Like so many things for the year ahead, many changes coming to the workplace are surrounded by questions. If Congress repeals or replaces the Affordable Care Act, what will that mean for employee health insurance? Will companies still have to publish the potentially embarrassing CEO-to-worker pay ratio, or will that part of the Dodd-Frank act be repealed, too? Will my employer or state join the bandwagon of those that have recently expanded paid parental leave?
And of course: When will the robots come for my job?
The answers to many of these questions are unknown. Congressional Republicans have already begun trying to dismantle the health-care legislation, although what they would replace it with is anyone's guess. Many think the pay-ratio rule is at risk. Paid parental-leave expansions are likely to keep growing at the state and employer level, but when and where is unclear.
As for the robots, it depends on whom you ask: While many believe automation will swiftly replace some types of jobs — say, paralegals and assembly-line workers — others think the invasion will creep in, with automation changing how people do many jobs but not replacing workers outright.
"In 2017, it's very rare we'll see a robot or artificial intelligence system do all the things someone does in their job," said Michael Chui, a partner at the McKinsey Global Institute and co-author of a forthcoming report on automation. "That will be extremely rare in 2017."
So what can we expect will happen in the workplace in 2017? We asked several human resources experts and employment lawyers to make predictions about the coming year — the changes they think we'll be talking about regarding compensation, benefits and how bosses manage their people. (Or perhaps seem more like Big Brother: Get ready for a few to experiment with location-based tracking of workers, experts say.) Six predictions they made for the year ahead:
1. More companies will eliminate the once-a-year pay raise
For many workers and their employers, it's long been a corporate rite of passage: the 2 or 3 percent annual merit raise that arrives, like the holiday turkey or list of New Year's resolutions, with the passing of another year.
But human resources consultants say more companies are likely to question whether the annual approach is best.
"It's too early to call it trend, but I am willing to be on record that it’s going to become one," said Laura Sejen, managing director for talent and rewards at the consultancy Willis Towers Watson.
For one, when spread out over the course of a year, the small bumps are typically pretty meager, barely registering in many workers' paychecks. They also pull from the budget that companies can use to reward star performers or people with high-demand skills. And these annual bumps in base pay typically end up measuring the same thing as bonuses — past performance — when salaries really should be set on an employee's overall value in the marketplace.
That's why Patagonia last year decided to stop giving annual base-pay raises each March, which it had done for about 20 years. While it still awards yearly bonuses for past performance, it started having two windows a year when employees could see their salaries jump, basing it on whether their managers thought their skills had improved and how critical they are to the company. Dean Carter, Patagonia's vice president of human resources, said that allows for bigger increases to the most valuable employees, "rather than just the peanut butter 3 percent to everyone."
2. Exotic perks will start tapering off ... but some aimed at millennials will grow
Recent years have brought an arms race to employee perks, with companies rushing to beat competitors with more free meals or vacation benefits. One start-up's CEO even offered employees Tesla leases to recruit top talent.
But Andrew Chamberlain, chief economist at the careers site Glassdoor, believes their expansion will quiet down in 2017 as more companies take stock of how much employees really appreciate them. He says Glassdoor's research compared 54 benefits with employee satisfaction and found that items like on-site yoga classes or office video games held little value to workers. "As start-ups mature and start acting like more traditional companies, they're going to look at the payoff," he said.
What some companies may add instead — particularly those interested in offering cushy perks but unable to afford them all — are what consultants call "life planning accounts." Employers fund these taxable accounts with $500 to $2,500 in cash that workers can use on approved expenses, such as pricey gyms or the closing costs for buying a home; one human resources consultant said in November that a dozen clients were considering offering them later this year.
But some perks, particularly those aimed at millennials, are seen as likely to proliferate. One is more paid parental leave, which began spreading beyond the tech sector into fields such as retail and manufacturing in 2016. The other is student loan reimbursements, which a handful of employers such as Pricewaterhouse Coopers and Fidelity have rolled out. With more workers carrying heavier student loan burdens, Sejen says, "that’s definitely emerging as something that’s a generationally targeted benefit."
3. As states make marijuana legal, companies will update their policies
One of the big winners in last year's election was marijuana, with California, Massachusetts, Nevada and Maine joining the list of states allowing it for recreational use. As that number grows, more companies are expected to adjust their drug testing policies or procedures in ways that could affect employees in other states, too.
"For a lot of companies that have big footprints across the U.S., an adage they have is 'as California goes, so should the rest of the company,' " says Brian Kropp, who leads the human resources practice at research and advisory company CEB.
He and others believe companies could start to shift their pre-employment screening, asking screeners not to test for or report marijuana use or even consider stepping away from such tests altogether.
"Unless you're talking about certain jobs like airline pilots or interstate truck drivers, the uptick in [legal states] has prompted more employers to revisit their policies or back away from pre-employment drug testing," said James Reidy, an employment lawyer in Manchester, N.H. Still, he says, most will continue to reserve the right to test if they have "reasonable suspicion" that it's impairing employees' work, as well as prohibit its use on the job.
4. Some employers will experiment with using location data to track workers
The technology is already out there for employers to track employees' public social media to see if they're about to quit and go to a new job. Next up could be high tech that lets companies use location data to track the movement of workers.
Whether through corporate-issued phone data or sensors on employee badges, human resources consultants say companies are experimenting with how they can put that data to work.
"It's pretty easy to get a stream of data about where people are," says Josh Bersin, who leads a unit at Deloitte that does human resources research. "It hasn’t gone mainstream yet, but people are doing it."
Though fundamentally creepy-sounding, he and others say the technology could simply aid managers in helping overburdened workers — say, those who never leave their office desk. The sensors might also be used to study the most effective places for store clerks to stand to be accessible and improve sales.
Kropp, who says he knows of two investment banks using the technology, believes "the vast majority" of companies that try it will use it for positive outcomes, such as greater productivity. But he acknowledges that "the temptation exists for some people to use that data for ill will." Not to mention the serious privacy concerns it could raise — such as tracking whether employees are visiting competitors' headquarters.
5. The move away from performance review ratings could reverse
In recent years, a growing number of big companies — from General Electric to Accenture to Microsoft — have moved away from the traditional performance reviews, with many dumping "ratings" or "forced rankings" to revamp the much-dreaded annual process. In its place, many are installing more frequent conversations with managers, instant feedback from peers and supervisors, and making the overall process less rigid.
But while many of those efforts are likely to remain, Kropp predicts some of the earliest companies to drop the use of ratings could reinstall them this year.
"As more and more companies have gone through the second or third cycle without ratings of any type in place, it’s pretty clear that the experiment has not consistently delivered the results people were hoping for," he said.
He points to research his firm did that found companies that eliminated ratings on performance reviews had employees score their conversations with managers 14 percent lower than they had previously. Those who'd gotten high scores under the old system missed their "A" ratings the most, and were even less satisfied with the new system.
6. Even if the overtime rule dies, companies that gave raises to their employees will keep them
A federal rule that would have expanded overtime pay to more than 4 million workers on Dec. 1 may be turned back after an injunction by a Texas judge in late November. The Obama administration's Department of Labor filed an appeal, but human resources experts predict the incoming administration, opposed to more regulation, will drop it.
Yet they also predict that companies that already shared details about associated pay changes with their employees will keep them. The rule, which hadn't been updated in 12 years, would have made overtime pay an option for salaried employees earning up to $47,476 a year — much more than the current $23,660 threshold. To get out of paying overtime, some companies raised employees' salaries, while others moved salaried workers to hourly status or cut the hours worked.
For those who had already committed to paying more, many are keeping the changes in place. Companies including Walmart and Kroger have said they'll move forward with their plans.
"Almost all of them have come out and said regardless of what the ruling is, we’re going to keep paying people more," Kropp said.
As time goes on, it will get even harder to break those promises to employees, said Philadelphia-based employment lawyer Jonathan Segal, though he notes companies could recoup their losses in other ways, whether in the form of reduced benefits or fewer future pay increases: "Money doesn't come from the sky."
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