The workplace isn’t what it used to be. Globalization, politics, technology, and cultural changes are changing not only what workers do, but where they do it, and how they want to be compensated for it.
Consider these 5 workplace trends for 2018 likely to impact businesses as unemployment remains low, competition for top talent increases, and workers ask for more work-life balance.
Savvy employers who want to retain their top talent should adopt policies and redesign their workplaces to embrace these trends.
1. Not Offering Flexible Work is Now a Competitive Disadvantage
According to a 2016 Gallup survey, 51% of employees said they would change jobs for one that allowed them to work more flexible hours, while 37% would change jobs if they could work from where they want at least part of the time. Job seekers are demanding a flexible work environment, and if you don’t offer that in 2018, you will lose talent to your competitors who are.
It’s more possible than ever to offer flexible hours and remote work options. Thanks to video conferencing, CRM software, project management tools, group chat tools, and smartphones, you don’t have to watch people work to know they are producing.
Below is a chart using data from Gallup showing the 20 year trend of telecommuting, with the only downturn being during the 2008 recession. The New York Times, also referencing Gallup data, reported that 43% of working Americans worked offsite at least some time last year. We could reach a milestone in 2018 where half the American workforce is remote, at least some of the time.
Even jobs that were traditionally thought of as in-office jobs are now more flexible. According to Global Workplace Analytics, “50% of the US workforce holds a job that is compatible with at least partial telework.” The Wall Street Journal published census data showing that the largest jumps in remote work are in the health care and construction industries. For example, 71 percent of doctors and health providers now diagnose and even treat health conditions over the phone or video, so they don’t need to be in the office. Acknowledging that client relationships are central to the success of construction businesses, many construction workers no longer have a ‘home base’ office and travel between different construction sites.
2. Hybrid Live-Work Spaces Are on the Rise
While more and more employees are working away from the office, some employers are trying to keep folks in the office by blurring the lines between office and living space.
Urban-based companies like WeLive and WeWork are combining work and living space to make it easier for employees to have work life balance with flexible shared office space adjacent to residential units. WeWork just announced a $20 billion valuation, bringing its value to more than Twitter, Box, and Blue Apron combined! Some companies with co-living and co-working spaces like Common receive as many as 500 -700 applications per month for an apartment.
We’re likely to see more co-living and co-working spaces in the future because they cater to millennials, who want to save money (by closely melding their living and working spaces) but also maximize flexibility and convenience in their living situations.
Co-living and co-working spaces are also having an impact on commercial real estate (CRE) development:
“Startups based on the sharing or collaborative economy, like Airbnb or WeWork, are disrupting the way organizations lease and use CRE. Companies face challenges from new competitors that are providing dynamically configurable spaces and flexible leases. Owners need to rethink their approach toward space design, lease administration, and lease duration.”
Mixed rentals have increased by about 25% over the past 7 years and appear to be a good option for employees who want more work life balance, because if they can’t work from their home, at least they have a short commute to the office upstairs in the same building.
Here are a couple examples of communal living-working spaces:
3. Employees Want Pricey Human-Centered Perks
As unemployment rates drop in the US and competition for workers increases, employees are demanding more human-centered perks. Snacks and coffee are nice and perhaps even expected in 2018, but it’s the pricier benefits that employees are asking for now that can set businesses apart from competitors.
Research done by Harvard Business Review (HBR) shows exactly what kinds of benefits employees want. Expensive benefits, such as company-paid health insurance, student loan assistance, and parental leave top inexpensive perks such as free snacks and team outings.
Large companies are already offering many of these benefits. For example Starbucks pays tuition for employees to attend Arizona State University (ASU) at $6 to $12K a year, and Etsy pays up to 6 months of paid parental leave to mothers and fathers, including adoptive parents, which for a $60K/year employee could cost $30K. Goldman Sachs even offers to pay for gender-reassignment surgery which can cost up to $50K, according to CostHelper. HR/payroll software vendors are even adding features to allow businesses to loan money to their employees.
According to Gallup, “The benefits and perks that employees truly care about are those that offer them greater flexibility, autonomy and the ability to lead a better life.”
The political environment may explain why certain benefits, such as parental leave and student loan assistance, have come to the forefront. Both of these topics were hotly debated during the last presidential election.
Three states already offer paid parental leave–California, New Jersey and Rhode Island–for employees who meet certain eligibility requirements. New York just passed a paid family leave law that will take effect January 1, 2018. Government employees already have access to 6 weeks of paid parental leave and many states are looking at changing their laws. The tipping point for a national paid parental leave policy may be this year.
And according to Student Debt Relief, loan forgiveness programs may also be changing this year. So businesses wanting to retain the best talent in 2018, may need to pony up for some bigger human-centered perks.
4. Artificial Intelligence (AI) Continues to Replace Entry Level Workers
In the 70s and 80s, high school and college grads often accepted entry level jobs like answering phones or sweeping up after clients in a salon, just to get their foot in the door. But those jobs are now being done by AI apps and robots, like website chatbots that can answer basic questions and route your query to the right person and robots that do basic chores like vacuuming.
Credence Research predicts the trend will continue by looking at how the Chatbot market might grow over the next several years.
Chatbots, as only one example of AI technology in the workplace, are replacing entry-level worker jobs like phone receptionists, marketing assistants, and level 1 help desk staff. Just take a look at the increase in shipments of consumer and office robots.
Business Insider shows in the chart below those jobs most likely to be replaced by AI. The increase in robots and AI in the workforce doesn’t necessarily mean that more people will be unemployed. It means that people’s roles will shift to jobs that require more cognitive, managerial, or planning skills that can’t be performed by today’s robotic technologies. For example, Amazon workers who used to do repetitive tasks, such as stacking boxes, are now managing robots that lift the boxes.
All these changes mean that millenials and other entry level workers are going to have to look elsewhere and adapt their skill sets to get their foot in the door.
5. Employers Will Hire Fewer Direct Employees
2018 will see fewer direct hire employees as a percentage of the overall workforce. Deloitte Insights sees growth in what they call an augmented workforce. “The shift from full-time employees to an augmented workforce (augmented by both technology and crowds) is one of the more challenging of the human capital trends on the horizon.”
Employers are supplementing or augmenting their workforce with contingent workers — whether they’re referred to as gig workers, which is slang for self-employed, freelance or independent contractors, — or outsourcing their workforce entirely through co-employment, with temp agencies now commonly referred to as Professional Employer Organizations or PEOs.
PEOs are leading the way in providing co-employment. Employees are legally employed by the PEO, but their work is directed by the business client. PEOs can pool their employee population and offer big-company benefits like health insurance to employees of even the smallest employers, while taking away the day-to-day human resource and payroll administrative work, and ensuring business compliance with federal, state and local laws.
You can see the trendline on this chart below showing that temporary and PEO jobs are going up up up. In fact PEOs like TriNet and Justworks, probably don’t even know what most of their ‘employees’ do on a daily basis, because although the PEO is the employer of record, it’s their customers, the business owners, who direct workers’ daily activities.
Expert360 states that over 40% of all US workers are now contingent and fall into the categories shown below.
The Wall Street Journal reports that gig work takes up to 35% of all jobs in some industries like media, and women are more likely than men to support themselves with temporary work. Other sources agree:
- In recent Forbes article Josh Bersin states, “we are in an economic cycle where jobs, as we know them, are rapidly changing. In fact, I’d venture to say we are reaching a time when jobs, as we know them, are going away.”
- 350K workers have joined the Freelancers union and we imagine this change toward use of freelancers, who don’t necessarily have the protection of traditional ‘employees’, will bring with it additional labor regulations.
Bottom Line on 2018 Workplace Trends
In 2018, it looks like the workplace, employee benefits, and even the nature of jobs is changing. Old fashioned top down management with industrial style office places and traditional workers are going away.
The work will still get done. It’s just that it will get done closer to where people live, like in their own kitchen. And it will be done by people who not only ask for time to take care of family needs, but expect it. Those people may be contingent workers, freelancers, or staff employees. And if business leaders really want the best talent to work for them, they’ve got to spend a bit more on human-centered perks, and make work fit into people’s lives.