We can all take a collective sigh of relief as 2010 comes to an end. We finally finish a difficult year and frankly a trying decade. As we enter the New Year, there is reason for optimism. The economy is rebounding and businesses and employees can expect good things to follow. My workforce predictions for 2011:
- Hiring will be up. Throughout 2011, hiring will increase, slowly, but steadily. Watch for targeted hiring as employers focus on key employees who can make an immediate contribution in the company’s core business. Hiring for the sake of hiring is dead.
- Turnover will increase. As employees become more confident of an improving economy, many will bail. Pent up frustrations with cuts in pay and benefits, watching fellow employees lose their jobs, and fatigue due to working more with less will push workers to begin searching for greener pastures. At the same time, employer’s star performers will be targeted by external recruiters for poaching. As business improves, key staff will be needed and those unprotected and unappreciated stars will become vulnerable and open to a recruiter’s pitch.
- Contingent hires will reign. Though the economy is improving, employers will focus their hiring on temporary workers as a hedge. Confidence is not high so employers will depend on temps realizing their workforce can expand and contract easier with them. Temp agency businesses will boom in 2011. Watch for significant hiring of temps, part-times, and independent contractors.
- Cost reductions will continue. Employers will continue to search for ways to cut costs. Labor costs and health care insurance will be the biggest targets. While employers struggle to keep these two line items in check, they will be forced to address the need to remain competitive. Cutting too much will drive employees out—potentially into the hands of competitors; cutting too little and employers will watch their bottom line erode. Employers will struggle to keep the balance.
- Layoffs will continue. Though hiring will increase, expect to see employers cutting labor at the same time. In fact, more employers will be hiring and firing simultaneously. In this new economy, employers will continue to focus on their core business, hiring needed and critical talent for their core business while quickly shedding “unnecessary” workers elsewhere. Lean and mean will be the new mantra.
- Employee engagement drops. Employee engagement has been dropping for several years and will continue in 2011. Workplace stress, fatigue and anger have turned employees off and the last two years have been especially hard on employees. With disengagement, employer’s productivity gains will be at serious risk. Employers who successfully address this problem will see business soar in 2011.
- Training will increase. Employers will begin investing in all aspects of employee training. Training was among the first things to go during the recession and employers are beginning to feel the effects. Skill atrophy has set in. As employers push for greater productivity with less labor, the need for trained talent will be critical.
- Social networking will become mainstream. More employers will turn to social networking to recruit and also to communicate directly with their employees. No longer will it be seen as a productivity drain or an employee distraction. Employers will utilize it as a valuable and cost effective tool.
- Lawsuits increase. Expect more employment lawsuits. As more older and higher paid workers get pink slips while the unemployed struggle to find jobs, more will turn to the courts for remedy. Watch for more age discrimination and wrongful discharge suits.
- Succession Planning is in vogue. More and more organizations and boards of directors will slowly begin to realize that many of their key employees and leadership are getting older. Employers begin to understand that they must prepare for the potential losses of this critical talent and start to put in place succession plans.
In the forthcoming year, employers will refocus their attention from mere survival to strategically positioning their companies for the economic upturn. Workforce issues will be at center stage in 2011. It is going to be a good year.