Prediction #2 is dead on because HRO providers are realizing that HR cannot be easily consolidated across multiple clients for the vendor to receive economies of scale, which makes the savings opportunities miniscule. Aggressively priced deals (which they must be for clients to justify outsourcing) will put the vendors upside-down given the guaranteed software upgrades, conversions, and service offerings the vendor will need to provide as part of the cost of services.

Prediction #3 horrifically reflects the reality of modern HR teams, which have 5% of their budgets allocated to strategic staff/initiatives, and the other 95% allocated to providing paychecks, self-service portals, and holiday event planning. The rare company with a strategic Chief People Officer makes the workforce BETTER. Look at GE as an example of a solid HR team that develops leaders and the workforce.

Prediction #4 is absolutely true. When I ran a part of a large Fortune 100 company’s strategic sourcing team focused on services, I witnessed first hand the poor service, high costs, and undermanaged vendor relationships. Absolutely every deal can be renegotiated without switching costs to receive a 2-8% price break. Almost all the vendors have performance issues that are the result of HR professionals managing what amounts to an operation. Take Leave of Absence vendors, which manage LOA events for company’s employees. Most companies are very unhappy with these arrangements because they are expensive, do not provide the level of reporting necessary to understand the cost and root cause of LOAs, and because the service provided by the vendors is substandard. More pressure can be put on HR vendors, and HR professionals should actively consider changing vendors to find better performance.

Regarding prediction #1, I agree completely. However, I would suggest that you consider that employers show absolutely no loyalty to employees. With previous generations, that was a slap in a face and a rude awaking to the reality of cold-hearted business in tightly competitive markets. With the X and Y generations, it stimulates their “what’s in it for me” mentality and encourages them to change companies. Honestly, companies need to find the right way to change, but maintain employee loyalty if they want the right human capital assets to compete. X and Y generations see the big time paychecks made by senior executives and the jealousy and unrighteousness of the pay differential drives them to seek new companies. In short, I’d take your prediction #1 and say that companies run by baby boomers will not be able to manage their workforces, which will erode the competitiveness of US firms.