Caught in the Middle
With a swiftly changing business environment, HR executives need to remember their role in helping people and organizations survive and thrive despite disruptions.
By Susan R. Meisinger
Five years ago, on the occasion of the magazine's 25th anniversary, HRE asked me to write about the changes I'd seen during those 25 years, and to suggest what they might mean to HR leaders in the future.
I wrote about some of the many challenges faced by the profession during those 25 years, such as the constant struggle to find the right talent, new HRM technologies, work/life balance issues, compensation and benefit design, managing across borders, outsourcing, insourcing, everchanging legal and regulatory requirements, and changes in board governance.
But I concluded then, and still believe, that while the strategies and tactics HR professionals use to address and leverage these issues over time may be different, the challenge to the profession as it looks to the future will always be the same: how to help people and organizations survive and thrive in an environment of constant change.
Now, since it's HRE's 30th anniversary, it's time for an update. While I still firmly believe that this core challenge remains, what are some of the changes that have occurred in the last five years, and what could it mean for HR leaders going forward?
Globally, nationalistic movements are growing. Pollsters were surprised by the United Kingdom's vote to exit the European Community and by the outcome of the presidential election stateside. Europe's migrant crisis, with Syria being torn apart and other Middle Eastern countries in turmoil, has created greater resistance to immigration. While Putin has increased his hold in Russia, annexed Crimea and created a crisis in the Ukraine, North Korea's leader has continued to rattle his nuclear sabers. Meanwhile, China's growth slowed, and the economies of South American countries such as Venezuela, Argentina and Brazil moved into negative growth territory.
For HR executives, the global environment requires a focus on, and management of, an increasingly complex (and expensive) reassignment of workers across borders. Not only will nations be tightening border controls and immigration policies, but workers may be less willing to move to areas of the globe that seem unstable. For global companies, this means an even greater investment in growing and developing local talent. While that's already the trend, it will become even more important.
And the importance of not only finding talent, but keeping talent, will become even more central to HR's role in the future. Over the past five years, the economy has continued to improve; in January 2012, the unemployment rate was 8.3 percent; this January, it was 4.7 percent. HR executives will have to become even more proficient in finding and keeping the talent they need for their organizations.
And with lower unemployment, pressure will grow to increase wages, which have been relatively stagnant during the past five years, when adjusted for inflation -- while, during the same time, the stock market and some CEO compensation have climbed.
In the domestic public-policy arena, one of the most publicly discussed -- and debated -- HR-related changes during the past five years was the Affordable Care Act and its implementation. The bulk of its provisions, taxes and programs were rolled out in 2013 and 2014, with others not scheduled to roll out until 2022. Advocates cheered the fact that millions of people who were previously uninsured were now covered; opponents lamented the added costs and unsustainability of the law as drafted.
While there has been little federal labor and employment legislation enacted during the same period, new regulatory initiatives were launched, designed to provide greater worker protections, with additional burdens imposed on employers. These include higher salary requirements for workers considered exempt from being paid for overtime; permitting smaller bargaining units; providing for expedited representation elections; promulgating an expanded definition -- with attendant liabilities -- of joint employment; new requirements for those providing investment advice to retirement-plan participants, with a fiduciary standard of care under the Employee Retirement Income Security Act; and a revised EEO-1 form to collect pay data from employers with 100 or more employees, to name a few.
And then we had an election, with a new president taking office. He's now moving to keep his promise to "repeal and replace" the Affordable Care Act, and has already begun to block or delay many of the worker protections put in place by the last administration.
What does this mean for HR executives? HR will be caught in the middle of a pendulum swing in public policy, and will have to monitor and be prepared to react to wherever the policy pendulum lands on a wide assortment of issues. This includes ensuring that their organizations are mindful and aware of these changes while devising business strategies. And, of course, they must do so while being aware of the state and local governments that may adopt some of the worker protections the new administration blocks.
In the HR technology arena, HR-related technology has continued with its march forward. No one is discussing moving to the cloud anymore. We're there. But as HCM vendors continue to gobble each other up, HR professionals will have to continue to monitor developments, keeping up on where productivity enhancing tools for the HR team might come from, and understanding the implications of those enhancements. My colleague, Steve Boese, has already identified some current trends in HR-systems development and design, and what HR leaders should consider when assessing HR-tech solutions in this column.
But this continued move to the cloud and the growth of the Internet of Things have created a mounting challenge for the business community and HR executives, and it's one that will likely continue unabated: how to ensure the security of business -- and employee -- information. As Wikileaks has shown us, with its release of a trove of alleged CIA-hacking documents, confidentiality of information may be a thing of the past.
In the coming years, this ongoing threat to information security will require continued diligence by HR executives as they work to maintain the confidentiality of employees' personal information. But it also provides an incentive to develop a culture of transparency, in which business strategy and information is shared in ways that increase employee engagement and trust.
These are just some of the future challenges I believe the HR profession will face. And I believe the profession is up to the challenge.
Susan R. Meisinger, former president and CEO of the Society for Human Resource Management, is an author, speaker and consultant on human resource management. She is on the board of directors of the National Academy of Human Resources.