HR Solutions' 2010 Labor Forecast

After a close look at 2009 and continuous examinations of research gathered from previous years, HR Solutions is ready to share its forecast for what organizations will experience in 2010.  The following are HR Solutions’ top ten predictions for this year’s labor market:

1. There will be an increase in recessionary disengagement, the disengagement from work caused by distractions based upon the recession.  Six percent of Engaged Employees surveyed five years ago worried about job security.  This number rose to 14 percent of Engaged Employees in 2009.  As the number of Engaged Employees concerned about job security continues to increase, it will negatively affect important business components such as productivity, customer service, innovation, and retention.
2. Many employers will find creative ways to alter wellness programs and thereby cut healthcare costs.  HR Solutions has seen clients implementing new creative wellness programs for years, such as Phoebe Putney Memorial Hospital, the largest employer in Albany, Georgia, which implemented certain unique health-promoting plans in 2008.  (New plans included the establishment of a regulation that now prevents Phoebe from hiring candidates who use any form of tobacco.)  Although Phoebe did not make these changes solely to minimize healthcare costs, reduced healthcare prices were a benefit.  HR Solutions predicts that the economy in 2010 will cause many more employers to take steps similar to those of Phoebe, only in their case primarily to assist in healthcare costs.  As long as an organization’s leadership is careful in their alterations, wellness changes will not incite turnover.  For example, if organizations use benefits surveys to determine how employees feel about certain changes before they occur, employers will allow employees to become involved in the organization’s decision, thereby encouraging employees to stay.  
3. Employers will need to continue cutting back, despite recent signs of an improved economy.  Organizations will ensure they have the necessary resources to succeed and will leave no room for employees not performing at high levels. On top of optimizing their workforces, employers will work to eliminate redundancies and re-engineer company processes.
4. Organizations will continue to recognize the importance of Engagement and its direct tie to productivity, retention, customer satisfaction, and financial success.  Economic conditions have undoubtedly brought the importance of Engagement to light for numerous organizations that had not recognized Engagement as a vital tool in the past, and this illumination will only continue.  As organizations recognize Engagement’s significance, previous focuses on recruitment/retention will transform into a focus on Engagement. 
5. Employees will begin to own their individual levels of Engagement.  This will occur in moving forward with HR Solutions’ concept of Employee Engagement as being fed by a two-sided relationship.  Employers will take advantage of resources such as HR Solutions’ PEER®, a valuable tool that allows employees the opportunity to manage their own level of Engagement.  Furthermore, managers will be overjoyed that they do not have the sole burden of building Engagement in the workplace.  A shared ownership of Engagement will prove to be not only wiser, but fairer for both employers and employees.
6. Organizations without flex-time and remote working opportunities will consider allowing these options.  As the recession closes and the unemployment pool tightens, qualified new-hire candidates will be looking for flexibility as far as times and locations.
7. Certain organizations still in need of cutting costs will unilaterally cancel all reward programs.  Such myopic decisions will lead employees to feel angry and underappreciated, negatively affecting retention.  Furthermore, organizations that take away reward programs will immediately regret their decision because they will be taking away a key driver of Employee Engagement.  Out of every key driver of Engagement HR Solutions’ research has identified, such as Senior Management’s concern for employees, career growth, and co-worker satisfaction, recognition has the largest degree of impact (56%) on Employee Engagement.

   We also forecast that as the job market improves, organizations will be at risk for losing top talent; employees who stayed at their current position due to the poor job market will leave, along with some of the exhausted, worn-out employees responsible for covering the workloads of laid-off employees.  Recent research conducted by HR Solutions found that 39% of employees responded “agree” or “strongly agree” when asked whether they have thought of resigning in the last six months.  Top reasons selected for this trend included pay (23 percent) and supervisors/managers (18 percent).  Increased recognition will provide one opportunity for organizations to retain important employees who have considered leaving.

8. At least 25.1 percent of all new hires in healthcare will leave during their first year on the job, and bedside RNs will often leave sooner than the average hospital employee, according to Nursing Solutions, Inc.  The national hospital average turnover rate is currently 15 percent.  Bedside RN turnover is 14.2 percent, while first year turnover for registered nurses is 27.7 percent.  Currently, 88 percent of healthcare organizations view retention as a “key strategic imperative”.
9. Older generations of employees will retire.  Although certain benefits will be cut, employers will be searching for ways to create new benefits for these mature generations in hopes of retaining them¹.
   
   “The dramatic changes in the economy over the last few years have created a need to prevent tenured workers from opting to retire once the option becomes available, early or otherwise,” said Vickie Lenchner, Regional Director of HR Solutions Search and Staffing.  “Companies will be more challenged to find creative and committed ways to retain seasoned knowledge workers.  Most importantly, companies must focus on flexibility and Employee Engagement as ways to appreciate and reward their valuable and experienced employees.”
10. Lastly, there will be heightened and continuous scrutiny by the IRS regarding the status of employees versus independent contractors.  This examination will force some organizations to find new ways of handling the extra workloads left behind from the discontinued use of independent contractors.

For further details on this research or for additional information on HR Solutions’ products and services, please call 312-236-7170, visit www.hrsolutionsinc.com, or email info@hrsolutionsinc.com.

¹ For more information on how to retain employees at all levels, please contact HR Solutions at info@hrsolutionsinc.com.  HR Solutions’ capabilities to educate organizations on retention range from the sharing of our research to the presenting of our “Does the Honeymoon Have to End? Keeping Employees Engaged Beyond the First Year” presentation, along with many additional, organization-specific approaches.