15 Trends that Will Transform the Workforce

The U.S. labor force will dramatically change in the next decade, experts predict, which means that human resource managers must brace themselves for many major upheavals. Indeed, the workforce will not only be rocked by demographic shifts-such as an aging population-but paradigm changes as well-concepts such as "staff development" may not receive as much emphasis in the future. Here are 15 major trends that experts say will significantly change the workforce and how it's managed:

1) 24/7 Workplace
To accelerate production and services and to broaden their customer base to include foreign countries in different time zones, more companies will stay open at all hours, every day of the week. About 24 million Americans-from assembly-line workers to computer tech support specialists-are already working outside of the traditional 9-to-5 workday, according to Circadian Technologies, a Massachusetts-based consulting firm. The move to an around-the-clock workplace will present HR managers with many new challenges, says David Mitchell, Circadian's director of publications. "You may have to offer nighttime child-care providers, who watch kids while they sleep," he says. "And you may have to be much more creative in terms of scheduling."

2) Self-Service HR
Many administrative tasks, such as processing payroll, handling benefits and managing retirement plans, are already being automated, leading to huge cost savings-as high as 80%. What's new and noteworthy is how HR automation is incorporating a Web interface that will allow companies to provide self-service HR applications. General Motors is one pioneer, introducing a Web-based employee portal in 2000 that lets employees update their emergency contact information and enables managers to approve subordinates' pay raises. GM's total cost savings from self-service HR is in the millions. What's more, a recent white paper from Cedar eWorkplace Research Group indicates that self-service applications cut HR costs by 44%-80%. Such figures won't be ignored.

3) AI
Artificial intelligence is rapidly evolving. Software can already tell how a customer will behave and if a factory floor machine will fail. And such capabilities are only the beginning. Because AI can process enormous amounts of data and identify patterns and anomalies, it might be able to spot financial fraud by studying billions of transactions, says Pepperdine University business professor Owen P. Hall Jr. "AI will bring advances but also usher in ethical concerns," he says. Additionally, agents and bots-small bits of software-will be able to figure out how to make trucking fleets, machinery and network resources as efficient as possible using real-time information.

4) Unions Endure
Labor unions have to deal with tough odds-the Bush administration has done away with collective bargaining rights for many federal employees-and diminishing membership-their ranks declined from 20.1% of the labor force in 1983 to 13.2% in 2002. Additionally, union members lost 1.5 million jobs in the 1990s because of the U.S. manufacturing slowdown. But don't count on the demise of organized labor. "Unions have been doing a better job than ever," says Kate Bronfenbrenner, director of Labor Education Research at Cornell University. "It's just that the bar is a lot higher." Still, there are bright spots. Over half a million workers created new unions last year. And more pharmacists and physicians are expected to join unions in the next few years because of upheavals in the medical market. Also, on average, union members earn $150 a week more than non-union workers.

5) Workplace Discontent
For the past few years, employees have been grappling with many difficulties-including downsizing anxieties, declining benefits and retirement savings, longer hours and heavier workloads, often unaccompanied by promotions or raises. Even when the economy picks up, experts say, the widespread discontent and anger won't fade. In fact, only one-fourth of employees say they have bonded with employers and 40% feel stuck in their jobs, says Walker Information, an Indianapolis-based research firm. Walker vice president Marc Drizin says that employee loyalty stagnated even before the economy did, and this trend will likely persist. Companies that are able to counteract worker discontent by making staffers feel appreciated will acquire a key competitive advantage. Meanwhile, employers who don't address employee dissatisfaction will likely suffer recurring productivity drops, as skilled workers leave for better-paying positions during labor market recoveries.

6) Shared Workspace
Most employees working in cubicles may have to say goodbye to their spaces' partitions in the coming years. Office design is moving toward more common workspaces with private desk areas, particularly in creative industries, says Gervais Tompkin, a lead designer with the San Francisco-based Workplace Practices Group at Gensler Architecture, Design and Planning Worldwide. And, according to Tompkin, workforce managers will help reconcile workers' professional and personal needs with architects' vision. "When we analyze what makes our best designs successful and keeps those clients coming back to us, it is the active involvement of human resources managers early on in the process," he says.

7) Defined Benefit Plans
In the future, companies won't be able to attract talent without providing a defined benefit plan. Stewart Lawrence, a senior vice president of The Segal Company in New York, says that companies that don't offer retirement plans with guaranteed benefits will lose prospects to companies that do. While major firms such as Microsoft, Wal-Mart and Cisco Systems have been recruiting successfully without such defined benefit plans for the past few years, they won't be able to do so for long. As the labor force gets older and labor shortages worsen, Lawrence says, firms will be forced to provide retirement plans with a set minimum level of retirement income in order to draw quality job candidates.

8) Part-Time Telecommuting
By 2010, over half of U.S. wage earners will work more than two days a week outside the office, says the Sulzer Infrastructure Services firm in London. Currently, 28 million people "telecommute" under official company policies-up from only 4 million in 1990-and millions more "telework" unofficially one or more days a week. And this trend will gain momentum, as affordable broadband Internet access and mobile technologies become even more widely used, says Toni Kistner, managing editor of Net.Worker, a division of Network World magazine. "The technology has steamrolled ahead, making it cheaper and easier to work from anywhere," she says. But don't expect telecommuting to become a full-time phenomenon. As the economy recovers, companies may cut down their real estate and support office-sharing to allow for a flexible, part-time telecommuting schedule, but they won't eliminate offices altogether. "Some people need to come to the office to stay connected," says Kistner.

9) Severe Labor & Skill Shortage
The confluence of various trends-falling birth rates, aging baby boomers and anticipated economic growth-will produce a job surplus by 2010, experts say. According to the Bureau of Labor Statistics, 168 million jobs will be created by then, but the civilian labor force will only reach 158 million by 2010-translating to 10 million vacant positions. While many aging baby boomers will keep on working because of shrinking retirement savings, there won't be enough of them to occupy the millions of available positions, says
Roger Herman, a futurist focusing on workplace issues. And aside from a shortage of labor, there will also be a scarcity of skills. In fact, manufacturing, health care and several technical fields are already grappling with a lack of skilled, educated workers. This skills shortage will also affect other industries over the next 10-15 years as baby boomers retire. Among the fields expected to scramble for qualified workers are information technology and the global energy and electrical utility industries.

10) Attracting Older Workers
Over the next 17 years, the number of U.S. workers age 55 and above will increase by about 80%, to over 33 million, reports the Bureau of Labor Statistics. Because the workforce is aging, U.S. companies will have to start thinking about what older workers look for and how to attract them, says Deborah Russell, manager of Economic Security and Work at the American Association of Retired Persons (AARP). "Terms such as 'fast-paced, 'high-energy,' 'young,' and 'vital' are often signals to older workers that they need not apply," she says. AARP recommends the use of terms such as "experienced workers" and "age-diverse" to encourage older recruits.

11) Outsourcing
The HR outsourcing business is expanding rapidly. In 2002, the market for human resources management outsourcing was $61.2 billion worldwide-a figure that's expected to grow by 11% annually, to $103.3 billion by 2007. And the one-stop shopping market will increase even faster, as companies abandon the piecemeal approach and outsource a bundle of different HR management services in a single contract. According to industry analyst Marc Pramuk of IDC in Massachusetts, U.S. companies offering packaged end-to-end services generated $6 billion in sales last year. And in five years, sales will increase by more than two-fold, reaching $15.4 billion, he says, a healthy annual growth rate of 21%.

12) More Freelancers & Consultants
Companies will likely use more freelance contractors and consultants in the future, as outsourcing becomes even more popular as a way to contain costs and improve flexibility. Currently, about 30 million Americans are already self-employed. In the coming years, corporate workplaces will employ a constantly changing combination of staffers and freelancers, predicts Dan Pink, who wrote the 2001 book Free Agent Nation, "to the point where it will become difficult to distinguish one from the other." This may usher in a new way of thinking. Instead of focusing on retention and career development, firms may emphasize building relationships with self-managing workers who take on various positions with greater freedom. "Companies may not be hiring people for jobs," says Pink. "Instead, they may be saying, 'We definitely want this person around for 10 years to accomplish these particular tasks, and after that, we'll see.'"

13) No More "Women's Work"
The number of women securing four-year college degrees rose to 640,000 in 1999 while the number of men earning four-year college degrees dropped to about 500,000 that year. Indeed, women are becoming more educated and acquiring higher positions, and this trend will only accelerate in the coming years, says John A. Challenger, CEO of international outplacement firm Challenger, Gray & Christmas, Inc. Women "will make further inroads into management and exec ranks, and the workforce will have to create an environment where a balance between work and home life is more valued," he says. "Temporary and part-time work and job sharing will be more common." Women who leave the labor force temporarily will have more job opportunities when they return. Concurrently, more men will take on "women's jobs" like nursing and teaching, says Challenger. As a result, he expects that "the line between men's and women's work will blur and fade."

14) Balancing Security and Privacy
Security concerns are more pressing than ever. At the same time, technology is rapidly advancing, giving those who manage company and government computer networks more sophisticated ways to track employees' activities. Many organizations are now starting to use cameras, keystroke logging, biometric devices and network monitoring, raising privacy concerns. "Increasingly, companies are realizing that security is not an option, it's a basic requirement," says Alan Brill, senior managing director at security
consulting firm Kroll Inc., New York. And in the coming years, surveillance will get even more advanced, as data encryption becomes standard and data-mining techniques may be able to identify potential problems through pattern analysis.

15) Universal Health Care
Health care costs are skyrocketing, and both employers and employees are paying an increasingly bigger portion of the cost. Additionally, a rapidly rising number of Americans-both employed and unemployed-do not have insurance. Most people agree that our health care system will undergo a major upheaval in the next 10 years. Jeffrey Pfeffer, professor of organizational behavior in the Graduate School of Business at Stanford University, predicts that we will adopt some form of universal health care system in the future. In fact, he points out, the U.S. is the only industrialized country where health care availability is employment-based. He says, "In other countries, access to health care is a fundamental human right."

Reprinted from Thomas Register - Industry. Answers. Results.