Action Items

42 trends affecting benefits, compensation, training, staffing and technology.

Jan 1, 2013

Health plan redesigns. Employers will continue to shift costs and decisionmaking to employees. Nationally, total premium costs per employee are expected to jump from $7,874 in 2007 to $11,188 in 2013, according to a 2012 analysis by consultancy Aon Hewitt.

Consumer-directed health plans. These plans, which typically include health reimbursement arrangements or health savings accounts, are now offered by 57 percent of employers as a plan option. That number will increase to 62 percent in 2013 and 71 percent through 2018, according to a 2012 survey by the Midwest Business Group on Health and The Benfield Group.

Wellness incentives. In 2009, 36 percent of U.S. employers offered rewards for individuals who participated in health management programs and activities, according to a 2012 survey by consultancy Towers Watson and the National Business Group on Health. That number rose to 61 percent in 2012, with another 21 percent planning to do so in 2013.

Rewards for health program completion. The highest cash total that can be earned by both employees and dependents in organizations surveyed by SHRM has increased by $100 during each of the last three years to $700 in 2012. In 2011, only 35 percent of employers required employees to complete a health management program or activity—as opposed to simply enrolling in a program—to receive rewards or avoid penalties. That figure increased to 44 percent in 2012, with another 26 percent planning to require program completion in 2013.

Premium discounts. SHRM research shows that employers offering health care premium discounts for completing annual health risk assessments rose from 11 percent in 2008 to 21 percent in 2012, while the percentage of employers offering discounts for not using tobacco products increased from 8 percent in 2008 to 20 percent in 2012.

401(k) plan redesigns. Changes intended to increase participation and savings continue to grow in popularity. Continuing the trend of the past few years, automatic enrollment was provided by 45.9 percent of defined contribution plans in 2012, up from 41.8 in 2010. Automatic escalation— typically increasing contribution levels annually unless the participant opts out—was used by 71 percent of employers that provide auto enrollment, up from 59 percent in 2010 and 50 percent in 2009.

Paid time off. Paid-time-off plans, which combine traditional vacation time, sick leave and personal days in one plan, were offered by 51 percent of organizations in 2012, up from 42 percent in 2009. Their use is expected to rise.


Social media use. Social media tools will be used by corporations not just for recruiting and sourcing but also to allow employees to engage in "social collaboration" on Facebook-like sites by sharing files, spreadsheets, images, documents, videos, to-do lists, slides, files and other documents.

Mobile access. Companies will continue to meet the desires of their employees by allowing them to bring their own devices to work. Workers will be able to use tablets, smartphones and other hand-held devices. Ventana Research reports that nearly 70 percent of organizations are giving employees smartphones for work purposes.

HR apps. With more human resource professionals using mobile devices as their go-to communication tools, there will be more HR applications than ever. While most apps once were concentrated in the recruiting arena, expect more tools in 2013 for analytics, training (including games), time and attendance tracking, performance feedback, employee recognition, and more.

Employee networks. Companies will tap employees' connections to recruit talent, and recruiters will seek referrals from among employees' Facebook friends and LinkedIn networks. Employers will deploy software that scours Twitter, blogs and other publicly available information to find candidates that fit their corporations.

"Big data" and business analytics. Getting a handle on "big data" will continue to be a huge challenge for HR professionals charged with storing and analyzing talent and workforce management information, as well as social media and business performance data and payroll and benefits information. Some experts say the ability to perform quantitative data analyses and deliver relevant workforce data on metrics are some of the competencies that line leaders will search for among HR professionals.

Cloud computing. This trend will remain strong due to the fact that software- as-a-service solutions are becoming the preferred technological solution for HR, thanks to management ease and ubiquitous access.

Telework. Studies such as the one done by Citrix in late 2012 reveal that by 2020, organizations worldwide are set to reduce office space by almost one-fifth. The workplace of the future will provide just seven desks for every 10 workers, with each person accessing the corporate information technology network from an average of six different computing devices, the study suggests. The figure for 2020 forecasts as few as six desks for every 10 workers in the United States, the United Kingdom, Singapore and the Netherlands.


Tax and fiscal uncertainty. Questions about the U.S. elections and the future of health care reform have been answered, yet uncertainty remains about how Washington will resolve tax and fiscal issues. Employers will have to monitor events and adjust.

"New normal" for salary budgets. Salary increases are unlikely to return to pre-recession levels. Following the past three recessions, Towers Watson data show that salary increase budgets settled into lower levels than when the recessions began. Signs point to the same course for 2013.

Uniform salary increases. Projections call for salary increases of 3 percent—give or take a few tenths of a percent—for executives, managers, and exempt and nonexempt employees.

Employee expectations. If the U.S. economy continues to recover, employees may begin looking for base salary increases and larger incentives.

Differentiation. As a result of flat budgets, compensation professionals will need to differentiate based on workers' importance to the company, performance, and talent or skills scarcity.

Different industries, different pay. More than ever, compensation differs significantly by industry. Technology companies still pay a premium to keep talent while competing for talent against their competitors. Companies in industries experiencing slower growth are likely to keep pay levels steady.

Pay for performance. More employers will focus on results and behaviors. They will reward drivers of financial performance—and not just end results—to build sustainable long-term performance.

Salary vs. variable pay. Use of variable pay will continue to grow. According to WorldatWork's 2012 Compensation Programs and Practices study, 84 percent of responding companies currently award variable pay. Use of recognition awards and bonuses will continue to increase, while use of individual incentives is expected to decline.

Compensation tied to metrics. More compensation professionals will measure the levels of engagement fostered by rewards programs.

Compliance. Pressure will grow for employers to comply with government regulations while satisfying corporate governance regulations.

Taxes. If income taxes increase for higher-income individuals, employers will look for more tax-efficient compensation vehicles. Deferred compensation arrangements could become more popular.

Employee stock ownership. Employees who own company stock will face new tax questions if dividend and capital gains tax rates increase. Higher income tax and capital gains rates could affect demand for certain companies' stock, adversely impacting their stock prices and the value of employees' holdings.


Collaboration. Globalization, social networking and cloud computing will continue to drive the creation of new, more-sophisticated forms of collaboration and knowledge management systems that will be needed to improve individual and organizational performance. Think communities of practice on steroids.

Content design. Training events and content design will be adapted to be more accessible anywhere, anytime, to keep pace with the surge in mobile technologies and to better support self-directed learning.

Credentialing. There will be increased emphasis on credentialing, or establishing the legitimacy and portability of the qualifications of licensed professionals. More work-like experiences will be examined for credentialing purposes.

Expanded responsibilities. HR professionals will need to increase their organizational development competence as they will be relied on more to help support organizational and employee development initiatives, such as change management and management development programs.

Employee development. Learning will become more self-directed, tied to more self-directed career advancement that allows employees to use the depth and breadth of the knowledge and skills they have to offer—on the job or outside of it.

Evaluation and measurement. Chief learning officers and training directors will need to increase their business acumen and analytic competencies to more effectively use "big data" and their learning management systems' evaluative capabilities to clearly show the return on training investment and its impact on the bottom line.

Leadership development. Learning for senior leaders will shift from training events designed to hone functional, managerial skills to nonevent-based, entrepreneurial learning designed to build their capacity to synthesize what they already know and apply it to systems, processes and products their companies will need to grow in the future.

Organizational design. More organizations will adopt hybrid designs, such as functional and matrix blends, that are more flexible and agile to meet future workforce and global market demands.


Contingent workforce. The contingent staffing industry will continue to expand as more companies integrate temporary staffing management models as permanent components to their overall talent management strategies.

Employer branding and​ candidate experience. As competition for top talent heats up, employers will have to spitshine their employer brands once again and create much more candidate-friendly employment sites that offer applicants a positive recruitment experience. Companies will need to adopt strong candidate relationship management practices to attract the talent they want immediately and to help them build a solid base for filling forecasted future talent needs.

Executive recruitment. More companies will bring this recruitment function back in-house as they increase their focus on and management of leadership development programs and succession planning.

Recruiter development. Recruiters looking to step up their game or move up in the career ladder will need to build competencies in "big data" and labor market analyses to provide value-added support for creating, implementing and evaluating their organization's comprehensive workforce planning initiatives.

Recruitment process outsourcing. The recruitment process outsourcing industry will continue to grow rapidly as the industry's leaders pursue new business opportunities that are increasing among midsize organizations and companies expanding internationally.

Recruitment technology. Social media and recruitment-focused mobile technologies will be used to build stronger, longer relationships with passive job candidates. In addition, greater use of tools such as video interviewing and online skills assessments will continue to boost efficiencies and reduce the costs of applicant processing and screening.

Workforce analytics. Standard recruiting metrics will still be tracked closely to help balance cost-containment with immediate staffing needs. However, use of predictive analytic models—which help companies forecast their future staffing needs compared with labor market availability— will continue to grow. And companies whose HR professionals most effectively use workforce analytics to create and drive recruitment strategies will gain a distinct advantage over competitors in pursuing top talent.

Workforce readiness. Higher education and technical training for the skills employers need will continue to be important. To ensure that they have skilled workers, employers will continue to partner with academic and government entities to provide the training the local labor force needs to fill available industry jobs.

The following SHRM staff members contributed to this article: John R. Anderson Jr.; Erin Binney; Nancy M. Davis; Gretchen Kraft; Stephen Miller, CEBS; Theresa Minton-Eversole; Desda Moss; Leon Rubis; John F. Scorza; and Aliah Wright. Other contributors included freelance writer Joanne Sammer.


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