Five Key Workforce Trends To Watch In 2016

Whenever we start the process of closing out one year and planning for the next, it is always useful to identify and take stock of the major workforce trends for the coming year. So, as you think about your budget for the year ahead and begin implementing your annual workforce strategy, we’ve identified five key trends for you to consider.

1. Millennial Leaders

In March 2015, the number of Millennial workers (otherwise known as Generation Y employees−those between the ages of 19 and 35) surpassed Baby Boomers, and they now account for the largest generation in the workplace. In fact, one in every three workers today is a Gen Y employee. More than half of all Millennials in the workforce are already in leadership positions and 41 percent have four or more direct reports. Unfortunately, the majority of Millennial leaders feel unprepared for their role. A report by Deloitte notes that 64 percent of current Millennial leaders surveyed “felt unprepared when entering their leadership role.” Lack of training and mentorship are the key reasons cited for this finding.

Our recommendation: Now is the time to review your succession plan and to ensure that your new and future leaders have the formal and informal training necessary for the positions they may be taking on in the near future.

2. Tight Labor Market Continues

Anyone who tried to hire experienced talent in 2015 already knows that the labor market for skilled workers is very tight. The national unemployment rate has sunk to five percent below pre-recession levels, and the unemployment rate for skilled labor is even lower. This trend is likely to continue this year. Companies, in an attempt to attract new talent, are increasingly offering significant sign-on bonuses and elevated pay rates. And, all too frequently, employees who may be tempted to accept a better job offer are receiving sizeable pay increases to remain in their current positions, thereby driving up pay and keeping the labor market tight. Also driving up pay is demand for recent college graduates. Starting salaries for those without experience but with college degrees are up 5.2 percent in just the past year, to $50,651, according to a survey from the National Association of Colleges and Employers.

Our recommendation: Focus on employee engagement as a means of keeping your current talent and be prepared to act quickly to offer the higher wages/bonuses that new talent will likely demand in 2016.

3. Boomerangs, Retirees And Generation Z

Given the difficulty of finding and retaining skilled talent, many companies are eliminating their boomerang policies, which prohibit the rehiring of employees who leave for another job and reapply at a later date. As a result of the frequency with which employees change jobs these days, and the benefit to hiring someone who already has the skills and training needed for the job, many employers are making it a policy to re-recruit their ex-employees and to stay in close contact with them through social media and other measures.

This need for skilled workers is also driving the trend of “consulting” employment for Baby Boomers, who are staying connected with their former employers and are continuing to work well past retirement age, typically in some form of part-time, freelance or consulting arrangement.

The coming year will also welcome the first of the Generation Z employees to the workforce, those high-school graduates who also may have some college hours. The good news is that it is anticipated that Generation Z workers are likely to be private, multi-tasking, cynical, entrepreneurial, loyal, hyper-aware of cultural events and technology driven.

Our recommendation: With all these generations in the workplace, invest some time in building relationships, mentorships, reverse mentorships and other programs to ease the tensions and miscommunications that will likely crop up.

4. The Continued March Toward A Freelance Economy

The number of workers turning to freelance work has increased by approximately one million per year over the past two years. Current trends indicate that by 2020, 40 percent of the workforce, or 60 million workers, will be independent workers, defined as freelancers, independent contractors or temporary workers. This is fueled largely through technology platforms that enable job and project sharing, a desire for increased independence among highly skilled workers and an effort by businesses to reduce overhead and labor costs.

In response to this, the Obama Administration is pushing to tighten the rules on who can be considered an independent contractor. It is motivated to do so because freelance and independent workers lose certain workplace benefits based on their non-employee status (workers’ compensation, unemployment and benefit deductions, for example).

Our recommendation: Be sure your freelance and temporary workers are appropriately classified based on new federal standards released in 2015.

5. Increasing Federal Regulations

In addition to introducing new independent contractor standards in 2015, the Obama Administration also released a new minimum salary threshold for who could be exempt from overtime. In late 2016, the Administration is expected to implement these new rules, which are expected to increase the minimum weekly pay from $455 to $970. The Administration is also expected to expand “ban the box” policies which require that public sector employers and federal contractors delay inquiring about the criminal background of job seekers until they are well along in the hiring process. All of these initiatives are within the administrative authority of the presidency and are not subject to congressional approval. You can expect that they will be implemented in 2016.

Our recommendation: Regardless of who wins the presidential election this year, many of the regulatory provisions promoted on the federal level do not require congressional approval and are likely to be implemented in 2016. Therefore, it is best to make sure your policies and practices are up to date and compliant.

Claudia St. John is president of Affinity HR Group, LLC, PPAI’s human resources affiliate. Affinity HR Group specializes in providing human resources assistance to associations and their member companies. www.affinityhrgroup.com

 

Q&A With Claudia St. John

Send your human resources-related questions for Claudia St. John to ppb@ppai.org. Select questions will be answered in future issues.

Q: We have an employee who keeps showing up late or not calling in when she is going to be absent. We’ve spoken to her about it twice already and now feel we need to write her up. We’ve never had to write someone up. What is involved?

“Writing someone up” is typically the second step in a progressive discipline process. After you have verbally warned someone about a behavior or policy violation, it is a good practice to provide a written warning after the next infraction before a more serious discipline is necessary (such as suspension or termination). In your written warning, it is best to: 1. Describe the behavior or policy violation that has occurred (including details such as date and time); 2. Restate the policy that applies (in this case the process and timing required for “calling-in”); 3. Explain what will likely happen if the behavior is repeated in the future.

Have the employee sign the document—remember, this doesn’t mean she agrees with your write-up. It just means that she has read and understood the warning. If she won’t sign, having someone sign that they witnessed her reading the warning is a sufficient substitute.

Q: My customer service representative checks her work email and often wraps up loose ends from home. She hasn’t asked, but should I be paying her for that time?

In a word, yes. Presuming she is non-exempt, as most CSRs are, she is entitled to pay for every hour worked, whether from home or elsewhere. Moreover, if this work totals more than 40 hours in a work week, she is entitled to overtime pay as well. She may not be asking for pay, but legally, you are required to pay her. Given the difficulties of tracking off-premises work, many employers opt to not allow their non-exempt employees to work from home.

Q: We have an employee who was terminated for poor performance. Now she is applying for another job and they are calling and asking for a reference. Honestly, she was terrible and I would never hire her again. Can I tell the new employer that?

The current “best practice” is to provide only verification of employment dates and salary when providing a reference. In most cases, this is a good practice, but if your ex-employee was fired for a serious incident—violence, theft and discrimination, for example—it’s better to be honest about your reasons for termination. This is because if an employer hires the ex-employee based in part on your reference and the employee goes on to do harm, you could bear some responsibility in that negligent hire.

Q. We want to require our employees to read, speak and write English at work. Is such a policy legal?

A policy like this would need to be strictly scrutinized. For example, let’s say you are hiring a cleaning crew for your building. Given the chemicals that they use and the interactions that they may have with the tenants, it may be appropriate that they be sufficiently fluent to speak, read and write in English to perform the duties of the job. However, it is hard to imagine what the business case would be to require that they speak English with one another instead of their native language while performing the duties of their job.