2. CURRENT TRENDS IN HR
• EMPHASIS ON STRATEGIC PLANNING & SUCCESSION
– VP of HR is a Strategic Manager, Management Succession Planning
• EMPHASIS ON COST-RELATED ISSUES / COST CONTROL
– Global Competition, Outsourcing and Downsizing
• NEW SPECIALTIES EMERGING IN HR
– HR Planning, International HR, Employee Assistance Programs
• GROWTH OF GOVERNMENTAL REGULATIONS
– Wages (1930s), Unionization (1940s), Employment (1960s)
• PROFESSIONALIZATION OF HR MANAGEMENT
– Professional HR Societies & HRCI (Certification Institute)
• THE INTERNET REVOLUTION
– Electronic Recruiting, Records Management, and HRIS
3. Current Trends
Rising cost of
benefits,
especially
health care
Competitive
pressure on
increasing
employee
wages
Rising
Compensation
Costs
5. Current Trends
A move toward
single software
platforms
Use of
technology to
communicate
with employees
Evolution of new
technologies
Harnessing New Technology
7. Rising Compensation Costs
1. Rising cost of benefits, especially health
care
Health care costs for most employers is expected
to be around 7%, a moderate increase compared
to previous years
8. Employer Responses
Aggressive health care initiatives, such as higher
deductibles, co-pays, and employee contribution
levels.
• 88% of employees are required to pay some of
the insurance premium out of their own pockets.
• Changes or elimination of employee health care
coverage
• Some employers have been holding their health care
costs to a 1% increase.
9. Employer Responses
Focus on changing employee behaviors
Wellness programs
Smoking cessation efforts
Education of employees on health care options
and associated costs
Successful employers are aggressively pushing
consumer directed health plans (CDHPs)
Combines a high deductible insurance policy with a
tax advantaged health savings account
Firms are setting the premiums at 30% below
traditional plans to encourage participation
10. Employer Responses
Saving money by providing free drugs and
supplies for chronic diseases (e.g., asthma,
diabetes) that are known to lead to costly
complications.
Goal is to get patients to stick to their treatment
schedules; often tied to classes or coaching
Upcoming survey from Hewitt Associates
indicates nearly 20% of firms do this now, and
47% are considering doing so in the future
Paying the full amount of common
preventive services can also help reduce
costs
11. Employer Responses
Sending the sickest employees to the best
doctors is gaining as a strategy
Dubbed by some as a 20-20 approach - employers and their
health plans use data to identify physicians rated in the top 20%
for effective treatments and match them with the 20% of
employees who most need care.
Employers provide financial incentives, (e.g., lower
copayments) as incentives to use the top providers.
Eventually, firms will try predictive modeling to identify the
sickest 20% of employees so steps can be taken today to "get
ahead of the curve”
12. Employer Responses
Increasing financial penalties for employees that
poorly manage their health
Many companies continue to reward workers who take
health risk assessments and participate in health
management programs, while punishing those who do
not
Employers may deny a worker access to higher-benefit
plans if worker declines participation in wellness
programs
13. Employer Responses
On-site medical clinics are growing in popularity
Large companies staff clinics with own employees
while smaller firms contract out to nearby clinics
Help provide primary care to workers at low or no
cost
On-site clinics lessen time employees spend away
from work.
On-site clinics expanding to include rehab
services, dentistry, X-ray and lab work
Forms inviting specialists to come on-site and
offer their services.
Clinics moving into more active management of
workers' health conditions
14. Employer Responses
Putting health care into employee’s hands
As health insurance costs continue to rise,
employers are adopting a controversial new
approach: ending group coverage and giving
employees $50 to $200 or so a month to help buy
their own health care
15. Rising Compensation Costs
2. Competitive pressure on increasing
employee wages
Linking pay to organizational goals,
employee productivity, and labor market
norms
Pay-for-Performance Programs
Performance Management
16. Success of Programs
• Pay for Performance Works When:
It is measurable and objective
There are clear expectations
There is commitment to training and support
Flexibility for input
17. Failure of Programs
• Pay for Performance Falls Short When:
It pits employees against each other
It pushes one outcome to the detriment of the
others
It is so subjective it opens the organization and
managers to allegations of bias
18. Key Drivers of Success
Better communication of performance standards
with all levels of the organization
Clearly Specify Incentive Measures
Organizational measures:
• service quality
• teamwork
• income growth
• cost savings
Individual measures:
• based on established performance goals within
individual areas of responsibility
19. Challenges in Implementing Performance-Based Pay
• Pervading Attitude of Equality
• Custom of Cost of Living Approach
• Challenge of Performance Measurement
• Discomfort with Judging Performance
• Weaknesses in Data Collection
• Inadequacy of Funding Resources
20. Current Trends
Developing Human Capital
1. Managing talent – recruitment, development, and
retention of the best workers
Employers need to find innovative ways to “brand”
themselves, setting them apart from competitors and
becoming an “employer of choice”
As talent becomes scarce, development of current
employees for promotional opportunities
21. Developing Human Capital
2. Labor shortage – finding the right talent
Statistic: By 2020, gap between available and
required skilled workers is projected to be 14 million
Use of e-recruiting and non-traditional labor pools
Establishing selection system geared to retention:
better skills assessment, knowledge, and fit for jobs
22. Developing Human Capital
3. Higher ethical standards
Greater focus on trust and integrity at all levels
Regulatory compliance issues (i.e., Sarbanes-
Oxley Act)
23. Current Trends
• Harnessing New Technology
1. Use of technology to communicate with
employees
Company intranets
E-Newsletters
Company emails
24. Harnessing New Technology
2. A move toward single software platforms
Integrated HRIS
PeopleSoft
SAP
Oracle
26. Harnessing New Technology
Perhaps most significant development is the use of
organizational intranets
An intranet is internal network that makes use of World
Wide Web technology (browsers, servers, etc.) to gather
and disseminate information within the firm
Intranets may be linked to the external Internet, but are
secured so that only authorized users can access
information on internal components
27. Harnessing New Technology
3. Evolution of new technologies
• Employee Self-Service and Data Exchange
Capability to maintain personal data
View context-specific information
Initiate benefits transactions
Internet-based tools are quickly becoming the preferred method for
employees to execute benefits transactions
28. Benefits of Automated Benefit Administration
• Reducing and eliminating extensive manual efforts
formerly needed to:
Distribute, collect, and process forms
Test programming required to export/import data
Administer the periodic data exchanges
Reconcile data
Resolve employees’ problems resulting from the time lag
between data collection and processing
29. Current Trends
Managing the Changing Workforce
1. Increased diversity in the workforce
Creating workplace that respects and includes
differences
Recognizing unique contributions individuals with
differences can make
Creating work environment that maximizes
potential of all employees
30. Managing the Changing Workforce
2. Work-life balance
Employees experiencing burnout due to
overwork and increased stress – in nearly all
occupations
Rise in workplace violence, increase in levels of
absenteeism as well as rising workers’
compensation claims
Causes range from personal ambition and the
pressure of family obligations to the
accelerating pace of technology
31. Work-Life Balance
According to study by Center for Work-Life Policy, 1.7 million
people consider their jobs and work hours excessive
50% of top corporate executives leaving current positions
64% of workers feel work pressures are “self-inflicted”, and
taking a toll
In the US, 70%, and globally, 81%, say jobs are affecting their
health.
Between 46% and 59% of workers feel stress is affecting
their interpersonal and sexual relationships.
Males feel there is stigma associated with saying “I can’t do
this”
32. Managing the Changing Workforce
3. Structural shift from the manufacturing to the
service sector
Growth in part-time employment
Rising prominence of women in the workforce
Gradual ageing of labor force with fewer young
people entering workforce and participation rates
among older workers increasing
Growing importance of temporary employment and
self employment
Adoption of flexible working practices, such as job
sharing and the increasing opportunity to work from
home.
33. Conclusions
Exciting time for HR professionals
More emphasis on cost containment and control
Focus on employee responsibility and involvement
at work
Greater use of technology in communication with
employees
More flexible patterns of work
