We’ve been doing annual business and workplace predictions for our clients since 2005. This is the second year we have posted them here for wider distribution. We are different from others who publicize their predictions in one very important way – we let you know how accurate we were the previous year.
We’ll begin with a review of our 2011 predictions. Here are the five predictions we made going into last year:
• It’s beginning to feel like a recovery.
We asked an important question in 2011: “What if this is the new normal?”
It turns out that we were right. The economy was in recovery mode for most of the year, and even main street was starting to feel more confident by the end of the year. But as we cautioned, the debt crisis in Europe was a drag that is still present in 2012.
• Jobs: improving but nowhere close to being back.
We said that it would take sustained growth in the range of 450,000 jobs per month for the next 18 to 24 months to return to unemployment rate to something close to what we remember just a few years ago. And, we said that nothing much would be felt until the second half of the year.
The job growth numbers in the fourth quarter of 2011 show that we were on target with a realistic unemployment rate at 8.5% (the high end of our predicted range of 8.2% to 8.5%).
• Battle for the best heats up.
We accurately predicted that employers would pay more attention to engagement and compensation in 2011. Training budgets began to thaw from their deep freeze, and “culture” became the code word for all things related to organizational development.
• Organized labor and substantial immigration reform shut out in Congress.
We predicted that organized labor would not get its “Employee Free Choice Act” through Congress. We also said that there would be nothing significant completed on immigration reform. In hindsight, we should have gone even farther by predicting that Congress would be completely dysfunctional. And though we were right on Congress, the Obama administration may look at changes via Executive Order. They won’t be as much as he would like, but it could set up an interesting confrontation with Congress.
• The 2012 Presidential election has begun.
We said that every action would be filtered through the lens of the 2012 Presidential election. That is correct.
We also said that you could expect to see more centrist priorities prevail. We missed that one by a mile. It turns out that both the Democrats and Republicans believe they can afford to blame the other for a lack of cooperation. Bi-partisan leadership was an oxymoron for most of the year.
By my math, we hit 4.5 out of 5 for a score of 90%.
What’s Ahead for 2012
Here are five economic and workplace related predictions for 2012:
• Hold your breath – and your nose – until November. The Republican nomination should be wrapped up by May. That’s when the conversation really gets interesting. The Republicans will point to the glacial pace of the recovery. The Democrats will tout consistent positive effort. You will hear that this is a battle for the soul of America, and the accusations will get personal. In other words, it is just another U.S. Presidential election year. This will be entertaining theater unless we are hit by an unplanned calamity – like the North Korean or Iranian government doing something stupid.
• The recovery expands … sort of. If I am correct that the world economies are tied together more closely than most people imagined, the U.S. economy will experience another year of slow growth. I’m thinking 2.0% to 2.5% on average through the first six months. If I am wrong – and I hope that I am – economic growth in the U.S. is poised to accelerate. Most businesses have cut all the fat out of their operations. The focus will be on growing the top line. Election results are the variable for the end of next year, although I don’t see an outcome that dramatically changes things in the short term. The good news is that state and local governments should see their revenues flatten and perhaps grow a little as housing prices solidify and sales tax receipts pick up toward the end of the year.
• It’s beginning to feel a little like job growth. Adding two hundred thousand jobs per month normally sounds like a big deal. This recovery is not normal.
We’ll continue to see hiring, and it will occur mostly in small to medium sized businesses. Large companies will be very strategic in their hiring as they wait for the European debt crisis to play out. There will continue to be pockets of strong job availability (Have you looked at North Dakota yet?). And, there will continue to be demand for health care professionals with training (See the prediction on education that follows).
If you can help companies grow their top line sales, people want to talk to you.
Unfortunately, your opportunities for finding a new job will be diminished if you are older or less educated. I can see the unemployment rate in the 7.5% to 7.9% range by the 2012 Election Day. The key number, however, is the number of people not working or working at a job for which they are over qualified. That number will continue to be higher than the unemployment rate suggests for the entire year.
• Education matters more than ever. If you don’t have a high school diploma or GED, get one. If you don’t have at least some college or haven’t completed a trade education program, go do that. If you are close to completing a degree of any sort, stay with it. An Associate’s degree is becoming this generation’s high school diploma. Your level of education is becoming the single most important factor in landing a job. With college graduates working as Barista’s at Starbucks, the competition for the best jobs will be fierce.
One more observation about education: Don’t choke yourself with debt to pay for an education that you may not need. Colleges and universities are a business, too. Tuition is their equivalent of sales. Investing in yourself through education is smart. Taking on debt that you can never repay because your degree is worthless in the marketplace isn’t.
• The Millennials are really coming this time. I’ve been waiting to say this for several years now. The Millennial generation born after 1983 is finally ready to take their place in today’s organizations. They were ready back in 2008, but the economic meltdown hit them exceptionally hard. Expect big employment gains from this group now that hiring is picking up. And with that, get ready for a highly motivated group that works extremely well in teams and has a strong desire to succeed. You can also expect this group to challenge your thinking, your use of technology, and in some cases, your authority.
Managers will have a choice: learn to relate to this group and harness their energy to help you succeed, OR watch the best and brightest of this generation look to your competitor for an opportunity to kick your butt.
2012 has the potential to be a pivotal year in our economy. And, I am absolutely sure that, collectively, we have an opportunity to make things better. Here’s wishing you a wonderful year filled with amazing results!
©2012 by Pennington Performance Group; Addison, TX. All rights reserved. This article may be downloaded for personal and professional development. Copies may be shared within an organization, and reproduction for publication is encouraged, with the following attribution: By Randy Pennington, President of Pennington Performance Group. Contact 972-980-9857 or Mary@penningtongroup.com.