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The Future of Work

These Will Be The Top 5 Business Challenges Of 2016

Some of these changes have been in progress for years, but this year may end up being the most transformative year for work yet.

[Source photos: Kaboompics, Flickr user Angelo Juan Ramos]

The workplace is constantly changing, but 2016 is poised to be a particularly transformative year.

New government regulations, changing definitions of basic words like "employee," "manager," and "workplace," an increased focus on workplace diversity, and new technologies will radically change many aspects of day-to-day business operations over the next 12 months.

While some of these changes have been in progress for years, others will come rapidly. In the coming months, organizations will be challenged with keeping ahead of these changes, or suffer the consequences of falling behind.

Increased Diversity And Inclusion

While diversity has been a prominent workplace consideration for generations, a number of new challenges will force employers to review their approach. In fact, recent research suggests business incentives for those who facilitate an inclusive workplace.

A recent survey of 454 global organizations with more than $750 million in revenue published by Bersin by Deloitte found that organizations that implement diversity and inclusion policies perform better than those that don’t, earning 2.3 times higher cash flow per employee over a three-year period.

Related: The Recruiting Platform That Facebook Uses To Tackle Its Diversity Problem

"Now there's proof, a lot of proof, that being inclusive as a company does pay off; it makes you a better performing company," says Josh Bersin, principal and founder of Bersin by Deloitte. "It's moving out of HR and into a business-level issue, where CEOs are worried about it, and CEOs are setting targets, and CEOs are looking at things like unconscious bias training and holding themselves accountable."

Paid Leave

While the United States has been slow to join the rest of the developed world in mandating paid parental leave, forward-thinking companies, especially those battling for talent, took some bold steps in 2015, and soon others will be forced to follow suit.

"Everybody from Microsoft to Google to Facebook, the big guys, took the lead in providing either maternity or paternity leave," says John Swanciger, the CEO of Manta, a small business online resource and community. "That is really putting the focus on what type of paid leave workplaces, small or large, should provide to stay competitive."

As the federal government similarly struggles to pass a comprehensive sick leave policy, new regulations are continually being implemented at other levels of government.

Related: Why The U.S. Will Finally Do Something About Paid Parental Leave This Year

"There's been a number of paid sick leave laws that continue to be passed at the state and local level; there's almost a half-dozen states that have it, and a new municipality comes out with it every day," says Beth Zoller, the legal editor of XpertHR, an online HR resource. "It's something employers have to stay on top of, because there are a lot of requirements."

New Management Dynamics

As a result of a competitive hiring landscape, an increase in turnover rates, and advancements in employee management software, the dynamic between employees and managers is poised to shift dramatically in the coming year.

"We're beginning to create an always-on feedback environment so that employees can provide feedback, anonymous or not, on how well they like their workplace, their manager or their job, and HR can quickly diagnose those problems," says Bersin. "One of the offshoots of that is a lot of companies are telling me they're starting to evaluate managers based on feedback from employees. Managers used to give employees a performance appraisal, but now it's going in reverse."

Changing Employee Classifications

With the rise of remote, contingent, and freelance employees, 2016 will see a continuation of the ongoing struggle to properly classify those workers without risking legal repercussions.

"In recent years, both federal and state departments of labor have increasingly pursued employers who are misclassifying employees and attempting to call their employees independent contractors, when in fact they are employees, and should be entitled to the rights and benefits of employees," says Zoller.

Related: This Is What The State Of Freelancing In The U.S. Means For The Future Of Work

To help quell the confusion and potential liability, the U.S. Department of Labor recommended changes to update the definition of employer and employee.

"There's a proposed bill to create a new category of worker, which is a freelance worker that's sort of a semi-contingent worker, and that would create a category of benefits that employers would have to provide," says Bersin. "That's something that's going to change this year. I think there's going to be some legal relief to define what this class of worker is. That will be a hot topic in 2016."

Redesigning The Physical Workplace

As the word "employee" has become harder to define, so too has the word "workplace," thanks in part to those contingent workers, remote employees, and a slew of new technologies that have made physical distance less of a factor.

"One of the changes that I'm seeing is more of a virtual workforce, and a workforce that's more adaptable and more global," says Harry Osle, the global HR solutions practice leader for The Hackett Group. "What does that mean for HR? They need to be more adaptable, and they need to be more focused on driving innovation from a technology perspective to support that workforce."

Related: 8 Office Design Trends For 2016

Bersin adds that this trend toward more adaptable, virtual, and global workforces will result in a radical change in the physical office layout.

"What's happening in companies is they're trying to figure out how to radically redesign their entire workplace to adapt to the always-on worker, and that's why there's a massive growth of open offices and companies that offer temporary work locations," he says. "It's really becoming mainstream, and most companies are confused as to how to do it, so design firms are playing a big part in this."

What does the future of innovation look like? Find out more here: