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10 HR Trends Shaking Up Small Business in 2016

In Human Resources — by Riia O'Donnell

woman drinking tea while working at computer

HR trends come and go. Some are fleeting and some are keepers. We’ve stopped calling everything a “paradigm” and quit trying to create “synergy” (thankfully), but there are a lot of trends that come down the pike worth keeping. As the year progresses, here are some of the top HR trends in 2016 for small businesses to keep on their radar.

1. Outsourcing HR

Few companies can afford a massive HR department with specialists in every category of the function. However, sometimes a specialist is exactly what’s needed. Most companies stopped managing their own 401(k) accounts decades ago. They turned to specialists, giving rise to countless fund management companies that saw better returns on employee contributions. Outside payroll companies have been around forever, leaving that function to the accountants, rather than the HR pros.

If you’re looking for an expert but can’t afford one, it makes sense to join the growing number of organizations that are turning to professional employer organizations. PEOs handle HR-related functions like benefits administration, payroll, employee training, performance evaluations and recruitment. Whatever you may need, there’s probably an app for it – or one on its way. Such software is designed to help you work smarter, not harder. And that’s a benefit for everyone.

2. 24/7 HR

Wait, how do we outsource HR and simultaneously make it 24/7? The trick is automation. Technology allows employees to perform training at their convenience; access benefits administration sites that explain the ins and outs of every employee perk and insurance detail on their own time; and file complaints remotely.

Technology helps HR be more accessible with fewer people. When employees do come to you with questions, they’ve already got a baseline of knowledge. You’ll be answering smarter questions in less time and providing better service with fewer staff. These value-added HR capacities free your time for more important work.

3. Onboarding

Many moons ago I developed new hire orientation programs for every category of employee – from seasonal restaurant workers to highly specialized scientists. No matter the job, the intent was the same: Getting the employee acclimated and engaged, not just trained.

The stats bear out the effort to get employees invested in your company: 57 percent of employees who left their jobs in the last year did so within the first 12 months on the job. And if you think this is kind of turnover is only for hourly or entry-level employees, think again: Half of all senior-level outside hires are gone within 18 months on the job.

[Tweet “Half of all senior-level outside hires are gone after 18 months.”]

To protect your company from scary statistics like these, the trend today is take orientation much further – to onboarding. Onboarding goes beyond filling out forms and finding the supply cabinet. Onboarding includes making sure the new hire has a mentor for the first weeks; setting them up with small, attainable tasks; and creating an atmosphere of excitement around the new addition to your team.

Onboarding is not the same as training, but they go hand-in-hand. Getting the employee up to speed on their work is important, but getting them invested in the company’s work is critical.

cost of employee turnover chart

Consider this: The cost to replace a mid-level employee is upwards of 150 percent of their salary. For an employee earning $80,000, that’s $120,000 in turnover costs! By developing an effective, systematic onboarding process, you’ll be more likely to retain your employees – and retention is great for the bottom line.  

[Tweet “The cost to replace a mid-level employee can be 150% of their salary.”]

4. Tweet to Compete (or Pin, or Post)

What does your social recruiting strategy look like? It’s not all about LinkedIn anymore. Sure, the network continues to be a great platform for sourcing passive candidates, or candidates in particular industries, like sales. But it’d be a mistake to ignore other forms of social media.

Last year Twitter removed its character limit for direct messages. They also allowed their users to opt in to receive direct messages from anyone – not just the people they follow. It’s a move to break into LinkedIn’s InMail market and possibly becoming the next great hunting ground for staff. In so doing, Twitter has become a more powerful recruitment tool than ever before.

Facebook is also great way to get out the word that you’re hiring, and to an audience that’s sold already: They “like” you, they really “like” you! People are twice as likely to respond to a cold email if they’ve interacted with your brand before. Facebook isn’t necessarily the best place to source candidates across all industries, but it can be effective in areas like retail and healthcare.

If you’re hunting for tech talent, try Stack Overflow or GitHub. Instagram is a good place to source millennials. Looking to recruit more women? Try Pinterest. Put yourself in the mind of your perfect hire when you’re looking to hire. Would you start your search with your already established networks? The answer could be right at your fingertips.

5. Remote/Flex Workforce Increases

Do you really need a full-timer, or someone in the office five days a week? Would a job share program or remote worker fit the bill? What was once considered a perk for employees has become a huge perk for employers. Flex and remote workers save companies money on benefits, taxes, office expenses, even salary: 37 percent of technology professionals would take a 10 percent pay cut for the ability to work from home.

[Tweet “37% of tech workers would take a 10% pay cut to work from home.”]

Companies are finding the benefit of a flexible workplace is not only saving costs, but paying big returns. A recent survey by Workplace Trends found 87 percent of companies who offer work flex programs saw increased employee satisfaction, 71 percent increased productivity, and 65 percent improved talent retention. Another 69 percent use the flex program to their advantage when recruiting, and more than half of those felt it positively impacted their recruitment efforts.

The trend will likely continue. Few people who haven’t had to brave the morning commute to get to work will want to get back into that rat race any time soon. And since flexibility works for companies as well as employees, everybody wins.

[Tweet “65% percent of flexible workplaces say flex work improves employee retention.”]

6. Baby Bounce

For the first time since 2007, the birth rate is up. While it’s probably not going to turn out another baby boom, the trend is a positive one for the economy.

More interesting, though is who’s having babies. In the U.S., teen births continue to decline, while births among women in their 30s and 40s are on the rise. There is speculation that there may be a “baby bounce” coming, as parents who put off having a child in their 20s due to job insecurity or the recession play catch up.

So what does this mean for employers, who are more likely to encounter their female employees having children during the prime of their careers? More maternity/family leaves, potentially more flexible workplaces, and work/life balance issues as millennials get on the baby track.

7. Boomerang Employees

They’re back! One of the newest trends in hiring is the boomerang employee. These are staffers who left the company, and then seek re-employment. Some speculate this phenomenon implies millennials are maturing, and may have realized they made a mistake jumping ship. Others point to a tight market. Whatever their motivation, boomerangs are a new class of candidate to consider.

One survey showed 76 percent of employers who used to have a policy against rehiring staff have changed their minds, and now do consider boomerangs to be viable candidates. And it makes sense. For recruiters and managers, it makes life a little easier: Boomerangers know the routines, the benefits, and it’s an easier “sell” to get them in the door. Hiring a known entity also means assurance that the employee is familiar with corporate culture, which 33 percent of HR managers rate as a big plus.

U.S. labor force by generation chart

8. Boomers Go Bust

As baby boomers retire, millennials and Gen Z are taking over. While many millennials complain boomers aren’t retiring fast enough to make room for new grads, the trend for younger management is on the rise. Last year millennials surpassed Gen X as the largest generation in the workforce, and they’ll only gain market share over the next 10 years.  

Millennials will take over management of companies with their own unique perspective. They aren’t interested in working for the same company for 40 years and then retiring; they want a more flexible work environment; they need and want more mentoring and feedback; and they have unprecedented global access to talent and knowledge. With them at the helm, there’s no doubt that the landscape of the American workplace will change.

9. Changes to the Affordable Care Act

Effective Jan. 1, 2016, the ACA has changed, requiring business with 50 or more full-time employees (defined as those who work a minimum 30 hours per week) to provide health coverage to at least 95 percent of them and their dependents under 26 years old. In 2015, businesses with 100 or more employees were required to provide coverage.

Businesses that don’t provide coverage will face steep fines. There’s speculation that this will reduce the workforce or force a shift to contract or part-timers for a lot of small businesses.

10. RoboForce

The robots are coming. The prospect of higher minimum wages has caused many to speculate that fast food and retail locations will look to downsize people and upsize technology. So far, in Seattle, where a $15 minimum wage is being phased in, this isn’t the case. Employment in retail and food service is well above pre-recession highs.

[Tweet “Despite the passage of a $15 min. wage, retail & fast food employment in Seattle is booming.”]

But even before rising minimum wages, automation was already in the cards. Target stores have been working for a few years with tech companies to enhance technology and are even planning a concept store that uses robots.  

Beyond the retail sector, technology has been quietly replacing humans for years. But the news isn’t all bad for those of us who walk upright. Research suggests that technology really doesn’t have a major net effect on employment.

ATMs were supposed to replace bank tellers, but as banks saved money, they opened more branches, hiring more people. Computers have long been doing the work of lawyers and paralegals in the discovery phase of lawsuits. But robo-lawyers gave rise to lawyers spending less time on the drudgery of discovery, and more time with additional clients (no speculation here on whether or not that’s a good thing).

HR trends may come and go and certainly next year we’ll be discussing the latest, greatest “thing.” The real trick is to look for trends that impact the bottom line, with results that can be measured.

What are some of the HR trends in 2016 that have caught your attention?

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