2007 — is that a light or a train??

So, what does 2007 hold for the human resources community? More of the same (fortunately and unfortunately), and some new things to consider. Using my Kreskin-like powers (age-check…?), my crystal ball, and reading the Earl Grey leaves in the bottom of my Costa Maya coffee cup…

E-Learning will finally take hold. Content is rich, lower lost productivity costs are necessary and reasonable, podcasts and videoblogs make distribution inexpensive.

The war for talent will get worse. Executive talent is in high demand for the fourth consecutive year; companies must continue to add more incentives, including bigger bonuses, to their compensation packages in an effort to lure top talent from competitors and keep key leaders from walking out the door. Developing existing managers, via succession planning and professional growth initiatives, will be crucial.

Increased focus on non-executive staff development. In the face of the growing war for talent all industries, companies are spending more money to develop formalized training programs to ramp up staff more quickly. These programs can also help improve the odds of retaining employees, make companies more attractive to potential recruits, and can help firms get as much productivity as possible from a staff that may not be as large as they would like.

Outsourcing will continue to increase, particulary specific Business Process Outsourcing. Big market, getting bigger. Mid and small markets are underserved (or not served at all) by the big players, yet cost efficiencies are greater there.

Demographic issues will become even more important. Hispanics are our largest minority, immigration non-reform is emotion-laden, boomers are retiring (the workforce is aging), generational issues continue to grow, and work-life balance is becoming more important — all of this in the face of the second prediction above. Medical cost increases will continue at a double-digit clip.

Continued M&A activity will lead to further downsizing/talent shifts, and significant bankruptcies will continue.

Employee productivity must increase. Talent shortages, earnings demands, heavy M&A activity… add to that a growing need for a positive link between pay and performance, a demand for flextime, and idiotic CA laws that potentially mandate additional time off. All point to the need for increasing indiviual employee productivity.

Ethics and social responsibility are replacing “cutthroat” as the official corporate badge of honor. Transparency in dealings, pressure on corporate socialism and philanthropy… ethics are no longer “soft” skills relegated to those who can afford them. They now include CEOs, sales people, and others previously exempt. The world is watching…

HR strategy will become a business unit objective. HR has become too important to be the sole purview of human resources. Strategic-focused HR initiatives — staffing, development, succession, and performance — will become part of general managers’ lexicon. Corporate HR staffs could shrink accordingly, caught between increased strategy ownership in the GM’s office and outsourcing at the transactional levels.

Measurement of all things — including people-focused initiatives — will become a necessity, not simply a differentiator. Someones’ got to explain why we should do this over that, and when I can expect to see a return on my investment of limited capital. Measure or die.


I interviewed several hundred senior executives — all C-levels, and over 20% were CEOs. In order of significance, their top-5 short-term priorities came in as:

1. Talent management & acquisition.
2. Revenue & earnings enhancement.
3. Performance management, employee productivity.
4. Management/leadership development, performance and motivation.
5. Market pricing, share, and new product/service development.

I don’t offer these things as private or special knowledge of mine; undoubtedly, many of you have arrived at some of these same thinkings. I wanted to put this in writing since that helps me, and maybe offer as help to you as well.

Pay attention to what’s happening around you, your company, the country. It’s not important whether you agree or disagree with my predictions; just arrive at your own thinking by using something other than simple “hope.” As the author said, that’s a lousy business strategy.

Stay alert, focused, and continue to add value.

Happy New Year…!


Kevin Berchelmann

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