Though 2016 may have felt like a tumultuous year, a variety of factors are poised to ripple through 2017, further disrupting business as usual.
That’s according to Brian Kropp, the human resources practice leader for CEB. The best practice insight and technology company that works with 20,000 senior leaders at 10,000 organizations worldwide gathered and analyzed internal and external data to look at broader trends that will influence the way we work next year. Kropp says major changes in public policy, technology, and employee demands will shape the challenges faced by business leaders and employees in the year to come.
Among the key factors driving this change is one that stems from the 2008 financial crisis. Throughout the recovery period organizations of all shapes and sizes have had to learn how to do more with less, and are now unable to get much leaner.
“They’re in a situation now where they’re seeing limited top-line growth, it’s hard to pull more costs out of the system, but at the same time Wall Street and public markets are really expecting companies to continue to grow,” says Kropp. He says that the only way for most companies to continue growing is through significant changes in how they operate. Overall he says, “That’s the business environment and the business challenge companies are facing as we look into 2017.”
Within that new business environment Kropp identifies five ways work will change in 2017.
Whether Americans elect Donald Trump or Hillary Clinton as their next president, supporters on both sides believe that Washington will continue to be dysfunctional in the coming year. As a result, Kropp believes that private companies will step in and set the agenda for decisions and policies that are typically left to the political class.
For example, while the debate over $15 minimum wage rages on, individual companies have taken measures into their own hands, and are now implementing it themselves. As a result, Kropp suggests other companies will be forced to follow suit in order to remain competitive. “What’s likely to happen in 2017, as more and more companies go down that path of setting what that standard is, it will set a de facto social policy,” he said.
Kropp points to other examples, such as North Carolina’s controversial HB2 “bathroom bill.” It was met with pressure from private companies who threatened to take business out of the state. Likewise, many employers, such as Netflix, Ernst and Young and Coca Cola implemented their own paid parental leave policies ahead of federal or state mandated changes.
“That will have a bigger impact on social policy than what government can accomplish in a dysfunctional Washington,” says Kropp.
Though automation has been blamed for eliminating large numbers of blue-collar jobs, particularly in manufacturing, Kropp believes that in 2017 robots are coming for jobs once considered irreplaceable by machines, and at a much quicker pace.
Kropp points to wearable technologies such as heads up displays that are now being used by medical professionals as an example. If technology can provide information and guide surgeons through a procedure, they don’t need as many nurses, he says.
As another example, Kropp cites paralegals who spend much of their time sifting through cases and decisions to help lawyers position arguments and courtroom strategies. “With artificial intelligence scraping across all that information, they will have algorithms that start to predict what sort of argument would be most effective with this judge,” says Kropp, “When that happens, you don’t need paralegals anymore.”
Nine states will include recreational marijuana legislation on the ballot in November, but there’s really only one that Kropp says could change the game for many American employers, should the referendum pass.
“If California votes in favor of that, so many organizations have employees in California, or have an office in California,” he points out. “It’s going to shift from a few states being outliers to many more states, including the biggest state in the union, having legal marijuana, which forces it to be an issue for all organizations.”
Aside from implementing marijuana-related workforce policies, Kropp says organizations will also be forced to grapple with policies surrounding other substances, including pharmaceutical drugs, such as those intended for ADD and ADHD treatment.
“If there’s more legitimate use for pharmaceutical drugs, is it okay for a job candidate to be using that during an assessment test or not? Is that fair or unfair?” asks Kropp, adding that most organizations aren’t prepared to provide an answer.
On the first day of 2017 the SEC’s Pay Ratio Disclosure rules will go into effect, but they will reveal much more than the wage of the organization’s top earner. Kropp suggests that there will be little surprise in that regard, but there will be one major unintended consequence.
The new rules stipulate that public companies need to disclose the ratio of CEO pay to median employee salaries, which will reveal to many employees where they stack up in terms of compensation.
“As soon as that number comes out, 50% of your employees will now find out they are underpaid relative to the average, and that will have a huge impact on employee engagement, retention, motivation, the cost structure of the organization, and that is the much bigger issue,” says Kropp.
A recent study by PayScale suggests that those who are aware of their CEO’s compensation have little problem with it, but that a majority of those in the know receive above average compensation themselves. “Many employees will find out that they are paid on the bottom half of their company, when their manager has told them they’re well compensated,” he adds.
Yet while these tend to focus on women and underrepresented ethnic groups, Kropp says, “People and organizations are going to start to realize there’s an entire segment of the workforce that is being ignored in most of those initiatives, and those are people with intellectual disabilities.”
While not all companies will develop policies and practices aimed at those with intellectual disabilities, some of the more progressive organizations will seek to include this group in its diversity hiring in 2017, putting pressure on their competitors to do the same.