By: Dan Schawbel, November 2016
This post originally appeared on the Forbes site:
Between 2016 and 2017, the job market will continue to improve causing both job seekers and employees to have more leverage, which will cause salaries to increase and employers to invest more job advertising, staffing firms and employee benefits. Depending on who becomes the next president of the United States, hiring may freeze, slow or continue its current trajectory. The demand for a more flexible work environment will continue and you will see an emergence of HR practitioners with new skills, including people analytics, Internet marketing, branding and knowledge on new technologies like virtual reality and wearables.
The major economic and business themes over the past year have been focused on the war for talent, creating an employment experience for job seekers and candidates, overtime and compensation, the end of the annual performance review, the continued skills and leadership gap, the rise of Generation Z and the shift to the on-demand workforce. These trends have all impacted how companies recruit, retain, train and structure their workforce for the future.
The top workplace trends for 2017 include:
- Companies focus on improving their candidate and employee experiences.
Companies have always created marketing experiences for customers, and prospects, in order to delight them, increase loyalty and grow their revenues. Next year, you will see the walls come down between your HR, marketing and customer service departments in order to develop experiences for both candidates and employees. When employers don’t notify candidates of their application status, they are discouraged from ever applying for another job at that company again, which limits their future talent pool. Furthermore, a bad candidate experience can turn away customers who may be your candidates, thus resulting in a loss of potential revenue. Aside from candidates, employee retention and engagement have become some of HR’s top issues as top talent has numerous employment options and productivity is key to growth.
- The blended workforce is on the rise.
In the past five years, the gig economy has become a major trend impacting the global workforce, and has created a new kind of diversity, with full-time permanent employees working side-by-side with freelancers. A study exploring the gig economy found that 93% of companies already identify the blended workforce as they’re seeing freelance workers teaming up with employees to work on projects together. In addition, the top reason why outperforming employers are benefiting from the blended workforce is “more flexible teaming”. As more companies hire on-demand to solve key problems and cut costs by removing healthcare coverage, and other employee benefits, more freelancers and full-time workers will need to work together. With many freelancers working at remote offices, the ability to manage without borders is going to become a critical skills globally.
- Annual performance reviews evolve into more continuous reviews.
One of the biggest discussions in HR circles is performance reviews, how to transform them and implement something new that serves both managers and employees. Professionals today desire instant feedback, a behavior they’ve adopted from the instant gratification they receive on social networks like Twitter and Facebook. Younger generations are especially impatient and are unwilling to wait a whole year to learn about their strengths and areas of improvement. A whole one-forth of employees feel that annual performance reviews don’t help improve their performance. The annual performance review is coming to an end on a global scale as generation Zs and millennials are currently receiving feedback either daily (19%), weekly (24%) or regularly (23%).
- Millennials meet Generation Z in the workplace.
2016 marks the first year that gen Z is in the workplace, while a third of millennials are in management roles, some of whom have direct reports. 2017 will mark the first full year that gen Z will be settled into the workplace, with a new outlook on business, new demands and widening the technology gap even more between younger and older workers.
- Augmented and virtual reality revolutionize recruiting and training.
While there has been a lot of hype around new forms of reality in 2016, companies are going to take it a lot more serious in 2017 as new equipment, programs and use cases surface. Virtual reality hardware revenue is set to reach over eight billion in the next two years and the amount of money invested will be over four hundred million with 25 million users by that time.
- The war for talent heats up as the employer and employee contract continues to evolve.
The average tenure for employees, regardless of age is a mere 4.6 years in the United States and based on numerous studies we’ve conducted, millennials leave after two years. Employers have recognized that there is no lifetime employment contract and some companies have incorporate strategies from the book “The Alliance” as they implement “tours of duty” to appease employees. Through hardware, including smartphones and wearables, and social networking sites, talent is more freely available and talent has more opportunities to choose from. Seventy-six percent of full-time workers are either actively looking for a job or open to new opportunities and 48% of employers are unable to fill their job vacancies because of the skills gap and high attrition rates. With all of this competition for talent, an entire 90% of employers anticipate more competition for talent, especially in emerging markets such as India, North America and Asia. This is why you will see an even greater emphasis on the employee experience in 2017 because companies are being forced to focus more on corporate culture and values than pay in order to retain employees.
- Organizations restructure to focus on team over individual performance.
One of the most fascinating trends, despite the rise of the gig economy, is the emphasis of teamwork regardless of employment situation, industry or politics in a company. While individuals have their own career agenda, companies are now structured with teams because high performing teams will enable them to compete for the future. Organizations are restructuring for several reasons, including the rise of millennial and gen Z workers who grew up playing team sports and have the same expectations at the office and the fact that organizations are trying to better align to customers so they must be agile due to market volatility. Nearly all (92%) of companies rate “organizational design” as their top priority and three-fourths of gen Z’s and millennials said they are well prepared to work effectively in a team. Cisco was one of the first companies to embrace this trend, creating “Team Space,” a platform that delivers intelligence on how teams can work best to win together.
- Workplace wellness, and well-being, become critical employee benefits for attracting top talent.
Companies are using wellness programs to lower absenteeism, attract talent, and save on healthcare costs, while employees have become more health conscious in the past several years. Compared to last year, health-related employee benefits have increased by 58% and wellness by 45%, which will continue into 2017. Some companies realize that workplace stress is the biggest health issue that employees face so they invest in creating a more relaxing and healthier environment for them.
- Companies get creative with their employee benefit packages and perks.
Fair compensation is most important to all age groups, genders and ethnicities almost unanimously around the world based on several studies. Once you get past pay, then the two most important employee benefits are healthcare coverage and work flexibility, a benefit that wasn’t mainstream a decade ago but is today because of the sheer demands of work and our “always on” society. In a recent study, we found that compared to two years ago, work flexibility is the top employee benefit (over healthcare in 2014) globally yet only a third of companies offer it. Even the companies that offer at least some degree of work flex aren’t actively promoting those programs to employees or job seekers, who are spending more time researching companies before applying for jobs. Aside from these two major employee benefits, new ones are surfacing focusing around education and student loans.
- Office attire and workplace culture becomes more casual.
Several years ago, Virgin Founder Richard Branson was on the cover of Forbes Magazine with a scissors cutting off his tie, calling for the end of business formal attire. With the rise of younger generations, and more employees working remote, there’s no doubt that the workplace is increasingly casual. In 2017, you will see a continuation of this trend, with more employees demanding to drop their suits and ties in exchange for jeans and shirts. Today, 50% of managers say that employees wear less formal clothing than they did five years ago and nearly one-third would prefer to be at a company with a business casual dress code.