However, as we enter 2017, there’s a lot of uncertainty about the details of delivering on those promises and how quickly they will be implemented. Cutting taxes and eliminating some regulations seems to be low-hanging fruit, and will be relatively easy to implement. However, changing and/or improving the ACA may be more difficult in the short term. Making large investments in infrastructure and military, even though it may be necessary, will be harder. The conservative congress is loath to approve deficit spending programs. Lower taxes mean less income and figuring out how to pay for this increased spending may be difficult, especially when there seems to be reluctance to address entitlements (e.g., Social Security, Medicare, and Medicaid).
My prediction is that in 2017 we will have a perceived business-friendly environment, but one that is fraught with uncertainty. There probably won’t be a recession, but companies will be cautious and not make big investments until things seem less uncertain. As a result, the economy will probably continue to show meek growth, at least in the first half of 2017. This means that we will continue to have modest gains in job growth with around 200,000 new jobs created each month. Combine this with the fact that 300,000 people turn 65 every month and leave their jobs, means that the demand for talent will continue as the economy will have around 500,000 new job openings every month. In addition, the supply of new talent will only be around 350,000 per month. In 2017, there will be around six million job openings and only four million people to fill them. As a result, unemployment will remain low in 2017 and there will be modest increases in wages, especially in highly skilled occupations that have severe talent shortages and/or aging workforces.
However, because of the uncertainty in 2017, don’t expect employers to go into a massive “war for talent; many will hold off hiring full-time talent for open positions and instead look to tapping into the growing freelance population. Others will increasingly look to investment in automation/technology to replace low and medium-wage positions (e.g., service and factory workers). The uncertainty in our VUCA world will also mean that the best companies will have strategic plans that will help them move fast if the environment changes. They will need to shift on a dime, and will need HR to be increasingly agile in 2017.
HR will come under increasing pressure to assure that their organizations have the right talent, with the right skills, in the right place, doing the right things. These is easy compared to the more important question: if the company has to move fast, can HR still ensure that we can have the right talent, with the right skills, in the right place, doing the right things? As a result, in 2017, we will hear more about whether companies have healthy talent supply chains for mission-critical positions. A healthy talent supply chain will need to address the following questions:
- Do we have HRBPs who build strong business relationships through effective talent consultation. (The HRBP is closest to the business and will need to drive HR agility)
- It’s 11 o’clock—do you know where your talent is?
HR will need to build internal and external agility through fast and cost effective talent matching. And HR will need to build systems for fast and easy access to the right internal and external talent.
- Does HR provide meaningful work supported development that is reinforced by a learning culture?
- Do we retain our valuable talent and leverage expertise?
- Since this is a volatile environment, do we office respectful outplacement support?
Bottom Line: In 2017 and beyond, HR will need to work closely with business partners to make fast and easy decisions about talent: do we build, buy, poach, borrow or rent to meet the ever-changing business environment? How will your organization answer?
Read more 2017 talent predictions by other thought leaders.