2012 is quickly coming to a close. A new year always brings with it hope and anticipation—and of course predictions. In the New Year, expect to see the following:
- Strong Economic Rebound: 2013 will be a better year for business and its employees. Remnants of the crippling recession that began in 2008 will be put behind us. Business expansion will be up, unemployment will be down, and the stock market will continue to climb. Optimism reigns.
- Employment Will Be Up: As the economy grows, the pressure to hire will increase. Unemployment nationally will drop to near 7%. Employers, who had been reluctant to bring on more workers, will slowly open the spigot. Watch for an initial flurry of temporary hires that will slowly be converted to regular employment.
- Turnover Will Follow: As the economy heats up with more hiring, existing workers will begin to look for greener pastures. No longer will they feel constrained by the fear of not finding a job. Employees will be looking for better opportunities, pay and flexibility. Recruiters will be active enticing workers to test the waters.
- Hiring Demands Expose Old Problems: The labor and skills shortage about which employers lamented during the turn of the century and forgot about during the recession will begin to rear its ugly head again. Finding quality, skilled labor will be difficult and the expected flood of retirements from baby boomers and the exodus of workers wanting a change will exacerbate this issue.
- Succession Planning Takes Center Stage: American workers continue to gray. As the economy improves and the stock market approaches 14,000, bringing with it healthier 401Ks, baby boomers will begin to feel confident and secure enough to begin planning their exits (though don’t expect them to leave the world of work completely). The subsequent loss of talent and knowledge will spur employers to quickly put in place succession and knowledge-retention plans.
- Mixed Wage Growth: Wage increases will remain down for the most part. Employers will continue to hold wages steady. Increases of 2 ½ to 3% will continue. However, the skills shortage will force employers to increase pay further for those hard-to -find workers in order to ease pressure on hiring and retention.
- Immigrations Reform Begins: The labor shortage will highlight the need to open up immigration. Employers’ inability to fill key positions and its resulting impact on sales, productivity and profitability will nudge a reluctant Congress to begin to address the issue differently. Watch for a demand for elimination of the cap for H1-B visas allowing increased hires for highly educated and skilled foreign workers.
- Enforcement Up: Expect aggressive enforcement of current labor laws, coupled with employee-initiated complaints against employers. Over the last 4 years we have seen unprecedented enforcement of existing immigration laws. This will continue as reform measures are addressed. In addition, with an ever diverse and aging workforces and large numbers of returning military reentering the workforce, expect to see age, race, and veteran based discrimination claims. Employment attorneys will be busy.
- ObamaCare Fully Implemented: With the reelection of the President, the talk of repealing the Affordable Care Act will end. Employers and the states will take the necessary steps to fully comply with the law. Those employers, who in fits of pre-election bravado threatened to close their facilities and terminate their employees rather than comply, will realize that the viability of their businesses will necessitate hiring and retaining good workers and that means offering health insurance. At the same time, expect to see increases in health care premiums, though not at the double-digit rates as had been the norm.
- Social Media Expands: Employers will fully embrace social media for marketing, sales, communications and recruitment. At the same time, expect high profile skirmishes between employees who want to “tell all” about their boss and company and business who wants to limit and control speech. The National Labor Relations Board has already waded in on this issue. Expect more government encroachment and push back from employees and employers before the dust settles.
The election is over and the economy is improving. The uncertainty that held business back from making decisions is clear. Barring a fall off the fiscal cliff as the New Year begins, 2013 will be a bounce back year with employees taking center stage. The challenges business will face will be difficult, but this year the wind will be at our backs.
What do you think will happen in 2013? Share your predictions in the comment section.