HR Trends in 2016 | Netchex Cloud-Based Payroll Software

1) The Time is Now, To Start Preparing for the Department of Labor Overtime Rules

In June 2015, The U.S. Department of Labor (DOL) release their proposed overtime regulations. In a recent article, HR expert, Paul Decamp proclaims 2016 as the time for HR professionals to master the skill of consultation in order to guide others on what to expect around the changing regulations.

What is Changing?

The revision is updating the long-standing white collar exemption within the Fair Labor Standards Act. This exemption excludes certain executive, administrative and professional employees from federal minimum wage and overtime requirements. Employees generally must be:

1. Salaried employees whose pay is not subject to variations in quantity of work performed
2. Paid more than a specified salary of $455 a week or $23,660 annually
3. Primarily perform executive, administrative or professional duties

The second requirement, known as the salary level test, has not been updated since 1975. This new proposition seeks to change that. Not only will the salary level be raised more than 50% with this change, but it will also index the overtime threshold to income, allowing it to rise with the economy.

How will it impact 2016 and beyond?

With the finalized rules, now expected to take be issued in late 2016, some companies are having to take a hard look at how they are structuring pay for many salaried employees.

According to a recent study by the Society for Human Resource Management (SHRM), HR professional are expecting a huge impact from the proposed overtime rules.

When asked about potential consequences of reclassifying exempt positions those surveyed anticipate:

  • Unbudgeted overtime costs (76%)
  • Increase in opportunities for employees to earn overtime (70%)
  • Less workplace and scheduling flexibility for employees (61%)
  • Fewer opportunities for career advancement in the company (42%)

2) Businesses are Bracing for Increased Affordable Care Act Costs

With the implementation of the Employer Shared Responsibility Provision in 2015, the Patient Protection and Affordable Care Act (PPACA), P.L. 111-148, best known as the Affordable Care Act or ACA has increased health care costs for employers with 100 or more full-time equivalent employees. Starting in 2016, however, this provision will apply to employers with at least 50 qualifying employees.

This expanded responsibility along with other provisions, lead a great many of employers to believe that 2016 will be the costliest year yet for ACA compliance.

In fact, the survey report, 2015 Employer-Sponsored Health Care: ACA Impact, found that 33 percent of those surveyed believe that the coming year will bring the largest ACA cost increases. Despite the increased cost, the survey did find that nearly all participants will continue to offer coverage in order to retain current employees and attract future employees.

3) Boomerang Employees May Shake Up the Job Market

For those looking for a new job in 2016, they may find the job market tighter than ever before. With companies reopening the doors to boomerang employees, the competition for open positions is expected to be high.

A boomerang employee is one that has left a company for any reason and later returns, typically for compensation, advancement opportunities, or family affairs.

A recent study by The Workforce Institute at Kronos Incorporated and noted that a majority of companies which previously had a policy against hiring former employees are now open to rehiring them.

Boomerangs, as they are referred to in the study, are creating increased competition for job seekers with:
40% of HR professionals saying that their organizations rehired roughly half of all boomerang employees who applied
Over half of the HR professionals and managers surveyed say they give high or very high priority to job applicants who were former employees that left in good standing.

4) Flexibility Must Become a Business Best Practice

In a recent article for HR Magazine, HR expert Ellen Galinsky stated, “flexibility is no longer seen a perk but more as a solid business strategy.” And she could not be more right. With Millennials now outnumbering Baby Boomers in today’s workforce, flexibility is a must to attract and retain new talent.

In fact, a new survey from Ernst & Young found that millennials are more likely to change jobs or careers, give up promotion opportunities, move their family to another place or take a pay cut to have flexibility and better manage work and family life.

But Millennials are hardly alone in the demand for workplace flexibility.’s 2015 Workplace Flexibility Study reports that 75% of employees ranked flexibility as the top benefit employers can offer them.

It behooves employers to offer flexibility options to their employees. touts the top benefits of flexibility as improved employee satisfaction, increased productivity and retained talent.

A real-world example of the benefits of offering Workplace flexibility has is the case of Vodafone. In March of 2105 the telecom company announced that it would offer its global employees 16 weeks of paid leave and allow new mothers to work 30 hours a week at full pay for six months after returning from maternity leave. An analysis of the policy by KPMG found that business worldwide could save an estimated $19 billion by adopting a similar strategy.

According to Boston College’s Alfred P. Sloan Foundation, workplace flexibility practices generally fall into three basic categories:

1. Flexible Work Arrangements, which encompass variations in work schedules
2. Time Off, which includes arrangements for periods away from work
3. Career Flexibility, which addresses career development at various career stages

In 2016, companies are expected to continue the increase of development of flexibility programs heralded in 2015. A helpful resource in building such programs is the Families and Workforce Institute’s Workflex and Telework Guide: Everyone’s Guide to Working Anywhere.

5) Generation Z is Beginning to Enter the Workforce

In 2016, the first group of Generation Z will start entering the workforce. Born between 1994 and 2010, this diverse generation will usher in a tech-savvy workforce that is focused on work-life balance.

Research show that Generation Z workers will be difficult to retain with the majority expecting to work for their first job for 3 years or less. To retain these workers, employers need to understand that more than any previous generation, this generation will focus on opportunities for growth and work-life balance over salary.

Generation Z are also most likely to thrive in flexible work environments with 46% reporting that they thrive best in Co-working or Home Office types of environments. However, as the first generation primarily reared on interactions via computer or smartphones, Generation Z may need more extensive training on customer services than previous generations.

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