Last year, our team of HR experts offered some predictions about the HR trends that could impact businesses in 2023.
Some of those predictions turned out to be right on the money. We said that salary increases would stay high in 2023 (the average raise was 4.1%); we talked about pay transparency legislation (New York, California and Washington all implemented state-level laws); and we said that there was no end in sight to the debate around remote work.
Of course, we missed some things too, such as the rise of Generative AI and falling unemployment rates. Predicting the future is difficult, especially in these turbulent times!
10 HR trends to watch in 2024
So, what does 2024 hold for us? Once again, we’ve asked our consultants to look at what lies ahead and how it might affect your business. Some of the main trends to watch include:
- A turnaround in the hiring market
- Companies are developing AI policy frameworks
- Changing approaches to change management
- An increased focus on leadership capability
- The push to reduce remote working
- Employers are leaning into pay transparency
- Greater choice of wellbeing benefits
- A major generational shift is occurring
- Leave management is evolving
- Cultural alignment matters more than ever
Let's take a closer look at each and offer some advice for the year ahead.
1. A turnaround in the hiring market
The latter half of 2023 saw a cool-down in the labor market. Fortune reports that job postings are down 22.5% since their peak in December 2021, with remote work positions down by over 50%. Layoff rates are also low as companies focus on retention and upskilling current staff.
However, the overall economic signs for 2024 look bright. Experts predict a soft landing for the U.S. economy after some bumpy years, which may lead to growth and increased hiring. Analysts suggest that hiring rates may increase in the latter half of 2024, going into 2025.
All of this means that now might be the best time to think about hiring plans before the labor market heats up again. Even if you’re not hiring, it’s important to consider engagement and retention strategies to keep your best people no matter what happens in 2024.
Helios HR advice
- Review your hiring plans for the coming year
- Work on employer branding and passive recruitment to build your own talent pool
- Keep investing in retention and engagement
2. Companies are developing AI policy frameworks
In 2022, Artificial Intelligence was the stuff of science fiction. Going into 2024, AI is already appearing in everything from your Applicant Tracking System (ATS) to Microsoft Office.
AI can make certain tasks easier, but it also creates problems. For example, are your employees sharing confidential data with 3rd party sources? Is AI creating errors in your documentation? Is there a training gap affecting people who don’t use AI tools?
Most of these issues are not IT problems—they’re HR problems. The next step is to build an HR policy framework about how to use these tools, which will continue to evolve in 2024.
Helios HR advice
- Work with IT to build a whitelist of authorized AI tools
- Educate users about AI best practices and what is not allowed
- Make sure everyone receives training on any new AI-related tools or processes
3. Changing approaches to change management
From the pandemic to remote work to AI—this has been a decade of constant change. Employees are exhausted, with 77% of HR leaders saying that “change fatigue” has impacted engagement.
There’s also a leadership issue, as 82% of HR leaders say that their managers aren’t capable of managing change. The result is lost opportunities, lower engagement, and increased staff turnover.
As a result, many leaders are now focusing on new strategies for change management. This includes improved communication and better training. It also means recognizing and dealing with change fatigue.
Helios HR advice
- Communicate the reasons for any major changes, including technology adoption or new processes
- Encourage small, focused change projects instead of radical transformations
- Train leaders on change management techniques or bring in experienced change management consultants
4. An increased focus on leadership capability
Employers placed a greater emphasis on staff retention last year, which sometimes means asking difficult questions. People often say that “employees don’t leave jobs, they leave managers”, so it’s important to ask if you have the right managers in place.
Internal leadership evaluations can highlight problems, such as managers who don’t have the right skills for working with remote employees. Leadership development training can solve some of these problems, turning good managers into great ones.
2024 will see most companies continue to work on improving engagement and retention. Developing and upskilling leaders might be the most effective way to do that.
Helios HR advice
- Use pulse surveys and exit interviews to learn more about managerial effectiveness
- Work with managers to create personalized leadership development training programs
- Monitor employee engagement to identify any problem areas
5. Employers pushing to reduce remote working
Remote and hybrid work once seemed to be the future—and it’s still the preferred option for a majority of employees. However, leadership generally favors a full return to the office.
One survey estimates that 90% of businesses plan a full return to the office by the end of 2024. Large companies are taking heavy-handed measures to get people back on-site. For example, Amazon has blocked promotions for employees who don’t meet their return-to-office requirements.
Remote work is still massively popular, with 98% of employees open to the idea of at least some telecommuting. Could this trigger another Great Resignation in 2024? Hopefully not, as long as employers and employees maintain a healthy dialog.
Helios HR advice
- Talk to employees about their remote working preferences
- Try to accommodate where possible, especially for employees with accessibility issues
- Communicate openly about the reasons for any return-to-office policies
6. Employers are leaning into pay transparency
Pay transparency has become a compliance headache, with a number of state and local laws coming into force. The federal Pay Fairness Act could also potentially come into effect.
Regulatory pressure isn’t the only issue. 80% of candidates say they are unlikely to apply to jobs that don’t advertise a salary range. As a result, sites like LinkedIn have now started adding estimated pay ranges to job listings—some of which are not accurate.
As a result, some employers are choosing to be proactive about pay transparency by sharing salary data with candidates and employees. However, this can create new problems in organizations struggling with issues like pay compression.
Helios HR advice
- Audit your salary structure to identify any pay equity issues
- Stay informed about pay transparency laws, including regional legislation that may affect remote workers
- Share as much information as you can with prospective candidates
7. Greater choice of wellbeing benefits
Employee wellbeing is one of the most crucial parts of Total Rewards. During the pandemic, most people realized that salary wasn’t everything—you also need security, good health, and a sustainable work-life balance.
Employers have been supporting wellbeing by providing an increasing range of wellness-related benefits. On top of health coverage and gym memberships, there has been a rise in benefits like massage, mental health support, and paid leave.
There’s also a growing trend for Lifestyle Spending Accounts (LSAs). These accounts make it easier for employees to save up toward lifestyle and wellness benefits that suit their personalized needs. Employees can access the LSA when required or let it grow for their future benefit.
Helios HR advice
- Offer a flexible range of wellness benefits to suit all lifestyles
- Communicate wellness benefits options to the team
- Review benefit uptake and seek alternatives for any underused benefit options
8. A major generational shift is occurring
We’ve seen five distinct generations in the workforce in recent years, with Millennials working alongside members of the Silent Generation. Each generation presents a different set of HR challenges, such as their different preferences in learning styles, leadership, and benefits.
2024 will see a significant change as Baby Boomers retire in higher-than-expected numbers. While many Boomers are still working into their late 60s and early 70s, there have been 2 million more retirements than anticipated. In fact, 2024 will be the year that Gen Z workers begin to outnumber Boomers.
This has huge implications, including knowledge transfers, succession planning, and benefits coordination. Employers will have to look for ways to accommodate a Gen Z-dominated workforce, while also supporting their more experienced employees.
Helios HR advice
- Review training, leadership and engagement strategies to reflect the changing workforce
- Establish mentoring schemes to facilitate knowledge transfers
- Be alert to anything that may constitute age-based discrimination
9. Leave management is evolving
Leave is one of the most attractive benefits, especially for people who value wellness and work-life balance. As a result, many employers are reviewing the type of leave benefits they offer.
Recent research from NFP shows that companies are rolling out new types of leave benefits, such as grandparental leave (allowing employees to spend time with new grandchildren), menopause leave (for health symptoms related to menopause), and bereavement leave in respect of lost pregnancies or failed IVF.
Bereavement leave is also becoming state-mandated with new bills passed in states like Maryland, Illinois and Oregon. This can be a compliance challenge, especially if you have any out-of-state remote workers.
Helios HR advice
- Speak to employees about their preferred leave benefits
- Audit leave usage to check if people are using their allowances
- Keep a close eye on regulatory changes that impact leave management
10. Cultural alignment matters more than ever
If there’s one overall trend, it is stability. Employers want to see lower staff turnover, greater presence in the office, and improved professional development—all while adapting to the opportunities of artificial intelligence.
And the best way to create stability? A strong organizational culture founded on meaningful values and a clear mission. Cultural alignment will become one of the most important HR tasks in 2024 as businesses work to make everyone part of the same team.
Cultural alignment isn’t easy, especially for organizations with a lot of remote employees. But a team of skilled HR professionals can help nurture a unified, productive team spirit.
Helios HR advice
- Put your values at the heart of everything you do
- Look for opportunities to engage everyone in the organizational culture, including remote employees
- Use pulse surveys to keep an eye on employee engagement
Get ready to shape the year ahead
Those are some of the trends that we can see coming, but there’s no guaranteed way to predict the future. The only thing we can say for sure about 2024 is… it’s going to be full of surprises.
Surprises don’t have to disrupt your plans, though. With the right HR support in place, you can attract, engage and retain the right team to deliver your strategic goals.
Want to get your team ready for 2024? Book a free 30-minute consultation with Helios HR.
