2017 Changes and Trends in Human Resources : Implications for Compensation Strategies

2017 Changes and Trends in Human Resources : Implications for Compensation Strategies

by Lauren E.B. Belcher at Phillip Blount & Associates

With President Trump’s recent inauguration on January 20th, 2017, it is safe to say, a lot of changes are coming our way.   One of the top concerns in 2017 is the fate of the Fair Labor Standards Act (FLSA) overtime regulations.

FLSA Overtime Regulations : Updated Status in 2017

Originally set to become effective on December 1, 2016, the Department of Labor’s (DOL) FLSA overtime rule was stopped by Texas federal judge, Amos Mazzant on November 22, 2016.  Had the rule been made effective, the salary threshold for overtime would have more than doubled from $23,660 to $47,476 (Society for Human Resource Management; SHRM).  SHRM estimated that employers would have spent over $592 million to comply with the new rule.

At the time of this article, there have been no decisions by the Trump Administration regarding what will happen to the FLSA overtime rule.   However, according to SHRM, President Trump alluded to a “small-business exemption” for the rule in a campaign interview last year.   It is possible that this kind of exemption would also include schools and/or nonprofits. When we receive information on the final ruling, we will report it to you.


Other 2017 Trends to Look For in Human Resources and Their Impact on Compensation Strategies 

A number of other trends in human resource management and executive and employee compensation will impact corporate compensation strategies and planning in 2017. Here is a brief recap of several trends we see with compensation-related implications:

Digital Transformation
“Technology is changing the way organizations will work and learn, engage employees, and even recruit new hires”. (Forbes) According to Forbes, this year, human resources will become more digital and consumer-focused. “Digitalization” also includes moving toward a “one-click operation,” versus the age-old role of Human Resources as an administrative/service function. (SHRM)

A Blended Mix in Workforces 
Company workforces are moving toward a larger mix of contractors, consultants, part-time employees, and freelancers versus a workforce of all full-time employees – Forbes cites online platforms and the “gig economy” (e.g. Uber) and “offline alternative work” options as the cause for this trend. According to the Bureau of Labor Statistics, an estimated forty percent of workers will be contingent by the year 2020. With this ever-growing contingent workforce, more responsibility falls to establishing parity vis-a-vis compensation and benefits.  Workers being hired for special projects or seasonally do not typically receive the same type of compensation and benefits as a full-time or part-time employee may receive –  rather they may be paid on a project-by-project basis and without the cost of health insurance or other benefits paid for by their employer.    (GoodHire / The Works)

More specialized and Technical Human Resources Roles
With growing technology use, human resources roles are becoming more complex and are evolving into combination roles (i.e. a human resources “recruiting” role combined with a “software” technology role). (Forbes)

A Growing Focus on the Employee “Experience”
Another 2017 human resource trend involves increased use of apps and computer programs to improve the workplace through focusing on the “employee experience” including their work environment, employee training opportunities, employee development programs and employee support services. (SHRM)

A Multigenerational Workforce
With so many employees waiting longer to retire and younger generations just beginning their careers, the corporate workforce continues to consist of employees in multiple generations, from baby boomers to generation “z”. This is a challenging new trend for compensation and total rewards strategists. Each generation of employees is motivated differently and must be rewarded in accordance. For example, whereas an older generation employee may value more job flexibility, a younger generation employee may value mentorship or job-specific training more.

These changes and trends in human resources which will impact compensation planning and strategy in the new year are merely a few that are emerging as 2017 begins.  Please do not hesitate to contact Philip Blount and Associates with any concerns or questions you may have.


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