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Forbes has long been known as an economic prognosticator and, in his vision, HR will be at the epicenter of the change needed to turn the global economy around.
During his keynote speech for the June 27 opening general session of the Society for Human Resource Management's (SHRM's) 62nd Annual Conference & Exposition here, Forbes told the audience of HR professionals that “your task and your job will become more important over the next two to four years.”
Forbes, president and CEO of Forbes Inc. and editor-in-chief of Forbes magazine, provided a glimpse into the future of the U.S. and world economy. He told the audience that he was confident that the economy would recover, and he offered several factors to watch in measuring the progress of the economy.
He said that the U.S. government’s monetary policy was one of the best indicators for the future of the economic recovery. “You cannot have a sustained recovery with a weak dollar,” he said.
Forbes said that the Federal Reserve made a grave error by falsely keeping interest rates low and flooding the economy with money.
“Think of the economy as a vehicle: Too little fuel, the engine cuts out,” said Forbes, who was recovering from back surgery and wore a neck brace. “Too much fuel and you flood the engine, and it stalls out. The trick is getting just the right amount of fuel to run the economy efficiently.”
He said that the commodity and then real estate market bubbles between 1990 and 2007 were the prime examples of economic bubbles. Excess money poured into those bubbles and eventually they popped, he said.
“In real estate, financial institutions came up with a new mortgage and the novel idea that you don’t need to have an income to borrow money,” he said.
The ensuing economic collapse and the panic it generated was understandable, but it was not the end of the world.
“The end of the world will only happen once,” Forbes said. “And this is not it.”
He said that several challenges to economic and business growth must be overcome and that HR has a role to play in getting over those hurdles. He said that changes to government regulations must be made. He singled out the cumbersome federal tax code as being in dire need of reform. Forbes also predicted that changes to regulations in laws such as the Fair Labor Standards Act and other workplace-related laws would be coming in the next few years, and that input from HR on these issues was critical.
“HR has a place at the table, and you have a chance to be the leading edge of our economic recovery,” he said.
One of the critical issues, in which HR will play a major role is health care reform, he told the audience. According to Forbes, the health care reform law enacted in March is just the first step, and that HR needed to prepare for more regulations, changes to the law and amendments.
“This thing is just getting started and isn’t over by a long shot,” he said.
Forbes said that the real problem with health care in the United States is that the consumer has lost control of health care services.
“Everything in our health care system is by third party,” he said. “By providing consumers more controls, you will see the costs decrease and access improve.”
He said that he believes eventually the U.S. will get it right, but that it will take everyone working together—led by HR professionals.
“The bottom line is that your task will be more challenging. But I believe we will get it right,” he said. “We’ve done it before, and we will do it again.”
Bill Leonard is a senior writer for SHRM.
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