HR Leaders Warned To Prepare For the Future of Work

HR Leaders Warned To Prepare For the Future of Work

Noting that only 9% of chief human resources officers (CHROs) agree that their organization is prepared for the future of work, technology consultancy Gartner, Inc. advised senior HR leaders to develop strategies to help transition their company to a future in which the workplace is shaped by artificial intelligence and other digital technologies.

In a report released on October 28, researchers identified five areas that deserve deeper consideration by HR leaders as work continues to evolve. First, they noted, data is increasingly used to make work-related decisions in talent acquisition and management, and even workplace design. The report cited recent research indicating that 75% of organizations are dramatically increasing their investment in analytics. The authors cautioned that this increasing focus on talent analytics is forcing senior HR leaders to consider how to collect and use data in an ethical way.

Second, researchers observed that 73% of CHROs surveyed say building critical skills and competencies is a top priority. The report warned, however, that the skill sets needed are changing significantly, as in nearly two-thirds of recent job postings, more than 25% of the required skills had changed since just five years ago. To provide employees with the learning opportunities they will need to develop critical skills, researchers said, HR should reimagine skills development to leverage new technology while still providing employees opportunities to develop.

Third, the report recommended that companies develop an internal transparency strategy. The study cited survey data showing that although nearly 60% of candidates believe they are well-informed about the companies they are applying to, 71% said they think employers should increase transparency. To meet employees’ growing expectations for information transparency, researchers advised employers to train managers on how to operate in a more transparent environment in which employees are given access to more information.

Fourth, the study noted that research shows that 69% of a manager’s current duties—including approving expenses, reviewing a project’s status, and onboarding new employees—will be automated by 2024. The study recommended that HR leaders focus on determining which management tasks should be automated, establishing new expectations for managers, and designing career paths for growth with fewer management opportunities.

Finally, the report observed that AI deployment is already widespread, with 70% of CHROs surveyed reporting that they expect investments in AI to replace jobs in their organization within the next three years. However, while acknowledging that jobs that will be lost as new technology is implemented, researchers pointed out that technology will enable access for new talent pools, and advised companies to implement technology that can create an enabling work environment for new entrants to the labor market.

Flexible Work Options Can Boost Growth & Productivity

Flexible Work Options Can Boost Growth & Productivity

As the widening gap between jobs and workers qualified to fill them is undermining productivity and growth at U.S. companies of all sizes, adopting flexible work models can help employers attract talent, while improving employee engagement and productivity and boosting the U.S. economy, according to a study conducted by the Centre of Economics and Business Research (Cebr) with support from Citrix Systems.

The report’s findings are based on data from an online survey of 2,502 U.S. knowledge workers conducted in July. The aim of the study was to determine the potential value to the U.S. economy of a move toward a more flexible working culture by extrapolating the survey findings for each of the demographic groups represented in the sample to the U.S. knowledge worker population. The analysis showed that the total potential U.S. economic gains from a flexible working culture could amount to $2.36 trillion in gross value added (GVA) per annum, with 88% of the total potential boost to GVA coming from individuals who are currently unemployed or economically inactive rejoining the labor market, and the remainder contributed by productivity improvements among individuals currently in work.

The survey found that 69% of respondents who are currently unemployed or economically inactive because they are, for example, retired, full-time homemakers, or caregivers, indicated that they would be encouraged to start working if given the opportunity to work flexibly. The results also showed that 65% of respondents who reported that they currently work part-time said they would be inclined to work more hours if they could work remotely.

In addition, the findings indicated that if provided with the opportunity, 95% of the knowledge workers polled who are currently employed said they would like to work from home 2.4 days per week, on average. Moreover, between 60% and 70% of respondents said they would be willing to work from other locations, including local coffee shops and shared workspaces, one to 1.3 days per week, on average.

The survey also found that 86% of respondents who said they currently have the option to “work from anywhere” take advantage of this opportunity. Among current remote workers, 73% of respondents reported that flexible working improves their personal well-being and ability to balance work with outside activities, 69% said it improves their job satisfaction level, and 60% indicated that it facilitates their professional development (60%). Broken down by demographic group, working remotely was found to be most popular with respondents aged 16-55 who are currently working and have dependent children, with 92% of these respondents indicating they would use flexible working if the option was available.

When asked about the potential productivity benefits of working from home or from other remote locations, large majorities of all workers surveyed said they believe virtual/remote working would enable them to save money (72%), reduce their stress levels (70%), allow them to work at a pace or at hours that suit them (72%), make them more productive (71%), help them achieve better work/life balance (74%), enable them to get more work done as they would spend less time commuting (68%), and help them concentrate better because they would have fewer distractions (66%).

Employers Turn to Innovative Strategies to Limit Health Care Costs

Employers Turn to Innovative Strategies to Limit Health Care Costs

As the average total health benefit cost per employee increased 3.0% in 2019 to reach more than $13,046, following a rise of 3.6% in 2018, health benefit cost management remains imperative for companies, the results of an annual survey conducted by human resources consultancy Mercer indicated.

The survey findings were based on a national probability sample of public and private employers completed by 2,558 employers in the summer of 2019. According to researchers, although 2019 marks the eighth consecutive year of health benefit cost growth in the low single digits, and employers expect costs to rise at a similar pace next year, cost increases continue to outpace overall inflation.

When asked about their priorities for the next five years, 42% of the large and midsize employers (500+ employees) surveyed identified addressing healthcare affordability for low-paid employees as an important strategy. The survey found that in 2019, most large and midsize employers did not hold down premium costs by requiring members to pay more out-of-pocket for health services. For example, researchers noted, the average individual deductible in a preferred provider organization (PPO) grew just $10 in 2019, to $992. However, the survey also showed that the average deductible increased by more than $250 among small employers (10-499 employees).

The findings further indicated that in 2019 some larger employers that had offered a high-deductible plan with a health savings account (HSA) as the only medical plan changed strategies and added a traditional PPO or health maintenance organization (HMO) as an option. But the survey also found that enrollment in high-deductible account-based plans has been rising steadily, to 36% of all covered employees in 2019, up from 33% in 2018, 23% in 2014, and just 9% in 2009.

Researchers observed that as employers search for cost management strategies that do not shift cost to employees, many are turning to innovative tech-enabled programs that help employees manage chronic conditions or other health needs, such as musculoskeletal conditions, infertility, and insomnia. The survey indicated that in 2019, 58% of all large and midsize employers, and 78% of employers with 20,000 or more employees, offer one or more such targeted health solutions. The survey also found evidence of the growth in telemedicine, with 88% of large and midsize employers offering a telemedicine program to their members in 2019, up from 80% in 2018, and only 18% in 2014.

Moreover, the survey indicated that spending on all prescription drugs increased 5.5% in 2019 among large and midsize employers, down from 6.5% in 2018 and 8.0% in 2015. Researchers noted, however, that spending on specialty drugs rose 10.5% in 2019, down only slightly from 11.9% in 2018. The results also showed that 52% of all large and midsize employers and 78% of employers with 20,000 or more employees now steer employees to a specialty pharmacy that typically provides enhanced care management.

Representation of Women on Boards Shows Signs of Expanding

Representation of Women on Boards Shows Signs of Expanding

The percentage of women board members on the corporate boards of companies in the Russell 3000 index exceeded 20% in the second quarter of 2019, marking the first time women have held more than one-fifth of Russell 3000 seats, according to the findings of a quarterly index that tracks gender representation on corporate boards released by corporate governance solutions provider Equilar.

The “Equilar Q2 2019 Gender Diversity Index” (GDI), published on September 11, is the latest report since the GDI was first published in January 2017. Researchers noted that at that time, just 15% of boards seats in the Russell 3000 index—an index that seeks to serve as a benchmark of the entire U.S. stock market by tracking the performance of the 3,000 largest publicly-traded U.S. companies—were held by women, and less than 25% of board vacancies that came open were being filled by women.

The latest GDI found that the percentage of women on Russell 3000 boards increased to 20.2% in Q2 2019, up from 19.3% in the previous quarter, and from 16.9% in Q1 2018. This acceleration caused the GDI to increase to 0.40, with 1.0 representing parity among men and women on corporate boards across the Russell 3000. The index also reported that 41.9% of newly appointed directors in Q2 2019 were women, down slightly from 46.8% in Q1 2019.

In addition, the index showed that as of Q2 2019, just 10.8% (309) Russell 3000 boards were still without a single woman member. Researchers pointed out that this represents a significant decline from the 376 boards without a woman member in Q1 2019. They also noted that the percentage of women who joined these boards as first-time public company board members has surpassed 50% three of the past four quarters.

The index also revealed, however, that just 48 Russell 3000 companies have currently achieved gender parity, while 2,811 have not. According to researchers, the Russell 3000 would require an annual growth rate of women on boards of 8.56% to reach full gender parity by 2030. The GDI Q4 2018 report had projected that based on the rate of growth observed at that time, gender parity on Russell 3000 boards would be achieved by 2034.

New Systems Approach Is Needed To Promote Workforce Development

New Systems Approach Is Needed To Promote Workforce Development

New Systems Approach Is Needed To Promote Workforce Development
While some U.S. workers are finding that their knowledge and skills are no longer up-to-date or in demand on the labor market, many employers are struggling to recruit workers who have the skills and knowledge required to keep their company competitive over the long term, according to a study published by the public policy research organization the RAND Corporation.

The report, “A System That Works: How a New Workforce Development and Employment System Can Meet the Needs of Employers, Workers, and Other Stakeholders,” was published on September 19. The authors observed that as the American workplace changes in response to new technologies, globalization, and demographic shifts, employers still need workers with industry-specific knowledge, but they also increasingly value skills like effective communication and critical thinking.

Applying a systems approach to reconceiving the current workforce development and employment system, researchers attempted to identify the ways in which the system is failing both workers and employers, and to craft a plan for how educators, employers, workers, and other stakeholders can rebuild the current system to bring about the necessary changes.

First, the authors observed, the U.S. workforce development and employment system has changed little since the mid-20th century, and underperforms in a fast-paced and rapidly changing environment in which lifelong learning has become essential. They pointed out that as automation and shifting consumer demands have rendered some of the skills individuals learned years ago obsolete, many workers have an immediate need to acquire new knowledge and skills. In particular, researchers noted, there is greater demand for workers who can master information synthesis, creativity, problem-solving, communication, and teamwork; even as there is still substantial demand for skilled workers in positions that do not require post-secondary degrees or specific credentials.

The study also warned, however, that there is currently no well-defined path for workers to get the training they need. According to researchers, post-secondary training and education institutions generally offer the same structure of credentials and degrees they did years ago, and may be constrained in their ability to respond to changing job requirements by a lack of funding. Meanwhile, they added, in the workplace, employers are often willing to pay for additional training only for their more educated employees.

To tackle these challenges, the study’s authors called for the creation of a workforce development and employment system that provides multiple on-ramps for transitioning workers to access training and employment opportunities, while matching workers and jobs. To build this system, the authors recommended developing data, metrics, and tools to monitor the current system in order to identify where it is failing, and where new approaches are warranted. They also suggested using gaming, competitions, and other strategies to measure the impact of policy interventions, and to create an open clearinghouse that collects and shares information about promising approaches.

Annual Wage Growth Continues To Accelerate In a Tight Job Market

Annual Wage Growth Continues To Accelerate In a Tight Job Market

In the second quarter of 2019, wages for U.S. workers were 4.0% higher than at the same point in 2018, with the average wage level increasing $1.09 over the year to reach $28.54 an hour, according to the findings of a quarterly analysis of workforce trends performed by the ADP Research Institute.

The results, released on July 24, indicated that this year-on-year wage growth as of June 2019 was driven by large wage gains for workers in the manufacturing (4.4% wage growth, $29.83 hourly wage) and construction (4.4% wage growth, $28.65 hourly wage) industries. The survey also revealed that the service sector industries that contributed most to annual wage growth were information (4.2% wage growth, $41.56 hourly wage), trade (4.3% wage growth, $25.27 hourly wage), professional and business services (4.1% wage growth, $36.45 hourly wage), and leisure and hospitality services (4.2% wage growth, $17.42 hourly wage).

In addition, the analysis looked at the wage gains of job switchers as of June 2019. The findings indicated that job switchers in the information industry made the largest gains (9.7% wage growth, $41.08 hourly wage), and that job switchers in professional and business services and construction also experienced strong wage growth of 8.3% and 8.7%, respectively. However, the results showed that job holders in trade, the largest sector, saw more wage growth than workers who switched into the sector (5.2% versus 3.8%), but lagged in terms of annual employment growth (0.6%).

Broken down by region, the analysis found that the region with the highest average hourly wage rate as of June 2019 was the Northeast ($31.99), followed by the West ($30.69). Yet the findings also indicated that the highest level of annual wage growth was in the Midwest (4.5%), even though this region had the lowest hourly wage rate ($26.57) and the lowest employment growth rate (1.0%). The results further showed that job switchers in the West had the strongest average wage growth (7.3%), while workers in the South and the Northeast had the lowest wage growth (3.6%). Broken down by firm size, the analysis revealed that workers at large firms had the highest wage growth (5.1%) and employment growth (3.1%) rates.

Researchers observed that the tight labor market is leading companies to increase compensation, with businesses in most sectors having to raise their wages to retain their skilled workers. They also noted that female job holders have been experiencing larger wage gains than their male counterparts: since January 2019, female job holders registered average wage gains of 5%, while male job holders had average wage gains of 4.6%.