Yes, our workplace seems unpredictable. But, of all the trends, I firmly believe human resource management will have the most significant impact on organizations over the next five years. Up to this point, many companies have declared that people were their most important resource, yet did not include a human resource professional in strategic business decisions. Some companies with over 100+ employees continue to have no formal HR position at all. Still others consult with external HR professionals only when there is a major problem. And, while you might think your employees are a happy bunch, you might be surprised to learn a recent survey demonstrated the top employee priority for 2002 was getting a new job!

While there are a number of HR trends, I believe the following seven key trends will have the most significant impact on corporations.

Accountability and Liability

Recent legal decisions finding companies responsible for employee behaviour even while no longer on business premises, has sent shock waves throughout the country. This along with new legislation as well as a general increase in employee litigation, suggests that employers need to have a better understanding of their liabilities in all business areas. Establishing proactive human resource policies and preventative measures and at the same time ensuring all staff are aware and understand the policies will be critical.

Financing and Human Resource Planning

As can be expected, the financial community is particularly interested in corporate accountability and liability, particularly when clients have an operating line of credit. As a result, many banking institutions are requesting their clients submit a company human resource plan along with their business plan and financial statements. At the very minimum, companies will be asked to provide evidence of an established relationship with an on-call human resource professional.

Knowledge Capital and Training

A competitive edge in the industrial revolution meant sophisticated machines and faster production. Today, corporate competitiveness means knowledge management and the ability to keep up with rapid change. It also means that you must first understand the exact knowledge required to run your business and then make certain that employees are trained to their fullest. If the half-life of skills is getting shorter and shorter, then training budgets and programs will have to be significantly increased.

Soaring Health Care Costs

No matter which way we turn, health care costs are going to increase. Some companies have turned to “managed care”, where employees utilize limited funding per service and are directed only to authorized service providers. The trend is to shed the nice to have benefits and reduce health care services to a more basic package. Also, more emphasis will be placed on preventative measures such as pre-employment health screening, absenteeism management, workplace wellness, and quit smoking programs.

Employee Job Satisfaction

With the growing shortage of skilled labour, it has been said that the balance of power is moving toward the employee. More effort will need to be spent on recruitment and retention initiatives because turnover is just too costly. In addition to the need for structure and stability, a recent “good job” checklist suggests that individuals are seeking interesting and challenging jobs where they receive respect, recognition, appropriate work resources, are able to balance work and personal interests and have helpful and friendly coworkers. Taking steps to ensure your company is a “good” place to work will be critical.

Aging Workforce

In addition to the expected issues of intergenerational job satisfiers, the aging workforce (your senior managers!!) will be the biggest issue to deal with. While many baby boomers had planned for retirement, economic circumstances may require they stay longer. This will challenge your ability to retain younger workers who want a promotion. On the other hand, too many retirements can catch you off guard. Many companies haven’t stopped to examine the impact of aging workers on their staffing requirements, benefit plans and/or retirement compensation programs. So, succession and human resource planning will be critical to ensure ongoing survival.

Information Technology

Information technology is expected to continue its fast rate of change. Most will take advantage of new technology to stay competitive and will increasingly use new methods to monitor and quantify their knowledge assets. In doing so, companies must also pay attention to the human side of technology. Policies need to be put in place to guide personal use of the internet or business versus personal cell phones time. New supervisory tools must be implemented for telecommuters or home workers. Finally, we need to prevent and manage the stress created by technology change in the workplace.

Organization Structure

The organizational restructuring trend with a focus on minimal hierarchies, small management teams and front line decision-making will continue. This will create a challenge in terms of the retention of high performing employees. Career development strategies must be put in place to keep people challenged and engaged. Companies that grow larger will require more formal structures to ensure equity amongst employees but at the same time, they must prevent bureaucratic regulations from restricting the company’s ability to respond quickly to change. On the other hand, the Sept. 11 tragedy may cause larger corporations to return to a more decentralized operation.

Work environments are changing quickly. New work related legislation, cross border business issues and the diversity of people and work relationships are becoming much more complex. But, while you may believe that much of the future is unpredictable, I am confident that good human resource management practices will be critical to your ongoing success.

Sources: SHRM Issues and Trends 2002, Canadian Policy Research Network and Workforce Forum.

Barbara J. Bowes, FCHRP, CMC
Barbara Bowes is President of Legacy Bowes Group. She can be reached at barb@bowesgroup.com.