Predictions for 2012... Do you agree with the HR Metrics Coach?


It is my favorite time of year!  No, not the holiday season or my son’s birthday.  They are wonderful but, let’s be honest, a little stressful.  No, this is the time of year when we look both back (which satisfies my inner historian) and forward (which delights my closeted economist).  I have studied my version of the stars, census data, labor statistics, weather patterns, consumer spending/business investment, etc.  As an amateur futurist, let me share my outlook for 2012. 

Economic Predictions for 2012

  • The stock market will continue to feel like a roller coaster with sudden drops and increases, and the media will delight in the use of superlatives…i.e., largest one-day drop since November 29, 2009 et al.
  • Food prices skyrocket, starting with fresh produce and moving on to meat and processed foods.
  • Oil prices will be relatively stable keeping US gasoline prices between $2.75 and $3.50 per gallon.
  • 2012 will close with a US unemployment rate ~6.8%.
  • House marketing will remain stubbornly static except for Miami, Houston and LA County markets.

With the recent stock market upswing that drove the S&P 500 Index to its largest weekly gain since 2009, you might think I am a pessimist.  I can assure you, I have been accused of being an optimist on more than one occasion; personally, I fancy myself a realist.  You can read one of my sunnier prognostications at:


So why do I believe 2012 will feel like 2011 déjà vu?  In a word, “politics.”  From dysfunction in Washington, DC; extreme US state legislation; a Europe with no politically palatable solution for Greece or any of the weaker states of the EU; instability in China and the mixed blessing of a growing middle class; and India with its own recession, corruption and struggle to balance economic progress against rights of local populations, the world is grappling with a level of change not experienced since the first World War.

 “Business loves gridlock in Washington,” Bob Brinker would tell his audience every Sunday afternoon while I was in college.  I was an avid talk radio listener of WLS in Chicago or KMOX in St. Louis, but since moving to Atlanta in 2001, I stopped listening regularly.  Brinker over simplified the issue!  What business loves is certainty, and the 1990s gridlock in the nation’s capital meant either no change or minimal change.  It was not the “gridlock” that made business thrive; it was the certainty and confidence in the political and global systems.


Since the 2008 collapse of the US stock market, we have been trapped in a cycle of uncertainty solidified with the 2010 mid-term elections.  The reality is until Congress is willing to confirm Treasury leaders and establish regulations so banks can fully understand their risks and responsibilities, the entire economy will remain in its current malaise.  Thus, regardless of how low interest rates go/stay, the housing market cannot recover, business world will not make long-term investments and consumer confidence will not rise.  As 2012 is a Presidential election year, nothing more substantive than slogans and school lunch type regulations will pass the Congress, and no Presidential policies that require Congressional acquiescence will have a chance to take effect.  Therefore, relief will not occur until after November 6, 2012.

But all our woes do not lie just with the federal government.  Recent state legislation from both sides of the aisle has exasperated recovery from ill-considered immigration “reform,” “union busting” efforts, and foreclosure modifications that are too little, too late.  It is the immigration legislation from Arizona, Alabama, and Indiana, among other states, that will have far-reaching economic impact on the US and global markets in 2012 and beyond. 


As Tom Surtees, Alabama’s Director of Industrial Relations defending their law, was quoted in Business Week, “I don’t consider this a labor shortage…We’re transitioning from a business model. Whether an employer in agriculture used migrant workers, or whether it’s another industry that used illegal immigrants, they had a business model and that business model is going to have to change.”  Mr. Surtees is absolutely correct; the business model will need to change which means higher food prices.  These higher prices will not just affect Americans but global markets as well.  According to the US Department of Agriculture, “The United States is now the world’s largest agricultural exporter. The value of agricultural exports equals nearly one-fourth of farm cash receipts…1 out of 3 acres are planted for export.” 

And I have not even referenced the Mayan “prediction” that the world will end in December 2012.  The much hyped “end of times” will increase personal stress and individuals’ outlooks of the future. 

As a Manager of People or an HR Professional – What can I do?

Obviously, the issues I highlighted above are bigger than your organization, even than any single government, so it would be easy to throw our collective hands in the air in despair.  It is rare, outside the golf course, to get a real-life “mulligan,” so the first thing I am advising clients is “knowing what you know now about 2011…what would you do differently in managing your people?”  The most thoughtful answers have been around stress reduction and resource prioritization.

We know long-term exposure to stress or chronic stress can lead to serious health problems. Chronic stress can cause an increase in blood pressure, suppress the immune system, increase the risk of heart attack/stroke, contribute to infertility, induce weight gain and trigger psychological disorders.  What that translates to in human capital terms is lower productivity (through absenteeism or reduced cognitive ability) and increased expenses for related health care.

In a future blog, I will address ways human capital professionals can inoculate their workforce against the chronic stress of a turbulent environment.

 (Here's some more... Just for fun!)

Political Predictions for 2012

  • The Supreme Court upholds the Patient Protection and Affordable Care Act (aka, Obamacare) in a 6-3 decision written by Chief Justice Roberts.  Scalia writes a scathing dissent that would make Professor Posnerproud.
  • There will be an October “surprise” – a large drop in the unemployment rate and increase in non-farm payroll.
  • President Obama wins re-election in a hotly contested race.

Pop Culture Predictions for 2012 

  • Despite what the tabloids say, Brad Pitt and Angelina Jolie will not get married, break-up or have/adopt another child. (I am going a little out on a limb re: the child)
  • The Avengers will be the highest grossing movie of the year and even crack the top five (5) domestic “all-time” box office hits.  The Hobbit will do better globally but with a December release date, it will not take any 2012 honors.
  • Participation in organized religion and service organizations will increase.
  • Perfume/Fragrance will replace Nail Polish as the “new lipstick.”
  • Neil Patrick Harris will be offered Regis Philbin’s chair on Live with Kelly.
  • My beloved Chicago Cubs will finish 2nd in the NL Central but never really be in the Wild Card race.
  • As part of the continuing Detroit renaissance, we will see a repeat of the 1968 fall classic with the Tigers inexplicably topping the Cardinals in 6 games.