As 2007 comes to a close, it’s always interesting to peer into the crystal ball for a glimpse of what 2008 might hold.  In my opinion, 2008 will be “The Year of Shifting Priorities”, with fundamental changes occurring that will set the tone for the next two to three years.  Here they are:  Prediction 1 - The Beginning of the Employee Power Shift

With Baby Boomers starting to contemplate either partial or full retirement, Gen Y’ers questioning personal opportunity for growth and fulfillment, the “sandwich generation” caring for both elderly parents and children, and the leadership gap continuing to grow, I see 2008 as the year of a pendulum swing back in favor of the employee.  Employers are already feeling the talent crunch, with demographic analysis predicting a shortage across a large number of both blue and white collar jobs.  Employee loyalty is a thing of the past, with increasing competition for talent making job hopping not only easy, but the mainstay of positions in high demand.  Just look at the bonuses the military is promising as an example of this shift in action, a trend that will continue to grow well beyond ‘08.               

Prediction 2 - A Major HRO Provider Will Divest

This market is wrought with financial difficulties and I believe investors are losing patience with promises of predictability and profitability in outlying years.  Although many have anticipated the demise of certain HR Outsourcing vendors for some time, I believe that at least one vendor - either Hewitt or Convergys - is likely to divest their HRO assets in 2008.  Hewitt’s HRO business is dragging both top and bottom line revenues when compared with their traditional lines of business.  The decision to report revenues separately provides the  transparency necessary for investors and analysts to demand action beyond contract normalization and selective net-new pursuits.  At Convergys, financial pressures led their HRO business to lay off all marketing and analyst personnel, in addition to forcing product management into operational deal teams.  The leads one to conclude that an effort to make their existing clientele perform properly will supersede any investment in innovation and market communications.  The real question is who would buy these assets, with the offshore providers as likely targets.                         

Prediction 3 - HR Will (Still) Not Have a Seat at the Table

Like Toby on NBC’s The Office, HR continues to have a bad name in the eyes of business units, managers and employees.  Often viewed as either enforcers, legal risk mitigators or transactors, the human resources department is not the first place business leaders turn to for advice and guidance in meeting strategic goals and objectives.  They are generally perceived to lack basic business acumen (root cause analysis, business case skills, comparative analytics, etc.) despite years of trying to shift internal and external perception.  I believe this is a make-or-break year for HR.  If consistent, demonstrable examples of strategic value add do not break the glass ceiling in 2008, we will see the continued absorption of HR responsibilities into legal, finance, IT and outsourced service providers, effectively resurrecting the “personnel department” of old.                       

Prediction 4 - HR Vendor Scrutiny Will Increase

With so much pressure on HR executives to perform, a cascading effect of increased expectations will fall on those vendors who provide a litany of third-party products and services.  There are over 1,650 providers of HR solutions in the United States alone.  Codependency on service providers will only increase with cost pressures, and HR and procurement departments will no longer be able to manage hundreds of disparate vendors.  Sustainability, performance, return on investment and lower total cost of ownership will drive buying decisions in 2008 and beyond.  So vendors, be prepared to open yourself more fully to the inscrutable eye of increased analysis.  HR cannot afford your failure and desperately needs your success.                       

I’m not trying to sound a premature alarm, but ever shifting priorities will force employees, employers, analysts, investors and suppliers to constantly reassess their respective value-add, opportunities for success and potential for growth.  Let’s keep the conversation going in 2008, and happy new year! 

(posted by Inflexion’s Shannon Flumerfelt)

It is somewhat unpredictable how and where one makes sense of things within a moment of consideration, especially in the midst of doing something else. 

For instance, as I was running this morning, my MP3 player kicked out a song.  As the song drew me in (and with the help of exercise-induced endorphins), I started to think about the future of the workforce.  According to modern folk singer, Jewel, “There is a difference between dreaming and pretending.”   As I listened to Jewel, I thought about a recent American Society for Training and Development (ASTD) event where I participated as panelist.  Through the panel discussion, ASTD members were working hard to make sense of the training issues of workforce of the future.   They were not interested in “pretending” or maintaining irrelevant approaches to employee learning and development.  Rather, they wanted to proactively understand best practice, identify emerging trends and internalize the predictions of futurists to strategically position their organizations for a distinct advantage.  In other words, they wanted to engage in “dreaming”.

For the dreamers, the picture of the future workforce is clearly described in the Rand Labor and Population Report (prepared for the US Department of Labor), entitled, The 21^st Century at Work:  Forces Shaping the Future Workforce and Workplace in the United States.  In short, the concerns expressed in this report attacks this so-called “pretending” as the precursor to economic turmoil and the demise of the workforce in the United States.  To understand what should be done, Rand describes that there are significant emerging differences between the present and future workforce.   Among others, two areas requiring critical change include: 

-The Key Characteristics of the Workforce: 

There will be a need for increasing skill, higher educational attainment and more minority representation in the workforce driven by the rapid pace of technological change and related market growth.

-The Employee/Employer Relationship: 

The nature of work and the structure of jobs will change.  Employees will be more self-directed, accountable and autonomous.  Organizational structures will be more participative and less vertically integrated, more focused on emerging best organizational practices.  In turn, because specialization will be valued, new reward systems will enforce those competencies so that structural productivity boosts occur and improved business practices are maintained.

For those of us who wish say “goodbye to Alice in Wonderland” in workforce development, the Rand Report calls for a radical change in the content, methods and pedagogy of training: 

Increasingly, the system (the education and training system) is less relevant for the 21^st century workforce. . . .The new model for workforce education and training is predicated on the need for continuous learning throughout the working life, a process of lifelong learning involving training and retraining that continues well past initial entry into the labor market.  

To change this system is possible, as long as we understand there is a difference between dreaming and pretending.

Let’s keep the conversation (and dreaming) going.

With only two weeks left in the year, many organizations are experiencing what I like to refer to as the “December Effect”. Regardless of your employer’s fiscal calendar, this is something I’ve witnessed in nearly every industry, geography and position.  So if you are struggling this time of year and think you’re alone…believe me…you are not!The effect on:

• Sales: It’s Q4, and you’ve trained all of your customers and vendors to expect to buy from you at the best prices of the year.  Budgets are being flushed, ‘use it or lose it’ still exists, and you need to crush your December numbers to not only keep your job, but to earn your highly leveraged commission and perhaps even make President’s Club.  Time to get creative and forget what marketing and product management said the product can do; sell the future!
• Marketing: You think you’re coasting until the January launch of new products and services, but bottom line is that sales needs a new and innovative hook, pitch, white paper, piece of collateral and success story.  Sales is complaining that you didn’t generate enough qualified leads for the year and it looks like a bad December push is going to be blamed on you.
• Product Management:  ”The features aren’t selling”, says Sales leadership, and it’s all your fault (or so they’d have you believe).  Your specs were solid and you’re knee deep into the next major and minor release schedule, but the bottom line is that sales thinks you missed what the market truly wanted, so marketing can’t put a story together.  You need to be on every sales call and you begin to wonder why you’re not getting commission.  
• Finance: It’s calendar Q4, you worry what sales is promising the customers and vendors, and how in the hell can you possible recognize some of the revenue that’s been pushed through the funnel.  Global exchange rates are killing you and, on top of that, everyone wants to give a discount.  You documented the approval chain of command for anything beyond 15%, but no one’s paying attention to that now.  You better have your New Year’s Eve toast now because it’s 7×24 until January 2nd.
• IT: Systems are getting overloaded with spiky volumes of activity, and the online site isn’t exactly living up to expectations.  Customers are having trouble placing orders, customer service can’t seem to use the most basic technology, and with so many people in the field requiring remote support, you’re trying to pick your battles without losing control.  How come the hackers don’t take vacation?  You’re thinking that this really isn’t worth all the effort and you’d rather be working at a startup where you can control the environment.
• Customer Service: Today a customer was ‘accidentally disconnected’ because the yelling just got to be too much.  The odds of them being routed back to you are pretty slim so you don’t feel too bad.  Why are people so angry?  Don’t they understand that you can only do what the system allows you to do?  And boy are the systems slow this time of year.  You secretly hope for an escalation since the manager has cookies at her desk.
• Fulfillment: Does no one own a calendar?  The FedEx, UPS and USPS guys are nearly in tears and some client paid a lot of extra cash to get this thing in time for Christmas.  Finance is breathing down your neck about ‘Freight on Board’ for revenue recognition, sales promised to fill a huge order on backlogged items and you’re starting to forget what your kids look like.  
• HR: Benefits enrollment is wrapping up and no one read the instructions (or so it seems).  You’re supposed to be doing ‘workforce planning’ for 2008 but you barely have the data necessary to fill open positions.  And yes, the vacation policy is documented on the employee portal so please stop calling the HR help desk.  And no, we do not rollover unused vacation hours, so managers continue to promise undocumented vacation days so we don’t have a mass exodus on December 31st.  Why did we serve alcohol at the holiday party?
• Legal: Great holiday party, but what idiot approved the open bar (and worse, the open mic)!  Hopefully you can settle some of these out of court.  And didn’t you spend time at the last sales meeting training the reps on the terms and conditions in our standard contract?  Ha - standard contract - nice try.  But seriously, can’t reps look up what ‘indemnification’ means instead of putting you on the phone every two seconds?  It’s costing a fortune on external counsel.  Your mom was right; you should have been a doctor.

Let’s keep the conversation (and sanity) going.

A colleague and I were recently lamenting over the raw defects that plague today’s hiring practices.  The result of our consternation - my first guest blogger.  Phil Rogers is the president and founder of New Zealand Business Development, a firm that helps NZ-based firms develop in the US market.  I’ve known Phil for a number of years and think you’ll benefit from his ideas.  Enjoy!  

“Whether you see it as marketing hype, a looming concern or a current reality, it’s impossible to ignore the demographic trends facing the global marketplace.  The dire nature of these events is dramatized in this YouTube video created by Ira Wolfe:

Despite the narrowing of the addressable population, there could be an innovation upside to a ‘Future of Talent’ shortages.

Currently, hiring managers seek a guaranteed win based on a narrowly defined candidate profile.  This approach encourages talent to specialize in both industry and function.  In the same way that too much Six Sigma killed innovation at 3M, the application of defect management techniques in recruiting processes are creating a less flexible workforce.  Those individuals seeking to change industries and functions are often ignored relative to the presumably safe and predictable industry lifers.  Given this narrowing criteria, would Lou Gertzner be offered the CEO role at IBM today?  Moreover, does industry specialization increase turnover as employees play off one competitor against another?

A talent shortage might force a change.  The learning capability and willingness to take risk shown by those that have moved between industries and functions is highly valuable.  Does a talent shortage mean that a future profile might be ‘the ability to improve process’ or the ‘ability to grow revenues’?  Is it possible that hiring for well toned general capabilities, with the right support structures, would actually deliver better business outcomes?  The economic costs of an inflexible workforce are high, but the cost of lost opportunities resulting from a lack of new perspectives and ideas is much higher.  A talent shortage might lead to a new era in innovation the same way that 3M’s labs are now coming back to life.  This places an ironic burden on CEOs, given that turnover in their own ranks is roughly 15% each year.”

Let’s keep the conversation going.