2009: Year of Change For HR Professionals, Business Owners

With the new year and a new administration well under way, 2009 promises to be a year of change for business owners and HR professionals. And the new administration doesn't appear to be wasting any time getting started.

 

 

In addition to the Lilly Ledbetter Fair Pay Act, other legislation and trends loom large on the horizon for HR professionals and business owners in 2009. Game-changing labor and employment legislation, rising healthcare costs, an aging workforce, and an increased focus on the need for employee retention all promise to make this coming year a busy one for HR departments.

 

But more than any other issue or trend this year, experts say the current economic conditions likely will contribute to the biggest changes in coming months. In fact, according to a recent HR.BLR.com survey, 69 percent of HR professionals polled said the troubled economy will have the most impact on HR in the coming year.

 

According to a recent survey by the National Association for Business Economics (NABE), it is expected that 2009 will be marred by the the worst business conditions in the United States since the organization began surveying market conditions in 1982.

 

Based on the findings, released Monday, 39 percent of organizations say they anticipate job reductions through attrition or layoffs during the next six months, compared to 32 percent from October's survey.

 

But despite the doom-and-gloom headlines and looming economic concerns, 2009 can still be a good year for HR professionals and business owners if they focus on the right things, said Jim Thelen, a Lansing-based labor and employment attorney for Miller Canfield and past president of the Human Resource Management Association of Mid-Michigan.

 

“I think what can make the year good is a healthy focus on compliance,” Thelen said, “and an equally focused attention on employee morale, which of course, has the outcome of enhancing productivity and efficiency.”

Here are a few trends that Thelen and a couple of other HR professionals say employers need to keep an eye on in coming months:

An increased focus on Washington. With the new administration in place, HR professionals and business owners will “have to turn their attention to Washington to see what's going to happen.” New Family and Medical Leave Act (FMLA) regulations went into effect in mid-January. And there are other pieces of legislation, like the Employee Free Choice Act, which would have a big impact on businesses, he said. As an overall trend, there's going to be an increasing focus on legal compliance, what changes are coming, and what they mean for businesses.

A shrinking workforce. With economic conditions as they are, “I think we'll continue to see more layoffs,” Thelen said. And coupled with more corporate downsizing, HR professionals likely will have to deal with more administrative issues and tasks surrounding layoffs in the coming year. For example, many employers will have to decide how to structure severance packages in a way that makes sense for their businesses and for employees. And as the corporate downsizing trend continues, HR professionals will experience more personnel issues tied to job anxiety and survivor's syndrome that often plague employees who remain after layoffs, he said.

Increased focus on employee retention and training. This year, companies likely will be doing less hiring and placing more focus on retaining and training existing employees, Thelen said. But to be effective, HR professionals will have to keep a finger on the pulse of the organization, said Dawn Haag-Hatterer, SPHR. Employee relations are going to be increasingly important in the next 12 to 18 months, said Haag-Hatterer, also a member of the Society for Human Resource Management (SHRM) Special Expertise Panel on Employee, Health, Safety, and Security. Financial stressors and other factors may be contributing to an increase in the number of disengaged employees right now. And ultimately, a lack of employee engagement can lead to individual and organizational performance issues. So HR professionals will have to stay alert to these issues and spend more time with operational managers to make sure they are not losing sight of what employees' needs are, she said.

More baby boomers leaving the workforce. When the market starts improving, businesses and HR professionals can expect to see an increase in the number of baby boomer retirements, said Antoinette Knechtges, SPHR, director for the Michigan Council of the Society for Human Resource Management, and lecturer for the management department at Eastern Michigan University's College of Business. The key for HR professionals and employers will be “capturing the organizational knowledge that they have so that we don't have the whole brain trust walk out the door.” In keeping with this trend and the increased focus on employee retention, it is likely that more HR professionals and employers will explore alternatives like phased retirement programs. Such programs allow retirement-age employees to enjoy more flexibility with fewer work hours per week and employers to continue to benefit from older employees' years of experience in the workplace through mentoring programs and other knowledge-transfer solutions. In some cases, however, older employees are opting out of retirement and staying in the workforce longer due to financial concerns, Haag-Hatterer said.

Rising healthcare costs. The expected healthcare benefit cost increase for 2009 is about 5.7 percent, said Thelen, citing SHRM statistics. With this expected increase, employers will get more aggressive when it comes to trimming healthcare costs. Companies will continue to institute more wellness programs and other incentives to encourage employees to adopt more healthy lifestyles and habits. And increasingly, employers will continue to emphasize consumer-driven healthcare plans that require employees to play a larger role in keeping healthcare costs down, he said. In addition, employees likely will have to start paying higher deductibles, copayments, and more initial out-of-pocket expenses before coverage kicks in.

Increased litigation. Economic downturns often bring an increase in litigation from employees who are laid off or terminated—particularly if they experience difficulties in finding the next job, Thelen said. So employers may experience an increase in claims this year—particularly those related to layoffs. For example, employees might be more likely to file claims if they feel that their age or other factor played a part in their employer's decision to lay them off.

Change in traditional work arrangements. Going forward, it is expected that many companies will continue providing employees with alternative work arrangements like telecommuting opportunities, Knechtges said. Employers also are likely to continue relying on more part-time and contingent workers to help manage staffing needs and demands related to ups and downs in business. Others will turn to retirees to help fill in the gaps when it comes to staffing needs. And while many companies will bring certain work back in house, it is likely that some jobs will be completely outsourced, she said.

Increased focus on financial education. Given existing economic conditions, many employers now are playing a larger role in providing employees with financial education, Thelen said. Many employers are now offering more seminars and services to help employees make the right investment, benefit, and financial choices. This trend is likely to continue in 2009, he said.