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4 Workplace Trends Every Small Business Should Know About for 2019 By staying ahead of workforce and technological trends, small businesses will be in a better position to thrive in 2019.

By David Abramson

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Eva-Katalin | Getty Images

With the New Year right around the corner, many small-business owners are likely wondering what to expect in 2019. After all, spotting or failing to recognize an important trend can be the difference between a banner year and one we'd rather forget.

Related: What You Need to Know to Succeed in 2019

Many of us are wondering, for example, how the U.S. economy will impact business. Will hiring finally ease up? How will younger generations change our workforce?

Without a crystal ball, it's tough to answer every question. But, given trends we saw this year, it is possible to make a few educated predictions about what small businesses should prepare for as 2019 approaches. Here are my top four predictions:

2019 is the beginning of the Gen Z takeover.

There isn't an entrepreneur on the planet who isn't aware of the need to understand and engage with millennials. Born between 1981 and 1996, millennials are the largest generation in the U.S. labor force and have forced brands to reimage the products they sell and the talent they hire.

As we approach a new decade, however, millennials are quickly becoming old news. The new generation, Gen Z, are true digital natives and their preferences will dictate the future of a business's success for years to come.

Born between 1997 and 2016, this group of 86 million people is expected to represent 40 percent of all consumers by 2020 and potentially influence $166 billion to $333 billion of family spending each year. By some estimates, they already have contributed about $44 billion to the U.S. economy.

Savvy small-business owners are already looking at this generation as a huge opportunity. Most Gen Zers are either still in high school or just entering college or the workforce. They're at that sweet spot where they're about to spend more for higher ticket items but haven't been consumers long enough to know what to buy. Businesses that study and figure out how to strategically market to this generation could have a built-in customer base for years to come.

In addition to adapting their marketing strategies, small businesses should also consider how they hire and engage talent as this young generation enters the workforce. Gen Zers will soon be the most skilled and tech savvy generation of workers, but they also come with a unique insight into how we work. Upwork's Freelancing In America Gen Z study revealed that 73 percent of Gen Zers started freelancing by choice rather than out of necessity. To prepare for these new hires, small businesses should analyze their workplace and strive to look through the lens of the average Gen Zer.

Whether you are building a sales team or hiring technical talent, 2019 is the beginning of the Gen Z takeover in the workforce, and small businesses should be prepared.

Related: What Seth Godin Wants You To Know About Marketing in 2019

Small businesses will need to get savvy about hiring.

With U.S. unemployment hitting a near 50-year low, vying for top talent has become much more competitive.

This difficult hiring landscape can be particularly challenging for small businesses because they must be able to attract workers who are likely considering the higher salaries and richer benefits offered by larger organizations. In fact, 67 percent of small businesses, according to the Future Workforce Report, said they planned to increase their headcount this year. But, in mid-2018, twice as many small businesses say hiring was harder in 2017 than easier. And toward the end of the year, we saw several consecutive months of shrinking small business hiring -- not because the economy was slowing but because businesses simply couldn't find enough quality candidates.

Expect more of the same in 2019, at least in the early months. Some larger companies, such as Salesforce and Elastic, not only offer very generous vacation benefits but also give employees paid "volunteer time." Small businesses will have to find ways to compete for talent, such as offering creative benefits, flexible work arrangements and a genuine commitment to employee work-life balance.

Related: 2019 Will Be a Revolutionary Year for Online Shopping

Remote work will be the new norm.

There are many office traditionalists who believe workers are much more effective when in the office. Some believe that the office is the only setting that enables effective face-to-face interaction and collaboration. What's more, they think when employees work from home, it's too easy for them to become distracted or goof off.

Evidence suggests the opposite is true -- that employees working remotely can be more productive. In fact, a nearly two-year Stanford study showed a remarkable productivity boost among telecommuters in a test group equivalent to a full day's work. Work-from-home employees, the report found, tended to put in a full day of work (or more) because they don't have to fight commute traffic only to be late to work or to leave early for life's daily errands and distractions. In addition, employee attrition dropped by about half, saving the test group about $1,900 per employee in annual retention costs. Operating costs also dropped by about $1,400 per employee since workers weren't taking up office space or using as much company power, water and facilities.

Such results are more the rule than the exception to it, which is why many small businesses are not only allowing remote work scenarios but actually encouraging them.

In the Upwork survey I mentioned, the majority (60 percent) of small businesses' hiring managers said remote work is more commonplace than three years ago. Five times as many hiring managers expect more of their team to work remotely in the next 10 years, and 38 percent said their full-time, permanent employees will work mostly remotely.

Expect this trend to continue and even accelerate in 2019 as connected technology makes remote work more feasible and beneficial. And as a small business, by adopting more flexible policies, you can increase worker productivity, reduce annual costs and attract talent from outside your local area.

Related: 4 Artificial Intelligence Trends to Watch for in 2019

Small businesses will embrace artificial intelligence.

Many of us still think of artificial intelligence (AI) as the stuff of science fiction. But, AI is already a part of our everyday lives. If you're on Netflix, machine learning algorithms regularly analyze your viewing habits, compare them to other viewers and make smart recommendations about what you might like to binge watch. Similarly, if you're on Amazon or any car buying site, algorithms analyze your web surfing habits to suggest products that might interest you.

At its core, AI is about automating the process of engaging with potential and existing customers in a seemingly personalized and caring way. Of course, any time the term "automation" comes along, observers jump to the conclusion that people will lose jobs. But, according to a recent World Economic Forum report, machine learning and algorithms in the workplace could create 58 million net new jobs by 2022.

This is highly relevant for small businesses because the ability to automate manually intensive processes and appear just as professional to customers as larger organizations means AI can level the competitive playing field.

Next year, look for small busines smarketers to increasingly use AI to power social media ads, craft and deliver individualized emails at a time they're most likely to be opened, improve lead scoring and simplify customer service processes. Adopting AI could allow small businesses to optimize their marketing efforts to attract customers that were previously unreachable.

It's critical for small businesses to recognize that everyone operates in a connected world. Businesses of all sizes are competing for the hearts and minds of consumers and future workers on the same battlefield. By staying ahead of workforce and technological trends, small businesses will be in a better position to thrive in 2019.

David Abramson

Vice President, Growth at Upwork

David Abramson is the vice president of growth at Upwork, where he focuses on growing Upwork’s user base through customer engagement and optimization strategies. Prior to joining Upwork, he held product management and customer growth roles at Jawbone and Mercer Management Consulting.

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