Human resources professionals will likely face several talent management
issues in 2013 while also dealing with myriad federal regulations and the many
requirements of the Affordable Care Act, experts told BNA.
In general, the top issues for HR professionals in 2013 will be similar to
those they faced in 2012, 2011, and 2010, Peter Cappelli, director of the Center
for Human Resources at the University of Pennsylvania's Wharton School, told BNA
“One thing that is striking about the list [of 2013 issues] is how many of
these are employee relations/compliance issues,” Cappelli said. “If you take
that away, the rest is all talent management. This suggests something about what
the world of HR is about these days.”
In light of recent changes in the economy, the issue of retaining and
rewarding the best employees will be at the forefront in 2013 for HR
professionals, Jennifer Schramm, manager of the Workplace Trends and Forecasting
Program at the Society for Human Resource Management, told BNA Dec. 12.
1. Retaining the best employees in light of recent improvements in the job
2. Increasing emphasis on nontraditional workplace benefits, such as flex
time and telecommuting.
3. Developing the next generation of corporate leaders as many baby boomers
are set to retire.
4 Keeping corporate knowledge and finding skilled workers.
5. Immigration reform proposals will begin to take shape.
6. Keeping up with technological changes affecting work.
7. Using social media as an effective recruiting tool.
8. Implementing Affordable Care Act provisions.
9. Avoiding worker misclassification.
10. Dealing with federal agencies and various
“It still remains to be seen how rapid economic growth may be … but based on
the assumption of growth, there will be a lot of people that will start looking
for new jobs,” Patrick Wright, professor of business management at the
University of South Carolina's Darla Moore School of Business, told BNA Jan.
“The perception is always that the grass is greener on the other side,” he
Wright said that in times of economic recession, employees typically feel
under-appreciated. As the economy improves, he said, employees will want to
consider all of their options.
“Employers need to identify key employees from entry-level to upper-level
management and take the appropriate steps that are unique to their businesses to
retain these individuals,” Lonnie Giamela, a partner in the Los Angeles and
Irvine, Calif., offices of Fisher & Phillips LLC, told BNA Dec. 28. “It's
thinking outside the box,” he said.
Giamela recommended employers consider merit pay increases, projects that
increase an employee's responsibilities, or fringe benefits like flex time,
telecommuting, or technologies to keep employees happy.
For example, he said, a young employee who lives in a city but wants to work
at a company in a suburban area may want some sort of transportation benefit or
transportation subsidy. “Employers will need to do these kinds of things more
and more to incentivize employees to stay,” Giamela said.
Bob Carragher, the senior state affairs adviser in SHRM's Governmental
Affairs division, said Jan. 9 that work flexibility will be a big topic for HR
“It's an area that has started to catch on in the Congress,” he said during a
meeting of the Human Resource Association of the National Capital Area, the
Washington, D.C., chapter of SHRM. “The president and particularly the First
Lady are very interested in more and more employers embracing [flexible work
Employers and HR professionals will likely experience challenges associated
with changes in company leadership, as baby boomer leaders give way to
Generation X and Generation Y leaders, experts said.
Moreover, many Generation Y, or millenial, employees who are now ascending
into mid-level management positions are less concerned about long term
employment with a company, and more concerned about what the company can do for
them, Giamela said.
Additionally, younger employees are asking for different benefits than the
baby boomers. “These are the same individuals who got trophies for
participating, not winning, in sports,” Giamela said. “They seek
Schramm said HR professionals must also consider just the numbers of the
generation shift: Generation X is a much smaller population than the baby
boomers meaning there will be a smaller pool available for replacing retiring
corporate leaders. While the millenial generation is larger than Gen X, they may
not be far along enough in their careers to fill the gaps, she said.
Alternatively, some employers may be dealing with baby boomer employees who
are staying past the age at which they were expected to retire, Wright said.
Employers may have issues retaining talented employees blocked from
promotions by co-workers choosing work over retirement, he said.
According to Wright, the key to a successful shift between generations of
employees will be in knowledge retention. HR must connect employees from
different generations to keep that knowledge in-house, Wright said. One option
for retaining such knowledge, he said, is to find ways to let people retire and
still work part-time.
Employers may also experience challenges finding and developing skilled
workers in labor industries such as manufacturing, Wright said.
The high school-to-university system is designed so that guidance counselors
are focused on sending graduates to college, but there are some students who
would do better in a skilled trade, according to Wright.
Until that mindset is changed and individuals are trained in these trade
school professions, attrition rates at universities will continue and labor
industries will still be “strapped for appropriate workers,” he said.
According to data from HR consulting firm Towers Watson, there is a
“significant shortfall” of talent in the United States, in part due to changing
workforce demographics, Ravin Jesuthasan, global practice leader of Towers
Watson's talent management practice in Chicago, told BNA Jan. 3.
Jesuthasan said there is a gap among college-educated talent in terms of
skills that are relevant to today's industries. Eventually, he said, these kinds
of shortages will come to manifest in terms of reduced output in gross domestic
Immigration also plays a major role in talent management, Jesuthasan said. In
prior decades the United States imported high-caliber talent from around the
world, but that has diminished due to uncertain immigration policies, he
Comprehensive immigration reform is likely to be on the agenda of the Obama
administration later this year, Carragher said, or “definitely by next
“Immigration reform is clearly on the horizon,” he said, “and [President
Obama] knows it's going to be a tough issue for Republicans, particularly with
the requirement that there be a road to citizenship for folks currently in the
The Department of Homeland Security announced June 15 and launched two months
later, deferred action for childhood arrivals (DACA), a policy that averts
deportation of and provides work authorization to illegal immigrants who came to
the United States as children and who meet certain criteria.
“Regulatory action will be coming out to basically identify the framework of
how the administration is still going to implement this,” Carragher said. “I
think it will be coming out in the next six months. That's something to be aware
Carragher said employers have expressed concern about what would happen if,
for example, an employee acknowledges where and how long he has been employed in
an effort to prove he has been working in the United States. “If that happened,
the employer would be a target for an audit,” he said.
In 2013, companies will be much more “nimble” in how they tap into the
“virtual workforce” that is now accessible due to technology advances,
Instead of hiring one individual to have a job with many tasks, companies
have the option to use outsourcing, contract employees, part-time employees, and
consultants via the internet to accomplish specific tasks, he said. For example,
there are multiple websites available to HR professionals to find and hire
software writers and application creators for specific projects, he added.
“This [trend] is causing companies to challenge the very definition of a
job,” according to Jesuthasan, because they can now be accomplished at less cost
to the employer through this “piecemeal” process.
Technology, specifically social media, will also likely affect the way HR
views recruitment, Schramm said. According to data from SHRM, more than half (56
percent) of surveyed organizations used social networking websites in 2011 when
recruiting potential job candidates. That was a “significant increase” from
2008, when a little over one-third (34 percent) of organizations were using
these sites as a recruiting tool, Schramm said.
However, she cautioned that easy access to potential candidates on social
media sites has the potential to create an HR mentality of “I can always find
the perfect person for the job” instead of developing that talent
Obama's reelection victory means efforts to repeal and replace the ACA are
essentially “dead,” Carragher said. House Republicans might lead efforts to
fine-tune the federal health care law, he added, “but they're not going to
Implementing regulations related to the ACA are being promulgated almost
weekly, Carragher said. In 2013, areas HR practitioners charged with
implementing the ACA are focusing on include:
flexible spending account changes: Effective in 2013, the ACA requires a
health FSA funded through a cafeteria plan to limit pretax employee salary
reduction contributions to $2,500 per year.
payroll taxes and retiree drug subsidies: Employees' share of the Medicare
tax on wages in excess of $200,000 (or $250,000 for joint tax filers) increases
in 2013, SHRM noted. Employers will no longer be permitted to take an income tax
deduction for the Medicare Part D retiree drug subsidies they receive from the
notifications:Employers must notify workers by March 1 about the new health
care exchange program that is to take effect in January 2014 under the ACA.
Workers must be provided with a basic communications package that: describes the
exchange and its services, provides contact information, explains the percentage
of essential health benefits provided, points out that employees who buy
insurance from an exchange can lose the employer's tax-free contribution to
health coverage, and identifies whether employees are eligible for a premium tax
credit if they buy a plan on the exchange.
reporting on W-2s: In 2013, employers must begin recording the aggregate
cost of employer-sponsored medical coverage on each employee's Internal Revenue
Service Form W-2, Wage and Tax Statement.
health: Guidelines requiring nongrandfathered U.S. health insurance plans to
cover women's preventive services, including contraception, without charging a
copayment, coinsurance or a deductible, take effect Jan. 1, 2013, for most
plans, SHRM noted.
The ACA also will have implications for how employees are classified within
the company in 2013, Jesuthasan said, as the number of full-time equivalent
employees gains importance in terms of employer health care requirements.
Overall, employers should reassess how employees are classified, such as
part-time, independent contractors, or consultants, to avoid penalties in the
event of an audit, Giamela recommended.
In a depressed economy, employers were aggressive in misclassifying employees
as independent contractors to avoid paying overtime, he said. However, Giamela
said, as the economy improves, it will be important for employers to audit their
classification practices to make sure they are compliant.
“I think the running theme for 2013 will be a whole bunch of new regulations
coming out in the second term of the Obama administration,” Wright told BNA.
“That's something that everyone will have to worry about,” he said, noting
that more action should be expected from the National Labor Relations Board, the
Equal Employment Opportunity Commission, and the Occupational Safety and Health
Administration. “These are not positive or negative trends,” Wright said, “but I
think HR professionals should be aware.”
Issues awaiting final action from the Department of Labor include a proposed
rule to expand military family leave under the Family and Medical Leave Act,
Carragher said. That is due out soon, he said.
A DOL “persuader” proposed regulation also might be promulgated in 2013,
Carragher said. This proposed rule would expand the requirements for reporting
persuader agreements between employers and labor relations consultants.
The Labor Department updated its fall 2012 regulatory agenda Dec. 21, adding
more than a dozen new items to a list of about 70 agency initiatives on which
some action is anticipated next year. The agenda calls for the Office of Federal
Contract Compliance Programs in April 2013 to issue a final rule revising
existing regulations under the Vietnam Era Veterans' Readjustment Assistance Act
and enhancing federal contractors' affirmative action obligations regarding
protected military veterans.
OFCCP also set an April 2013 target date for issuing a final rule on
contractors' affirmative action obligations under Section 503 of the
Rehabilitation Act. The proposed rule, issued in December 2011, would increase
contractors' data collection obligations, revise recordkeeping requirements, and
for the first time, establish utilization goals for contractors employing
persons with disabilities. OFCCP received approximately 400 public comments on
the proposed Section 503 rule.
“There's a thought that OFCCP might also start delving into pay equity,”
In addition, Carragher said guidance from the EEOC could be released this
year that addresses employers' use of consumer reports and credit information
related to hiring decisions. “There was a lot of concern that the use of such
information in particular with the downturn in the economy would have an impact
on certain Americans and certain classes of Americas as well,” he said.
EEOC might also release guidance addressing whether leave is a reasonable
accommodation under the American with Disabilities Act, Carragher said.
By Genevieve DouglasRhonda Smith contributed to this report