Herman Trend Alert: Healthcare Costs Continue to Rise
According to Mercer’s recently released 2005 National Survey of Employer-Sponsored Health Plans, United States employers are expected to spend an average of $7,564 per employee in 2006 for health benefits. This number represents an increase of 6.7 percent over the amount of $7,089 paid in 2005. The increase between 2004 and 2005 amounted to 6.1 percent. When we look at the 7.5 percent increase between 2003 and 2004 and the 14.7 percent increase between 2002 and 2003, the 6.7 percent does not seem like a lot. However, when compared to the previous year, we notice that the rate of increase grew by more than 10 percent.
Herman Trend Alert: Competition for Hourly Employees is Intensifying
In the late 1990s, we saw an increase in competition for good workers. To entice prospective employees to join organizations, recruiters offered higher salaries, more comprehensive benefits and high-dollar incentives like automobile leases, stock options or lavish gifts. As the momentum picked up, the cost of hiring people went up and employers began raising prices of their goods and services to generate needed funds.
Herman Trend Alert: Turnover Will Fatten Payrolls
Employers are experiencing increasing employee turnover, which causes a number of problems for them. One of those problems, not seen for a number of years, is beginning to resurface in many companies. The situation will become much worse before it gets better. Payroll costs are increasing because employers are adding more people.
Herman Trend Alert: For Some Older Workers, It Is Prime Time
“It’s just self defense,” says Jim Hicks, Vice President of Business Integration for AREVA in Lynchburg, VA, talking about the tightening labor market. AREVA, designer and builder of nuclear fuel, services, and components, needs engineers to support its corporate growth. Problem: they are difficult to find.
Herman Trend Alert: Employers Intensify Recruiting
As the global economy becomes stronger, employers around the world will invest more resources in recruiting. Very few employers have full staffs, even though most have tightened their organizational charts. When companies reduce the number of positions to operate in a lean mode, every unfilled position affects the achievement of corporate objectives. Mission-critical vacancies must be filled by competent employees, a difficult challenge in a tight labor market with a shortage of skilled workers.
Herman Trend Alert: International Cultural Influence
For many years, American culture has been followed and adopted by people in countries all over the world. Young people particularly pick up eating habits (McDonald’s), clothing preferences (Nike) and much more. They watch American television shows — in English and in translations — and become great fans of singers, actors and sports figures. We see evidence of international cultural influence on television news when we see citizens of other countries wearing American clothing and hear them using American jargon.
Herman Trend Alert: Shortage of Skilled Labor Spreading
We have focused quite a bit of attention on the growing shortage of qualified workers in the United States. Based on our interpretation of data from the Bureau of Labor Statistics, we anticipated a shortage of 10 million in skilled labor by 2010. We presented our case in our book, “Impending Crisis: Too Many Jobs, Too Few People.” While there have been some challenges to our forecast, many others now use our projections. Whether the actual shortfall will be 8, 10, or 14 million, it is clear that employers find it increasingly difficult to hire and retain the people they need.
Herman Trend Alert: Small is Big: Workforce Focus
Economic development professionals know that job growth comes from small business, not large employers. While attracting a new facility from a well-known corporation is good for community morale and certainly has positive economic impact, nurturing small and mid-sized business can generate more jobs with greater stability.
Herman Trend Alert: Where are the People?
As we warn of the growing shortage of skilled workers — the most severe in history — we are often asked if the problem is caused by the retirement of the 76.4 million people in the Baby Boom generation. Our answer has to be a guarded “no.” Certainly, some Boomers will retire over the next few years; however, many more will not. The problem is more complicated.
Herman Trend Alert: Focus on the Individual
As employers move through the next 10 to 15 years, they will discover that concentrating on individuals will be considerably more productive than pushing any one-size-fits-all concept. Employees seek, expect, even demand personal attention. Their attitudes will drive employers, and then others, to correct their deficiencies. We will see this shift from groups, teams and classes of people in practically all aspects of corporate life.