Health Care, Economic Issues Top HR Concerns, SHRM Report Shows

By Theresa Minton-Eversole Feb 14, 2011

Continuing increases in U.S. health care costs, and global and domestic economic and labor market conditions, topped the list of trends that HR professionals identified as major challenges that they are grappling with, according to a report released Feb. 14, 2011, by the Society for Human Resource Management (SHRM). Also cited were growing regulatory complexity and the aging workforce segment poised for retirement within the next five to 10 years.

The SHRM Workplace Forecast is published every two years and is based on a survey of HR professionals’ views of key issues that they believe will affect the workplace in the coming years. The report is divided into five broad sections, covering demographics and society, economics and employment, global issues, public policy, and science and technology.

2011 Results: Recession, New Legislation Influences

The rise of health care costs topped the list of most important trends. In fact, HR professionals identified the passage of federal health care reform legislation as the second most important trend affecting the workplace and HR professionals, behind health costs.

“Not only is the cost of health care one of their most pressing concerns, they are under pressure from their organizations’ leadership to explain the implications of the new law and to make recommendations about how their business should respond,” said Jennifer Schramm, GPHR, author of the report and SHRM’s manager of workplace trends and forecasting.


Millions of Baby Boomers are approaching
retirement age,
butmany are unprepared
financially to stop working. HR professionals
will deal with the implications of both those who
decide to stay
on the job and those who​
choose to retire

Jennifer Schramm, GPHR


The changes in demographic and social conditions will factor heavily into HR professionals’ strategies for the foreseeable future, too. “Millions of Baby Boomers are approaching retirement age, but many are unprepared financially to stop working,” Schramm wrote. “HR professionals will deal with the implications of both those who decide to stay on the job—thus removing opportunities for younger workers to enter the fold—and those who choose to retire and perhaps take with them a wealth of knowledge when they leave their companies.”

The impending retirement of Baby Boomers might explain why many HR professionals are troubled about a skills shortage in the U.S. labor force. Even though many older workers are expected to stay on the job longer than they had planned, millions will leave the labor force in the near future, the report states. The U.S. Bureau of Labor Statistics says job openings stemming from “replacement needs”—those that occur when workers retire or otherwise leave their occupations—are projected to be more than double the job openings that are created based on economic growth from 2008 to 2018. What needs to be determined is exactly where these retirements will occur and if the supply of young workers will match specific industries.

Smaller World, Bigger Problems

Skilled worker shortages are not just an issue in the U.S. The closer integration of world markets has a direct impact on the movement of skills and talent, and when one national economy faces difficulties, other economies feel the impact as well.

“If the outcome of the opening of markets around the world could be summed up in one word, it might well be ‘competition,’ ” Schramm said. “As more players enter the global playing field, the level of competition for resources, markets and the best possible pool of talent to build a workforce inevitably increases.”

In other research conducted by SHRM, particularly a post-recession hiring poll from the spring of 2010, a majority of responding U.S. companies that planned to hire in 2010 said they expected to encounter some degree of difficulty in finding qualified individuals for those positions. HR professionals say that more resources are being channeled toward training and development to boost the skills of their employees and that their companies are offering employment options designed to attract and retain young workers.

HR professionals—many of whom say their company’s contracted workforce has become the new operational norm—reported that their companies are increasing expectations of employee productivity and are putting more emphasis on succession planning and employee readiness to safeguard against future economic downturns.

It can be challenging to create a common organizational culture in global companies and among multinational organizations, but this is precisely what many HR professionals are being asked to do. As HR professionals seek to create a shared sense of values and a strong, unified employer brand that spans countries and cultures, inevitably they must build stronger intercultural skills and learn how to leverage the growing diversity of their workforce to help understand and meet changing customer needs.

Finally, technology advancements have streamlined many HR transactional duties, expanded reliance on e-learning and helped to narrow geographic barriers to doing business. But they have also led to increased demand for HR professionals to collect and analyze more-complex metrics and measurements and increased vulnerabilities of business technology and intellectual property to attack or disaster.

HR’s Response to Challenges

The survey asks HR professionals what actions they and their organizations are taking or are planning to take to address these trends, changes and challenges. Regarding the health care reform legislation, actions HR professionals say they are taking or plan to take include:

  • Working with legal and benefits counsel to help their organizations understand the new law’s implications.
  • Sending HR staff to classes to learn details of the law.
  • Partnering with health benefits providers to design health care plans that will include areas affected by the law.
  • Developing health care cost analysis for the organization’s leaders.
  • Analyzing the short-term and long-term financial impact of the law.

HR professionals say their companies will continue to increase business research and development in emerging economies and will continue development and use of e-learning and Internet recruiting. Most say they have implemented policies to protect data from identity theft. In spite of the recession, many reported that they are or will be investing more in training and development to boost skills.

Theresa Minton-Eversole is an online editor/manager for SHRM.​


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