11 Feb 2019 Economic Outlook and HR Trends
As the saying goes, “all good things must come to an end…” – while our economy continues to grow, the growth is slowing.
According to The Kiplinger Letter, the United States gross domestic product (GDP) will grow 2 percent, annually, over the next five years. However, it could drop below two percent in the fourth quarter.
The 2 percent (average) annual growth is about 1 percent lower, on average, than our annual growth between 1970 and the “Great Recession.” (Kiplinger)
Inflation is expected to remain around 2.3 percent in 2019, due to the slowing economic growth and rate increases within the Federal Reserve. (Kiplinger)
The new Department of Labor (Federal) Overtime Rule is expected in March 2019. Proskauer predicts that the minimum salary for exemption will likely increase to the low-to-mid $30,000s. Automatic future increases are unexpected, and the new rule is not likely to take effect until 2020. (Proskauer)
When we receive news on the March 2019 overtime ruling, we will report it to you.
Additionally – As of January 2019, though deemed unconstitutional, the Affordable Care Act, colloquially known as “ObamaCare,” remains unaffected. Subscribers will continue to wait for a final ruling. (Kiplinger)
Though the salary budget increases are at a standstill, with projections between 3.0 – 3.2 percent for the fifth consecutive year (WorldatWork), there are a few industries that are expected to see a surge of growth by 2024.
As reported in The Kiplinger Letter – with the growing aging population, health-care related jobs are expected to increase over the next five years. Likewise, with the expansion of 5G networks impending, vast opportunities in the telecommunications field will likely be needed.
Trends in HR – 2019
1. Technology and Analytics – Increased use of analytics to predict and assess retention, recruitment, etc. and increased use of technology for everyday tasks such as payroll. (SHRM)
2. People Focus – Maintaining the humanity of HR – remembering to focus on the person-to-person interactions, despite growing use of technology. (SHRM)
3. Updated Benefits – To meet the demands of modern society – updating benefits package offerings to retain and attract talent (SHRM)
4. Certification – There will be increased emphasis on updating skill sets or becoming certified to stay relevant and keep abreast of new technologies and other trends (SHRM)
5. Automation and Digitization – HR processes are becoming more automated and/or digitized for efficiency – employers and employees alike should be prepared for these changes. (Workspan)
As stated by a McKinsey Global Institute report, 62 percent of executives expect the need to replace a quarter of their workforce, by 2024, due to the growth of automation and digitization. (Workspan)
While these trends may change the face of HR and its methods, the focus remains the same – “the bottom line always gets down to people.”