Top Four HR Trends in 2019
The job market remains strong.
Job growth is expected to continue into 2019 at a modest but solid 2.5% rate. According to economist Michael Feroli of JPMorgan Chase, even if monthly job growth falls from over 200,000 (this year) to about 160,000 in 2019, the unemployment rate will stay at it’s near-50-year low. Now for the bad news for employers: this low unemployment means there are far more job openings than there are unemployed workers, so it will continue to be difficult (and expensive) to recruit and retain talent in 2019. Consequently, Feroli also forecasts higher-than-average pay increases.
HR technology continues to make inroads – especially workforce analytics.
This has become a perennial trend, as advanced technologies infiltrate more and more HR organizations. Admittedly, the penetration of emerging technologies has been slow; for example, only 5% of organizations say they are effective with talent analytics. Still, there are serious benefits; for example, as the Randstad Sourceright Talent Trends Report found, nearly three out of four businesses agree that “technology has made recruiting simpler and more efficient.” Workforce analytics seems to be a particularly hot area. Once a rare practice, now more than two-thirds (69%) of workplaces have implemented – or plan to – some kind of plan to capture, analyze, and use employee data.
Employers continue to look for creative solutions to rising health care costs.
Health care costs will also continue to squeeze employers. Small businesses are particularly vulnerable to increases: according to advisory firm Mercer, 34% of employers with 10 to 499 employees indicate their health plan spending increased by more than 10% last year, versus only 11% of employers with 20,000 or more employees. As a result, small employers in particular are pursuing options to lower costs, such as shifting to lower-cost, higher-deductible plans, emphasizing wellness programs that promote healthful lifestyle choices in employees, and more.
Annual retrospective employee reviews are dying; ongoing, forward-looking feedback is rising.
Another long-standing trend that seems to be continuing into 2019: the transition of annual performance reviews – once the de facto standard throughout the business world – into ongoing, real-time feedback systems. Simplification is a major driver here: according to the CEB Corporate Leadership Council, 85% of organizations have or plan to simplify performance management processes. Instead of once-a-year, anniversary-based reviews, performance management today focuses on providing continuous, small-dose feedback delivered when it can still make a difference, i.e. before employee performance suffers.
CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about our ability to create a strategic HR function in your business that drives business growth potential, contact us today.