2009

2009-01-07T19:22:00.000-08:00

Today I spoke at the Houston Non-Profit HR Leaders Forum about the most significant human resources trends for 2009. In my research I found more than ten HR trends! So, I’ve done the work for you and selected what I believe are the trends that are most significant.

No doubt about it, it’s going to be a challenging year. Why do I say that? Well, it’s not a secret, is it? The only constant in business today is change. Non-profit leaders are faced with an increasingly competitive environment coupled with a growing need for services. Given the downturn in the economy, many are worried that there will be a drop in funding as companies and individuals scale back on charitable giving. There is escalating pressure to do more with less: to maximize resources, lower costs and meet the needs of a diverse stakeholder group. In this environment, whether you’re a non-profit or a for-profit organization, it’s essential to have a sound strategy to survive and prosper.

ACTION: Identify the ONE idea or application you can use to leverage your organization’s human capital programs this year that you believe will have the greatest impact. A participant in the group today suggested that this list could be used to open a dialogue with your leadership team and to build the business case for implementing your ONE idea or application.

If you implement your ONE idea or application, you can win $1,000. The Society for Human Resource Management (SHRM) has announced it will grant an Economic Stimulus Prize to each of ten SHRM members who send them the best examples of programs or strategies they and their HR departments are implementing in response to the current economic conditions. CLICK HERE for details.

Drum roll please .... here are the TOP TEN HR TRENDS FOR 2009:

1. Smart HR pros will help their organizations weather the economic storm.

In economic times like this, there is a high level of stress. As an HR leader, you are trying your best to make sure there is equity in the financial decisions that are being made around employee benefits and compensation decisions. You believe that training and development is important and even more so in a downturn as employees need to hone their skills to perform at the highest level. You have insight as an HR leader about labor market trends and the impact of a troubled economy on ordinary employees. These challenges appear to be having an influence on workplace policies and HR strategies.

In 2009, HR will add tremendous value to the organization, but not in the areas they desire. Your leaders will turn to you to tackle some of the most difficult challenges like communicating there won’t be raises this year or deciding what jobs need to be eliminated. They will count on your discretion, your ability to navigate tricky waters and keep them out of trouble, and to do so without complaining. Your training and experience will come in handy and you will perform well. But it’s possible that this is not what you hoped to be doing in you HR career. Your biggest challenge in 2009 is to figure out a way to be transformative while being transactional!

Do you believe that for many of you this will be your last year in HR? The human capital challenges for 2009 will test you. You will be called on to make the hard decisions and support leadership in executing its plan. And in some cases, you may be the last one to turn out the lights. Ultimately you may question the meaning of it all. Sometimes it’s a burden to be “in the know”. Who will you turn to? How will you create a supportive environment to weather these hard times? It’s even more important now to tap into your peer network and promise to support each other.

2. It’s a buyer’s market – hire key talent now: tap into encore workers who are choosing to work for non-profits. Hire Gen Y college graduates and energize your team.

There is great opportunity in this climate. This is the time to pull your resources together and decide what is most important to focus on. The community needs your organization’s resources more than ever. How will you deliver these resources? Did you know that the non-profit sector is growing faster than business or government – and facing talent shortages? According to the Urban Institute’s 2008 Non Profit Almanac, there are at least 1.4 million non-profits in the U.S. accounting for 10% of U.S. employment. According to a recent national survey completed by the MetLife Foundation and Civic Ventures, more than 42% of non-profit employers see recruiting and hiring talent as a top HR concern, and only 9% expect it will get easier to find the talent they need.

A key trend for non-profits to take advantage of is to hire Boomer and Gen Y talent. We have two large “bookend” groups of people available to work for (or who are in need of services from) the social sector. At one end are the "un-retired" Boomers (age 44 to 70). They will change the nature of our communities as more and more of them have to stay in or return to the workforce. According to the MetLife Foundation and Civic Ventures survey, between 5.3 and 8.4 million Americans have launched an encore career: jobs that combine personal meaning, social impact and continued income. Of those Boomer workers who are not already in an encore career, half are interested in them, specifically jobs in education, healthcare and the non-profit sector.

Nearly 69% of non-profit employers rate the valuable experience encore workers bring to the job as a significant benefit, and 67% say the same about encore workers’ commitment and reliability. Some employers expressed “serious concerns” that encore workers could demand higher salaries (25%), be reluctant to learn new technology (23%), lack technical/ professional skills (20%) and could have higher insurance/ benefit costs (19%). No matter what you believe, now is the time to find top talent for your non-profit organization and put them to work!

At the other end of the age spectrum are members of Generation Y. For Gen Y (age 26 and under) their core values encompass optimism, civic duty, and sociability. They want to know that the organization they are working for is making a positive impact on society. They are likely to be interested in yours. And they are still in or graduated from college! Do you need an intern? Let your local campuses know. What about hiring a college graduate to “learn the ropes” in your organization? Gen Y is facing a tough corporate job market and may want to hear what you have to offer. Real brainpower from young people, new college graduates and all those business schools teaching social entrepreneurship will energize social and community organizations. The millions of first-time voters from the 2008 election and the boundless energy of teenagers will bring a mass of lowest-cost, tech-dependent, temporary, "get something done"-oriented actions.

3. Join the HR 2.0 community: Don’t be left out!

How will you find talent and support your organization’s key strategies? It’s time to join the Web 2.0 revolution, let’s call it HR 2.0! HR professionals need to seek more creative means of information gathering and networking. Communication is viral today, with people forwarding messages, links, and more. Many of you are participating in on-line HR communities like Linked In, Facebook and Twitter. And you may be a member of a professional organization, most likely HR Houston and/or SHRM. These organizations are great resources for best practice sharing and networking.

Peer networking will be critical for sustaining knowledge sharing. And, these on-line communities also offer new ways to tap into top talent in an inexpensive, collaborative way. I would encourage you to learn about social networking and how you can leverage on-line tools to tap into low cost options for recruiting, research and peer-to-peer networking.

4. Invest in training and development. Create a retention strategy through retraining workers.

It’s easy in these tough economic times to stop investing in training and development of your employees. Yet, it’s more critical now to do so. Today there is a surplus of individuals available to work. Unfortunately many of them do not have the necessary skills that the market requires. This skill shortage means that individuals will remain on unemployment longer than they have in the past. This skill shortage will at the same time bid up the price and the competition for the remaining available well-trained workers in key positions.

To individual organizations, this means that the only alternative to offshoring most new high-skilled jobs will be the development of effective retraining programs that can rapidly and cost-effectively upgrade the skills of the unemployed.

Unfortunately, retraining a large number of entry-level workers is not an area that most organizations either excel at or want to invest in. For the first time in memory, a successful rebounding economy as a result of the government’s efforts might not be followed by an increase in the number of skilled jobs held by U.S. workers. Though we may first see in increase in productivity, the jobs segment might stagnate for a significant period of time. Take advantage of the opportunity to train workers and create a competitive advantage. Help build the business through a focus on current employees and invest in your human capital to engage, encourage and empower people.

5. Employers are taking steps to trim health care costs. What can you do?

After double digit yearly growth rates in employers’ health benefit costs in the first half of the decade, the percentages dropped to single digits three years ago and have remained there. Preliminary survey findings released by Mercer indicate costs will rise by 5.7% in 2009, the lowest rate of increase in more than 10 years.

The decline is due mostly to the fact that employers are taking steps to trim health costs. Unfortunately, this means they are passing increased costs on to employees. 59% of employers intend to increase deductibles, co-payments, co-insurance or employees’ out-of-pocket spending limits. If employers renew their current health plan and make no changes, projected 2009 health cost increases would be nearly 8%. For employers with 10 to 499 employees, the increase would be closer to 10%.

Non-profit organizations made significant changes in their healthcare plans several years ago. In an October 2004 study completed by The Johns Hopkins Center for Civil Society Studies (“The Health Benefits Squeeze: Implications for Non-profit Organizations and Those They Serve”), soaring costs of health care benefits caused non-profit organizations to eliminate raises, increase employees' share of health care costs, and cut other benefits. Of the organizations surveyed, nearly 63% reported health benefit cost increases of 11% or more; an additional 15% reported increases in excess of 20%. More than 60% of organizations implemented cost-cutting measures.

According to the study, the implications of these escalating costs are especially worrisome for non-profits because their human resource benefits have always been one of their most attractive employment incentives. 93% of non-profit organizations with 10-19 full-time employees provide health insurance coverage to employees, compared to 74% of similarly sized for-profit companies.

The question to ask yourself is how can you use your benefits program to fulfill a strategic purpose? A clear human capital strategy will drive your decisions around benefits and make it easier to communicate the cost/benefit to your leadership team.

6. It pays to invest in employees’ health! Large U.S. employers increase wellness incentives by 9% from 2007 to 2008

More and more organizations are adding wellness programs to their employee benefits plan as a way to encourage employees to change behaviors to improve their overall health thereby reducing the cost of health benefits for employers. Smoke cessation, weight loss, and physical fitness programs are becoming the norm, as are incentives for preventative care.

If your organization hasn’t jumped on the “wellness band wagon”, it’s time to take a look. Here’s what you need to know before implementing a wellness program:

• Maintaining employee morale and gaining buy-in means ensuring the program is not a way to save money at the employees’ expense. Wellness programs need to meet legal requirements and should not offend people.

• These programs need to be voluntary as you may start to get in trouble by making them mandatory.

• If you provide a lower premium to non-smokers, make sure you know how you will handle employees you discover lied about their smoking status. Employees need to know these repercussions when they fill out their forms.

• Know the privacy requirements of HIPPA and adhere to them.

• Offer an alternative. For example, if you reduce the premium for non-smokers, offer a smoking cessation program that helps smokers quit so they can take advantage of the lower premium.

• Watch for changes in the legal and regulatory environment. As more and more organizations implement wellness programs, we will see whether employees challenge them and learn what the courts have to say.

7. Hey, Who Stole my 401k Match? Is your decision to suspend the match a strategic one?

It’s happened before. An employer match to 401(k) contributions is neither required nor permanent. An employer can change or eliminate the match at any time. Most plans document the fact that their match as “discretionary” and this is allows them to make the decision as it comes up. Most employers make the decision to provide a match “based on company performance”. As we know, company performance is negatively impacted by a downturn in the economy. So, for 2008, some companies are cutting back: Federal Express, General Motors, Dollar Thrifty Automotive Group, Frontier Airlines and real estate giant Cushman & Wakefield are among those suspending their match programs.

Not to despair. Historically we have seen organizations reverse this decision as the economy and organizational performance have improved. The question is how will employees respond to this news? It's definitely not a pension, but for tens of millions of people, a matching contribution into a 401(k) account is as good as it gets. A typical 401(k) plan might have the employer matching employee contributions dollar for dollar up to 4 percent or 5 percent of an employee's salary. Many employees are saying that they’d “rather have their job and healthcare benefits than a 401(k) match.” The problem is, because so many organizations don’t offer a pension plan, and workers don’t stay around long enough to earn a pension plan, the 401(k) is one of the few remaining ways to save for the future. Employees who stop getting a 401(k) match generally do not increase their contributions to make up for the match. Some employees get mad and stop contributing all together. Yet with the stock market trading at all time lows, this is the best time to invest.

Your role is not to advise employees on their investment decisions. However, if the decision to suspend the match is a strategic one, you will find a way to communicate this decision to employees in a way that helps them to be a part of that long-term strategy.

8. Flextime and job sharing: Where is it headed, and what are the pros and cons?

Flextime jobs decreased 27% since May 2007. This Flex-Time trend data is derived from millions of jobs indexed by Simply Hired, a job search engine. There are many factors that have influenced this reduction including the economic times we are in which influences a reduction in all jobs. Yet, flextime is here to stay and it’s the best solution for many workers today. And, it’s not just for women anymore! Tomorrow’s employers will need to craft work schedules to cater to Boomers who want to reduce their workload, Gen X’ers juggling family and work and Millennials who want their work lives to revolve around personal ambitions. Today’s workforce is more willing to ask for what they want. Can you give it to them?

Flextime is when the employee can select the hours he or she will work based on limits set by the employer. Employees on a flexible schedule may work a condensed work week like four ten hour days. Those who work a five day week may work hours other than the typical "nine to five."

Job-sharing is a way for two people to both fill one job. Essentially, each person has a part-time position. There are three main types of job share:

1. Shared responsibility means there is no division of duties. They do the very same job but at different days and or times during the week. These partners are interchangeable.

2. Divided responsibility is when projects and/or clients are split between the partners. Each partner works independently and chooses their own hours.

3. Unrelated responsibility is when the partners do completely unrelated work while working in the same department. It’s like two part-time jobs running in tandem and works when the partners have different skills, both of which are needed by the employer.

If you are considering adoption of a flexible work option for your employees, consider these pros and cons:

Pros
For the employee, a flexible work arrangement can offer more balance between work and family obligations. It can increase job satisfaction and reduce overall commute expenses. For the employer, offering a flexible work arrangement to its employees can lead to greater productivity and better health and well being. It can also be used as a recruiting advantage and a retention tool for key skills. For the community, adopting a flex plan option benefits the city by reducing peak hour traffic flow, reducing fuel consumption needs and improving air quality.

Con
For the employee, the line between work and home can become blurred. Employees are concerned they may lose “face time” with their boss and co-workers. For the employer, they lose the comfort of “seeing” their employees working. A manager can set performance standards and hold the employee accountable to them.

9. The new President and Congress: The four soon-to-be laws that you MUST get up to speed on and laws that may be reconsidered.

New Employment, Labor and Discrimination Laws in 2009:

Americans with Disabilities Act Amendments Act of 2008 (ADAAA)
This act amends the Americans with Disabilities Act of 1990 (ADA), to better protect disabled American workers from employment discrimination. The ADAAA becomes effective on January 1, 2009.

Fair Minimum Wage Act of 2007
This relatively new wage and hour law increased the federal minimum wage by 70 cents per year for three consecutive years. The third and final minimum wage increase under this act becomes effective on July 24, 2009 for a total of $7.25 per hour.

Family and Medical Leave Act (FMLA) Final Rule: Effective 1/16/09
A new final rule updates the FMLA regulations, to grant eligible workers the right to take up to 12 or 26 weeks of unpaid military family leave, it clarifies certain family and medical leave rules for workers and employers, and changes FMLA rules based on decisions made by U.S. courts. The final rule provides employers with new notice and certification time frames and forms.

Final Rule for Federal Contractors and E-Verify: Effective 1/15/09
President Bush signed an Executive Order in 2008 requiring Federal contractors to use the E-Verify System, to verify the employment eligibility of their workers as defined in the Executive Order. Because the regulations fail to address certain shortcomings and appear to go beyond the congressional intent for the federal verification program, SHRM has requested that the Bush administration withdraw the proposed rules from consideration.

Laws to be Reconsidered in 2009:

Civil Rights Act of 2008
The related bill introduced by Representative John Lewis in early 2008 amends several federal civil rights statutes (discrimination laws) to strengthen the legal rights and remedies originally intended by Congress when passing the laws, but later weakened by U.S. court rulings. The House version of the bill was cosponsored by 33 representatives, while the Senate version was cosponsored by 19 senators. (Re: Bill H.R. 5129 and Senate version S.2554)

Employee Free Choice Act
Representative George Miller introduced this Act in early 2007, to amend the National Labor Relations Act to better enable employees to form, join or assist labor unions and to better curtail unfair labor practices. (Re: Bill H.R. 800)
Fair Pay Restoration Act
This Act is also referred to as the Lilly Ledbetter Fair Pay Act of 2007. Senator Edward Kennedy introduced the related bill in 2007 to reverse a U.S. Supreme Court ruling (Ledbetter v. Goodyear Tire & Rubber Co.) that made it more difficult for employees to file wage discrimination lawsuits, because of an overly-restrictive statute of limitations. The bill also amends Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967 to make it clearer that wage discrimination is unlawful on the basis of race, color, religion, national origin, sex or age. (Re: Bill S.1843)

Family and Medical Leave Expansion Act
This act amends the Family and Medical Leave Act of 1993 (FMLA) to make it apply to employers who employ 25 or more employees. Currently, it applies only to employers who employ 50 or more employees. Also considers granting leave rights to employees who must address the effects of domestic violence. (Re: Bill H.R. 1369)

Family Leave Insurance Act of 2008
The House of Representatives first considered this Act in April 2008. If Congress passes the Act (or an equivalent replacement act) in 2009, the new federal employment law will require certain employers in all states to provide paid family and medical leave benefits to eligible employees. The FLIA will establish a Family and Medical Leave Insurance Program at the federal and state levels. It will require employers who are bound by the FMLA to join the Program or establish voluntary plans.

Healthy Families Act of 2007
If the Healthy Families Act (or an equivalent replacement act) becomes federal law in 2009, it will require employers in all states who employ 15 or more employees to grant minimal paid sick leave to employees, so they may care for themselves or family members.

Paycheck Fairness Act
This act amends the Fair Labor Standards Act of 1938 to provide more effective remedies to victims of wage discrimination on the basis of sex (gender). (Re: Bill H.R. 1338)

Sexual Orientation Discrimination Law
In November 2007, the House of Representatives passed the Employment Non-Discrimination Act of 2007, which prohibited sex discrimination in employment on the basis of sexual orientation. But the historic Act died in the Senate. Still, it’s a hot legislative topic; subsequently, Congress will likely reconsider the Act or introduce a replacement act in 2009, such as one that will amend Title VII to prohibit employment discrimination on the basis of either sexual orientation or gender identity. Several states have already enacted similar laws.

Source: Employeeissues.com

10. Now is the time to coach and develop your leaders: It is easy in hard times to lose sight of long term goals!

Leadership development is important in good times and bad. A downturn offers a great opportunity to re-vamp or establish a leadership development program for your organization. These programs are designed to help leaders learn and apply the skills to help the organization achieve its goals.

Now is the time to help your leaders understand their behaviors around financial decision making and in relationships with their boss, peers and subordinates. When times are tough bad behaviors get worse. It’s human nature. The everyday stress gets to the best of us. As an HR leader you can make a difference by focusing on programs that will have fast behavioral impact on cost and margins and in motivating employees to increase productivity and results.

In addition to implementing programs that develop business acumen, you will want to incorporate approaches that address leadership agility and organizational learning. Now is the time to implement a coaching program or re-vamp your existing coaching program. Coaching has become part of the development landscape and fits in at most levels of an organization. It gives leaders the permission to take a long, hard look at themselves. When an organization is under pressure because of a slow economy, it should be reflecting on its direction. Coaching could be the ideal route-planner if it is implemented properly, with a three-way contract and a suitable coach.

For an effective coaching program, hire a coach who is business-focused enough to check the organization is performing against key criteria, and confident enough to ask in-depth questions. Coaching is always about the context. So if a business is facing a fall in demand, then the coaching should be about what is going to happen and about helping people to make drastic decisions. Coaching can be used to help guide people to new skill sets or to reposition themselves. It is an enabler of change and is performance-focused. And it is particularly strong in supporting people to develop skills that are effective in managing the environment.

References:

SHRM’s 2009 HR Trend Book, Special Supplement to HR Magazine

SHRM Workplace Visions, No. 4, 2008, “HR’s Insight Into the Economy”

Crain’s Benefits Outlook 2009, November 2008

MetLife Foundation/Civic Ventures, “Encore Career Survey 2008”

Lester M. Salamon and Richard O’Sullivan, “The Health Benefits Squeeze: Implications for Nonprofit Organizations and Those They Serve.” Communiqué No. 3. Baltimore: The Johns Hopkins Center for Civil Society Studies, October 2004

Top HR Trends in 2009

Top 10 HR Trends in 2009