What to Expect in 2012

With New Years day and 2011 behind us, we look forward to 2012 and hope to see a brighter year, one filled with increased economic growth, prosperity and peace. Fortunately, leading indicators are tilting in favor of all of these directions, although expectations are modest. Here are some emerging trends for 2012.

  • Health care costs will continue to rise. In the 12 months ending in August 2011, commercial health insurance rose by 7.9%, putting pressure on companies to shift costs to employees or redesign or reduce coverage.
  • According to the National Business Group on Health, 53% of employers plan to increase the amount that employees contribute toward their health insurance premiums and 39% plan to increase copayments and deductibles.
  • Pay adjustments are expected to remain more than 20% below pre-recession increases, rising only 2.8% in 2012, versus 2.7% in 2011 and 2.9% in 2010.
  • Companies will continue to reward top performers, even if overall pay raises are smaller. High achievers can expect to get pay increases while average or marginal employees can expect to get no pay increase.
  • Difficulty attracting and retaining skilled employees will continue into 2012. A recent Towers Watson survey found that 59% of US companies are finding it difficult to attract critical skills employees and 36% report difficulty retaining employees.
  • Telecommuting and flexible work arrangements will continue in popularity due to technological advancements and increased efforts to retain key employees. According to a recent WorldatWork report, nearly 20% of the U.S. working population teleworks at least some portion of their work week.
  • Given the financial pressures and increased demands placed on employees, employers are paying more attention to employee engagement and satisfaction, focusing on work/life balance, core values, leadership and career development.
  • Social media will continue to transform the way companies relate to their employees, their customers and each other. From virtual marketing on Facebook, tracking purchase orders through twitter, recruiting through LinkedIn, or processing time sheets on mobile phone devices, the workplace will continue to change and evolve due to technology.

In light of these trends and your own circumstances, remember that there are many solutions to workplace challenges that require no financial resources, just a commitment to engaging employees and handling financial challenges with fairness and openness.

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The Advice Bites blog delivers practical, tactical, and informative guidance about the biggest workplace trends, and thoughtful insights about how you can apply them to your business.