Economy: There are strong signs of overheating in developed economies and the OECD’s composite longer leading indicator is now below its lowest point since 2009. We are currently experiencing the longest period of a sustained upswing in the world economy since GDP figures were first published and unless there is a step change in the laws of economics we can expect a significant downswing by Q3 2020. This might take place even sooner if triggered by a significant world event such as conflict with Iran or further escalation of the US-China trade war.

Pay: We predict that there will be a surge in average earnings in many developed countries during the second half of 2019, but that this trend will be quickly reversed with the onset of a recession. Real earnings are already flat or reduced in many countries such as Japan and the UK and only in Norway and eastern Europe has there been a surge in real earnings over recent years. This will come quickly to an end by Q4 2019 and unless eastern European countries substantially reduce corporate and personal taxation (including social security) there will be a sharp fall in real earnings as unemployment rates climb.

Employee relations: We predict that the long-term decline in union membership across much of the world will be reversed in 2020. This will only take place, however, if unions undertake some serious reforms of their internal structures and political affiliations. The driving force for change will be “labour displacing technologies” with unions carrying the brunt of opposition to consequent job losses. The poorly sustained yellow vest movement in France has illustrated the importance of organisation and how right wing political movements fragment easily over time. Although the prevailing trend across the world has been towards nationalism this may only be the fore-runner of a new political ideology that will not be identifiable in conventional right-left terms. One of the driving forces will be a lifestyle-led independent approach to work that will be very different from the current “gig working relationships”. Companies must be ready for this change as it will have major implications for the future of employee relations and talent management.

Income tax: Governments like income tax because it is so easy to collect. As the total revenue from income tax falls due to declining employment levels (brought about by first a recession and secondly the progressive automation of all areas of activity) then the tax rates on the remaining employees will have to either increase, corporate tax rates rise or other forms of taxation will have to emerge. The aging populations of the developed world will also make public health systems become increasingly expensive, unless medical services can be successfully automated. It thus appear inescapable that 2020 will see a further rise in the “tax take” which in Europe could exceed. on average, 40% of GDP and begin to look like the burdensome levels currently suffered by Belgian taxpayers.

New laws: Employment laws, like taxes, grow faster than ever they are repealed. We have already seen a huge growth in needless bureaucracy develop in Europe as a consequence of GDPR. This is now spreading across the global through a series of look-alike laws. There is also a rapid rise in the number of practically difficult laws in the USA that are likely to spread both between US States and across the rest of the world. One prominent example is the New Jersey Equal Pay law that applies the principle of equivalent worth to a string of protected characteristics other than gender. Numerous court cases are also spreading unjust practices – such as the UK EAT ruling on holiday entitlements for part-time workers and the recent Sullivan v. Sleepy’s LLC case in Massachusetts that entitles commission-only retail employees an entitlement to overtime pay.

How prepared is your organisation even if just one of these predictions is realised? How do you stay in touch with changes in the probability of outcomes unless you are part of FedEE? No other organisation offers insights based on a deep understanding of underlying forces and is prepared to share them – however uncomfortable many potential outcomes may be.