2006 Workforce Trends by the Herman Group

Editor’s Note: We bring you our first 2006 trends forecast article, on workforce trends, courtesy of the Herman Group. While these trends apply to employers of any size, the impact on small businesses and even the self-employed will be significant. Themes that stand out in this forecast include: increasingly skilled knowledge workers, globalization, flexible or nontraditional work arrangements, and the use of technology. The 2006 workforce trends are:

1. Intensifying competition for qualified workers.

    As the economy continues to grow, more jobs will be created. Employers will become increasingly aggressive in their efforts to recruit people who are qualified to do their work. A limited supply of workers with the right education, training, and experience will force employers to operate with inadequate staffing, causing a risk of not meeting customer expectations and/or not maintaining market position.

2. Gradually increasing attention to employee retention.

    The rising heat of the employment market will motivate an increasing number of employees to change jobs, often responding to attractive incentives. Employers will realize, often too late, that their attrition rates have skyrocketed and it has become more difficult to hire replacements easily. Retention strategies will often be defensive, rather than preventative.

3. Increasing investment in older workers.

    In need of a stable workforce comprised of people with wisdom, experience, and reliability, employers will emphasize retention and hiring of older workers. Seniors seeking income — full or supplemental, social relationships, and a desire to stay active and productive will continue working into their eighties and nineties. Traditional retirement will be replaced by shifting lifestyles.

4. Shift in retirement plans to lifetime lifestyle funding.

    With the evaporation of traditional retirement, long-term wealth accumulation plans will modify pay-out options to offer greater flexibility. As people age, they may draw from savings to finance sabbaticals, pay for world travel, fund education, or subsidize other non-work activities.

5. Continued off-shoring of some work, coupled with return of other work.

    Employers in developed countries will continue to send work to less-developed regions for cost savings. More low-cost production communities will be established around the world to absorb the demand. Concurrently, work that is sensitive to customer satisfaction, involves cross-cultural communication, or is technical with a need for quality or creativity will return to points of origin … if indigenous workers are available to do the jobs.

6. Larger investment in corporate training.

    The need for better trained skilled workers — and managers — will drive increased investment in corporate training. More companies will grow their education and development programs, utilizing internal resources, community colleges and universities, and outside contractors. Emphasis will be placed on the development of future leaders, providing fast-tracking in those organizations that already lack competent leadership.

7. Growth in telecommuting.

    Workers desiring more control over their time, seeking better life-work balance, will persuade employers to facilitate telecommuting options. Utilizing available and emerging technology, remote employees will be highly connected to co-workers, customers, and company leaders. Long distance and international telecommuting will increase with the growth of globalization.

8. Expansion of staffing industry.

    The difficulty in finding qualified talent will drive more employers to rely on staffing firms to source applicants for them. Recruiters will be in high demand as firms rush to grow to meet immediate needs. As agencies compete with higher use of niche job boards for Internet job searches, technology, including sophisticated applicant tracking systems and related software, will be applied to a greater extent.

9. Heightened flexibility in work arrangements.

    Employers competing for qualified workers will support a wide range of options of work arrangements including shorter work-weeks, flexible hours, and job-role modification. Increasing emphasis will be placed on results, with managers and subordinates becoming more equal — like partners — in accomplishing work. Even in organizations with deep hierarchies, work environments will feel more level.

10. Employer dissatisfaction with product of schools.

    Managers will become increasingly frustrated with the low level of preparation of the workforce, particularly entry level applicants. Their complaints will be heard by senior corporate executives who will demand greater performance from public schools and technical, community, and four-year colleges. Community leaders will focus resources on improving local education to improve tomorrow’s workforce.

These forecasts were prepared by Roger Herman and Joyce Gioia, principals of The Herman Group, workforce futurists based in Greensboro, North Carolina. Herman and Gioia are Founding Members of the Association of Professional Futurists and Professional Members of the World Future Society. Herman is the Contributing Editor for Workforce/Workplace Trends for The Futurist magazine. The two futurists create and publish the Herman Trend Alert, a public service weekly e-advisory. The consultants deliver speeches on their topics of expertise and advise corporate leaders. (336) 282-9370.

Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.