We’re living in an interesting time for the HR industry. The labor market is tight and finding top talent is a challenge. Efforts to address inequalities and unacceptable behaviors, from salary history bans to the #metoo movement, are gaining strength and have led to a number of real shakeups this year that will have a real and lasting impact on the workplace. Technology and analytics are continuing to change the way HR decisions are made. And as Millennials make up a larger and larger percentage of the workforce, their preferences on everything from benefits to working style are changing the shape of work.
Here are 11 HR trends that will have an impact on the industry this year:
- Clients are looking to retain professional search services
Finding highly skilled, specialized talent is tough these days. It’s not enough to post a listing on LinkedIn and wait for the applications to come in. The best candidates are often happily employed and difficult to locate. As a result, we’re seeing more clients looking to work with recruitment agencies on a retained basis. I’ve seen more retained searches at Lucas Group this year than in my entire six-year career here.
- Companies are looking to hire HR leaders who are top to bottom thinkers
As the competition for top talent intensifies, the C-suite has realized that the HR team needs to have a solid understanding of the business’s strategy and goals in order to identify and recruit employees with the most impactful skill sets and personality profiles. More and more of my clients are prioritizing business acumen and the ability to think strategically, not just in HR leaders but even HR hires at the manager level.
- Technology is fully integrated into HR practices
The HR industry has been developing and evaluating new technologies for years; what we’re seeing now is the implementation and widespread adoption of those technologies. Everything from recruiting, onboarding, learning and development, to performance evaluation is now done with software. Processes that were once cumbersome are now streamlined and automated, freeing up HR professional’s time and focus.
- HR professionals are using more data to drive decisions
As technology adoption increases, HR professionals now have access to more data than ever before, and they’re using that data to drive decision-making in unprecedented ways. Data is now used in every step of the employee lifecycle, from recruitment to retention to compensation. While human insight is still needed to draw conclusions from the data, the hope is that an analytical approach can help to remove bias and prejudice from employment decisions.
- Employers aren’t able to use salary history to determine compensation
In the past 18 months, a number of jurisdictions have passed laws that prohibit employers from asking about employees’ salary histories. That trend will only continue to grow as more states and cities will almost certainly get on board with this approach. Companies will have to start looking closely at their compensation practices, and in some cases working up alternative methodologies for determining how to compensate incoming employees.
- Employee benefits are customizable
Millennials are notorious for demanding flexibility in the workplace, and this mindset is starting to permeate companies’ approach to benefits. I’m seeing more and more companies offering a menu of benefits to choose from rather than a set list. One employee might want reimbursement for a gym membership where another might want long-term disability coverage. The value that employees place on different benefits varies greatly depending on their personal preferences and their phase of life, so this approach really helps employers to deliver the maximum value to employees.
- More companies are offering unlimited PTO
In keeping with the theme of flexibility, I’m seeing more companies adopt a once-radical policy: unlimited vacation days. In the old days, companies assumed that if they offered a policy like this their employees would never come to the office. But as a few early adopters experimented with offering this perk, those fears turned out to be unfounded – employees actually take fewer days off when they have unlimited vacation days. Companies trust their employees to be in the office when it counts, and employees, in turn, appreciate the flexibility to take days off when they need them.
- Employers are offering more flexible working arrangements
Another perk that Millennials are known to love is the flexibility to work remotely. Whether it’s working from home one day a week or working full time from an internet cafe in Bali, more and more US employees are now working outside of the office (about 43% according to a recent poll). Working part of the week outside of the office can help employees to save time commuting, allow them to spend more time with family, or simply give them the chance to catch up on laundry. Employees like the freedom, and employers haven’t seen a drop in productivity, so I don’t see this trend going away anytime soon.
- Employers are devoting more resources to learning and development
In the years after the Great Recession, budgets were tight and there wasn’t much funding for learning and development initiatives. But as the economy has slowly recovered, I’ve seen a real uptick in resources earmarked for training. With technology changing so quickly, spending money on upskilling employees is a smart way to future-proof your business. Also, the younger generations in the workforce really value learning and development as a part of their personal growth and self-actualization, which means that training is an increasingly important benefit for recruitment and retention.
- The #metoo movement has prompted more openness and accountability in HR departments
As the effects of the #metoo movement continue to be felt in every industry, the HR has had to adapt to survive. In the past, some HR professionals evidently felt that the best way to protect the company was to try to sweep potentially damaging issues under the rug. Now that we’ve seen several high profile cases of that strategy backfiring, there’s a trend towards more accountability and openness in HR. HR professionals are trying to proactively identify problems and address them head-on – before they reach the front page of The New York Times.
- Diversity is a priority
To end on a positive note, we’re finally starting to see a true focus on and commitment to diversity in the workplace – it’s no longer just lip service. Companies have seen that having a diversity of viewpoints and opinions leads to measurable business gains. There’s more proactive thinking among our clients about how to identify and recruit a broad spectrum of employees. It’s a heartening trend to see.
What trends are you noticing in the workplace this year? I’d love to hear what you’re seeing in the comments below.