The Top 5 Talent Surprises That Could Spoil Your 2017

It’s hard to think of an exception to the rule that “it’s always better to be prepared than surprised.” As a result, most professionals do read end-of-year projections (e.g. 2017 trends) because they help them view and prepare for the future. But unfortunately, when you only track these micro-trends, you might end up focusing more on the trees than on the forest. So in order to avoid too narrow of a focus, forward-thinking professionals should also look for articles like this one that highlight what I call “big-picture surprises.”

So if you don’t want any huge shocks during 2017- 18, take a quick scan of the listed potential significant surprises. Because should any one of them occur, each would definitely force you to rethink your established talent management plans and budgets.

Surprise No. 1 — Do you have a plan for a significant economic downturn? Uncertainty reduces business investment and eventually growth. So you need to be aware that the current wicked mix of economic and political uncertainty are almost guaranteed to continue. And they may even worsen in most major economic regions including China & Southeast Asia, Europe, and the Mideast. And it’s also prudent (because we have a new president who promises to shake up trade) to prepare for uncertainty related to all aspects of trade. From a talent-management perspective, this downturn possibility means that there must be a plan to cover slowed hiring. And on the positive side, less hiring will ease the talent shortage which means a reduction in recruiting and retention issues.

With restrained growth, talent management will be expected to have a plan to increase workforce productivity while simultaneously cutting overall labor costs. And because some geographic areas in the world will still be growing, the talent management plan must be able to handle cost-cutting and growth simultaneously but in different geographic regions.

Surprise #2 — Where work will be done will become a major issue — for years the decision as to where work should be physically done was primarily economic. However, during the next year there will be increasing political challenges to free trade and to work being moved offshore. As a result, HR will need to have a plan which factors in the potential political reactions and tax implications to the “where the work should be done” decision.

If more manufacturing work is shifted back to the U.S., recruiting managers will have to develop a plan to find the needed already scarce experienced manufacturing and production talent. Talent leaders will have to develop a new skill set and a set of predictive algorithms in order to make a measurable contribution in this area.

Surprise #3 — “The march of the robots” creates waves of employee unrest — talent leaders may not be focusing on it, but there is already a dramatic shift toward technology replacing employees in the U.S. And with its higher labor costs, one of the few options for bringing manufacturing work back to the U.S. will be to rely more heavily on robotics.

But the real shock will occur when large groups of drivers, customer service, and production employees begin to realize that they really have no job protection from this new wave of automation. Software, chatbots, and algorithms will also replace a large number of financial, compliance, reporting and customer contact employees. The real shock will be a delayed one. But it will occur after as many as 50 percent of your employees realize that their job will go away not just at this, but at all firms. Once this shocking realization sets in among employees, the level and the ferocity of the unrest and re-unionization will be almost impossible for the current HR staff to handle.

Over the next handful of years, resistance to automation will become the No. 1 talent HR issue.Unfortunately, few in HR are even aware of this impending crisis.

Surprise #4 — Diversity shifts from an HR issue to a business imperative — for years diversity has been primarily a compliance issue. But recent data from McKinsey and university research has shown that diversity has significant bottom-line impacts. In fact, research by Deloitte shows that “building an inclusive culture” is now the No. 1 predictive strategy for global financial performance.” Once executives realize that they have been undervaluing diversity, it will become a business imperative. And raising it to a strategic goal will mean that the way HR manages diversity recruiting and retention will have to dramatically shift to a data-driven approach.

Data is already revealing that some current processes, like assessing a candidate’s fit, actually have a negative impact on diversity (Pandora is a benchmark example). Market research will be needed to determine the best ways to successfully recruit the many individual categories of diversity prospects. The need for this stratification will become clear because market research data will reveal that each diversity category has unique job attraction factors and job search approaches. Data will also need to be collected to reveal which jobs, when filled with diverse employees, have the highest bottom-line impact.

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Surprise #5 — Dramatic internal changes will be required within the HR function — in addition to the changes required by the above surprises, HR needs to prepare for some additional major shifts.

  • Digitalization and data will reveal that many things in HR don’t work — over the last several years, Google gathered data that proved that many of its established practices in HR simply didn’t work. Talent leaders must be prepared for a similar shock after most major firms complete their shift to a data-driven talent management approach. For example, in many cases, data will reveal that most HR actions have literally no impact on employee productivity. Don’t expect senior executives to be happy when they find out that many “sacred cows” in HR (i.e. benefits, exit interviews, and retention bonuses) don’t actually produce a measurable increase in quality of hire, retention or employee innovation.
  • Businesspeople begin dominating the talent management function — it shouldn’t be a surprise, but as HR becomes more businesslike and data-driven, the composition of HR will have to change to reflect those changes. New hires in HR will have to have business experience, and a hard-to-find combination of financial, data, and technology knowledge. An illustration of this shift is that the new VP of HR at Google came directly from sales. She is known internally as someone who constantly demands “show me the numbers.”
  • Technology dominating HR work will cause a shift toward an internal consulting model — literally, as much as three-quarters of HR transactional and tactical work will eventually be done by software or chatbots. Following the lead of other business functions, talent management will naturally “shift up” to become more strategic. That means that HR will begin moving beyond even a “centers of excellence” model and toward becoming an internal consulting group (think McKinsey). These consultants will advise managers on strategic talent, productivity, and innovation issues. Unfortunately, many currently working in HR simply won’t be able to make the transition.
  • College recruiting begins to change dramatically — with the growth of technology, social media, and the Internet, the remote college recruiting model that has been adopted by Goldman Sachs and Nestlé Purina will become the benchmark. Growing student loan debt will also force most firms to add debt repayment as a major college recruiting tool. 

Final Thoughts

It’s the start of a new year, so it’s an ideal time for talent leaders to consider the high probability that the year 2017 will be one full of dramatic changes. They will be more severe because of Brexit, the new vision of President Trump, and the emergence of technology taking over employee work. So my advice to talent leaders is to vigilantly be on the lookout not just the “surprises” outlined here, but also for other major business, economic, and political surprises that can’t be predicted at this time. And at the very least, prepare an “if — then” outline of a plan for each of the possible surprises.

Note: Why not start out the new year by connecting with me on LinkedIn?

About the Author

Dr. John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high-business impact; strategic Talent Management solutions. He’s a prolific author with over 900 articles and 10 books covering all areas of talent management. He has written over a dozen white papers, conducted over 50 webinars, dozens of workshops, and he has been featured in over 35 videos. He is an engaging corporate speaker who has excited audiences at over 300 corporations/ organizations in 30 countries on all six continents. His ideas have appeared in every major business source including the Wall Street Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., NY Times, SmartMoney, USA Today, HBR, and the Financial Times. In addition, he writes for the WSJ Experts column. He has been interviewed on CNN and the CBS and ABC nightly news, NPR, as well many local TV and radio outlets. Fast Company called him the "Michael Jordan of Hiring," Staffing.org called him “the father of HR metrics,” and SHRM called him “One of the industry's most respected strategists." He was selected among HR’s “Top 10 Leading Thinkers” and he was ranked No. 8 among the top 25 online influencers in talent management. He served as the Chief Talent Officer of Agilent Technologies, the HP spinoff with 43,000 employees, and he was the CEO of the Business Development Center, a minority business consulting firm in Bakersfield, California. He is currently a Professor of Management at San Francisco State (1982 – present). His articles can be found all over the Internet and on his popular website www.drjohnsullivan.com and on www.ERE.Net. He lives in Pacifica, California.