Like so many things for the year ahead, changes probably are coming to the workplace.
We asked several human resources experts and employment lawyers what they think we’ll be talking about regarding compensation, benefits and how bosses manage their people. Some predictions:
More companies will eliminate the once-a-year pay raise
It’s long been a corporate rite of passage: the 2% or 3% annual merit raise. But human resources consultants say more companies are questioning whether the annual approach is best.
For one, when spread out over a year, the small bumps are typically 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 often end up measuring the same thing as bonuses — past performance — when salaries should be set on an employee’s value in the marketplace.
Patagonia last year stopped giving annual base-pay raises each March, which it had done for about 20 years. Although it still awards yearly bonuses for past performance, it instituted two windows a year when employees could see their salaries jump, based on whether their managers thought their skills had improved and how critical they are to the company.
Exotic perks will start tapering off … but some aimed at millennials will grow
Recent years have brought an arms race to employee perks such as free meals and 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 the expansion will quiet down in 2017 as more companies take stock of how much employees really appreciate the perks. He says Glassdoor’s research compared 54 benefits with employee satisfaction and found that items such as on-site yoga classes or office video games held little value to workers.
What some companies may add instead are what consultants call “life planning accounts.” Employers fund these taxable accounts with $500 to $2,500 that workers can use on approved expenses, such as gyms or closing costs for buying a home.
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.
As states make marijuana legal, companies will update their policies
California, Massachusetts, Nevada and Maine have joined the list of states allowing marijuana for recreational use. As that number grows, more companies are expected to adjust their drug testing policies or procedures.
“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 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,” 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.
Some employers will experiment with using location data to track workers
Employers already are able to track employees’ public social media to see if they’re about to quit and go to a new job. Next up could be technology that lets companies use location data to track the movement of workers.
Whether through corporate-issued phone data or sensors on employee badges, 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.
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 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.
Jena McGregor writes about leadership for the Washington Post.
