Every year I give my top 10 workplace trend predictions for the upcoming year. You can read my predictions from 2013, 2014, 2015 and 2016 if you missed them. These trends are based on hundreds of conversations with human resource executives and workers, a series of national and global online surveys and secondary research from more than 160 different primary and secondary research sources, including think tanks, consulting companies, non-profits, the government and trade associations.
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:
1. 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. A recent study found that nearly 60% of job seekers have had a poor candidate experience and 72% of them have shared their experience on an online employer review site such as Glassdoor.com. 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. Virgin, for instance, created a new candidate experience for the thousands of people they are unable to hire out of the 150,000 applications they receive annually, and have created a new seven million dollar revenue stream by creating a better experience for them. 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. In another study, it was discovered that 83% of HR said that “employee experience” is either important or very important to their organizations success, and in order to enhance the experience, they are investing more in training (56%), improving their work space (51%) and giving more rewards (47%). IBM has used people analytics to predict retention risk for employees in key job roles, and notifies managers so they can prevent them from quitting, which has saved the company over $130 million dollars.
2. 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”. At the SHRM 2016 Annual Conference in Washington DC, Henry Jackson, the President of SHRM, noted that the “rise of freelance workers” was one of the top five biggest employment trends. Multiple studies from Intuit to The Freelancer’s Union predict that at least 40% of the workforce will be freelancers in the next few years. 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.
3. 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%). In the United States, 28% of gen Z and 17% of millennials receive feedback regularly. Two of the largest companies in the world, including GE and Adobe, have already abolished their annual review process in exchange for regularly feedback. Adobe, the first major company to step away from annual performance reviews, created a “Check-In” system, where expectations are set annually but feedback is given regularly, resulting in a 2% decrease in voluntary attrition. GE followed suit by created “ Touchpoints,” where there is a daily development focusing on results and changing business demands, which has resulting in a five times increase in productivity in the past year.
4. 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. A new study found that 78% of gen Zs and millennials said that their expectations of their current workplace have been met, and their education actually did prepare them for the working world. A different study found that 36% of millennials have a manager title or above yet the Harvard Business Review found that only 7% of companies have accelerated leadership programs to nurture them. Just like with all generations studied, millennials negatively stereotype gen Zs as being lazy, which will cause some friction. Both generations will continue to put pressures on companies to transform the office, reward employees, embrace flexibility, and align the companies interests with a cause.
5. 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. In addition, with Facebook’s acquisition of Oculus, Apple’s patent on a 3D display system and the current success of Pokémon GO’s augmented reality app, there is no doubt that 2017 will be a massive year for these technologies. We’ve found that one-fourth of gen Z and millennials want their companies to incorporate virtual reality into the workplace and I predict that this will increase next year as more adopt VR consumer technology. The technology that employees are experiencing outside of work will naturally influence them to desire the same tech at the office. Virtual and augmented reality can help close the experience gap for job seekers and allow employee training to be more engaging, less expensive and free of distractions. For instance, The British Army is already using VR in their recruitment process, General Mills has a virtual reality tour of their offices and GE implements VR at career fairs where students wear headsets to explore their oil-and-gas recovery machines.
6. 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.
7. 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.
8. 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. Fewer than half of American workers say that their company supports employee well-being and helps them maintain a healthy lifestyle. Compared to last year, health-related employee benefits have increased by 58% and wellness by 45%, which will continue into 2017. 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.
9. 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 that I’ve conducted over the years. 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, which is relevant due to the $1.3 trillion student loan crisis. One company that is on the forefront of this trend is Fidelity, with their “Step Ahead Student Loan Assistance” program, which helps employees payback loans up to $10,000. Other companies have tackled employee benefits differently, such as Maia Josebachvili of Greenhouse, who is transparent with their benefit package costs and surveys her employees to find out how to best allocate their benefit investments. Other examples include Zeeto, that provides employees a thirty dollar Seamless credit for food, Starbucks with their “College Achievement Plan” and Twitter that offers just about every type of exercise class on campus.
10. 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. The Bureau of Labor Statistics shows that about one-third of American employees do some or all of their work from home, and as someone who has worked from home for years, I can tell you that I’m not wearing a suit here! 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.