Top HR Trends for 2024

How the World Around Us Impacts People Strategies

The world around us impacts employers people strategies. From the economy, worker demands, and the rise of artificial intelligence (AI), employers must continually adapt their initiatives to the ever-changing environment and stay abreast of HR Trends.

Economy

• Low Unemployment
• Inflation is easing but still relevant
• Increasing interest rates

Worker Demands

• Pay
• Total Rewards
• Flexibility
• Strikes

AI

• New efficiencies created
• Challenges with confidentiality and accuracy
• New opportunities developed

For the first time, there are five generations in the workplace, and each generation has unique motivators and responds differently to communication styles. Managers must recognize these differences and have cross-generational skills to be effective.

Adding to the complexities, there are more job openings than unemployed workers.  Since the pandemic, job openings have steadily increased while unemployment has slowly declined. According to a November 2023 article by the U.S. Chamber of Commerce, there are 9.5 million job openings compared to 6.5 million unemployed workers.  The decrease in labor force participation is related to:

• Health concerns
• Childcare
• Desire by candidates to add new skills before returning to the job market
• Early retirements
• Continued low immigrants
• A decrease in new business starts

As organizations plan their future HR strategies, they face three key challenges.

1. Attracting the Right Talent
2. Improving Leadership Development
3. Meeting Higher Total Rewards Demands

#1:  Attracting the Right Talent

Rated the top HR challenge for the third consecutive year, “Attracting the Right Talent ”is a moderate to significant challenge for 92% of HR Trends survey respondents.  In 2021, at the height of the pandemic and while employers were adjusting to the new remote and hybrid workforce, enhancing employee engagement claimed the number one spot. However, while still a priority, it has dropped to the number four challenge for 2024.  

Retention and Engagement

Attracting talent starts with retaining your employees through your organizational culture and engagement. In our 2024 Worker Experience Survey, we asked QTI external candidates and applicants, “What would make you leave a job?”  Almost half, 46%, stated they would leave a job due to the work environment or organizational culture. Coupled with 41% of HR Trends organizations experiencing higher turnover than the previous year and only 37% of responding organizations stating their employees are highly engaged, it is not surprising that a focus on employee engagement and retention is critical.

In addition to the work environment, why are employees resigning?  Well, it depends on who you ask; for employees, they state work/life balance, the work environment, organizational culture, and compensation.  However, employers view it differently – career development, compensation, and retirement are the top three reasons employees exit an organization. Getting to the root cause of resignation for your organization is a significant step in retaining and engaging your talent.

Managers play a role in retaining and engaging employees as well. A recent Gallup article states, “70% of the variance in team engagement is determined solely by the manager.” Managers can take significant strides in improving retention and engagement by trying these five steps:

1. Make recognition a regular agenda item.
2. Show employees you care.
3. Advocate for employees’ ideas.
4. Commit to and provide feedback and employee development.
5. Understand barriers and work to eliminate them.

Employee Expectations and Flexibility

Another core driver of attracting, retaining, and engaging employees is to understand employees’ expectations. According to a Gallup article, expectations and employee engagement drivers have changed over time. Today, employees desire their work to have a purpose and crave development from a “coach” who provides ongoing feedback rather than a traditional annual review. They want to build their strengths and have a job that offers flexibility and work/life balance.

Prioritizing the employee experience and using an Employee Value Proposition (EVP) are vital strategies for attracting and retaining talent that genuinely fits an organization. 80% of HR Trends survey respondents state that a great employee experience is a strategic priority for their organization, but only 25% of organizations have a defined EVP. Employers who implement EVPs as part of their employee experience will stand out from the crowd of other hiring organizations.

Is a Great Employee Experience a Strategic Priority for Your Organization?

Flexibility is an expectation of today’s workforce, and employers are responding. 90% of HR Trends Survey organizations have and will continue to offer remote work arrangements. The most common flexible arrangement is for select jobs or employees to be allowed to work remotely.

Remote Work Policy

To make flexibility successful, organizations must embrace it and can start by asking employees:

1. What do you like about remote work, and what gets in your way?
2. What do you like about being in the office, and what gets in your way?
3. Set expectations and ensure you give a purpose for coming into the office.

Flexibility is here to stay and plays a vital role in employee retention and DEI initiatives. According to the Harvard Business Review, “90% of employees who identify as female, caregivers, LGBTQ+, or having a disability consider flexible work options an important factor when deciding whether to stay in or leave their job.”

Attraction Strategies

To attract high-quality candidates, it is essential to be prepared. Think about the opening as a new opportunity.  Yes, it is necessary to find the right skill set but look at the future strategy. What skills and requirements are needed for the job in the future, and how does that align with the organization’s future strategy? Then everyone, from the hiring manager to the supervisor to anyone with a voice in the process, must be on the same page regarding the candidate profile. Being prepared helps make the recruitment process move forward seamlessly.

Keys to Attracting High-Quality Talent

• Be prepared before you recruit.
• Align your communication to your mission and purpose.
• Have a user-friendly application process; think mobile first, as many people review and apply for jobs via their phone.
• Provide prompt and personalized communication – let all candidates know their status in the process.
• Act fast.
• Provide clear instructions for interviews.
• Be respectful.
• Use technology to create efficiencies without losing personalization.
• Keep the process consistent.
• Remember that the candidate experience continues through the employee experience.

Additional recruitment strategies to consider include the following:

• Expand your talent pool by forgoing the traditional education and experience. Instead, hire for potential and fit.
• Upskill or reskill talent. Nearly 100% of HR Trends survey respondents support upskilling, and another 83% support reskilling.
• Ensure your recruitment practice supports DEI initiatives.  It cannot just be a buzzword. 70% of organizations reported finding qualified diverse candidates a challenge.  To overcome this challenge, consider the reclassification of requirements to increase the diversity of the talent pool.
• Use a contingent workforce to help with seasonality, coverages for leaves, and the related. 67% of HR Trends survey respondents state that a portion of their workforce comprises contingent workers.

#2: Improving Leadership Development

2023’s #6 HR challenge, “Improving Leadership Development,” jumped four spots to #2 for 2024, with 84% of respondents rating it a moderate to significant challenge.

Several strategies can be used to improve leadership development, including:

• Assessing Potential and Performance
• Formal Training
• Strategic Action Projects
• Coaching and Mentoring

Assess Potential and Performance

9-Box Performance and Potential Grid

The 9-Box Performance and Potential Grid is commonly used to evaluate an organization’s talent pool and identify potential leaders. Employees are plotted across the grid to assess their performance and growth potential.

Hogan High Potential and Leadership Forecast Reports

Leadership Forecast Series gives leaders the developmental insight they need to succeed by gaining strategic self-awareness to leverage their strengths, avoid behaviors that get in the way of success, and gain insight into the culture they create for their teams.

High Potential Report helps employers determine who will most successfully establish a leaderlike reputation, guide teams toward productive outcomes, and deliver results.

Trusted by 75% of the Fortune 500 for leadership selection and development, Hogan’s Leadership Development Assessments cultivate strategic self-awareness so employees, leaders, and businesses can all reach their highest potential.

360 Feedback

The best leadership development programs give leaders a snapshot of where they’re at now and a motion picture of where they need to develop in the future. The Hogan 360 Feedback assessment is a multi-rater feedback tool to help individuals and leaders at any level better understand how they are perceived in the organization. Managers, peers, and direct reports receive an avenue to provide their perspective -- ultimately creating a holistic, 360 view of the leader. The 360 Feedback assessment is most effective when coupled with an individual Hogan Assessment report.

Formal Training

Another option for assessing potential and performance is through formal training.  For example, industry gatherings and certification programs are great opportunities to learn industry trends and increase expertise. For emerging leaders, consider training on foundational skills such as communication, problem-solving, and decision-making skills.  If engaging in formal training, the most crucial step is putting the most effective parts into practice and reinforcing the purpose.

Strategic Action Projects

Quiet Hiring

A new trend has entered the workplace – “Quiet Hiring.” Quiet Hiring is when an employee takes on a new role or responsibility within their company due to a need. Upskilling in this fashion can increase retention, engagement, and productivity.

According to an article by LinkedIn, 80% of workers report having been “quiet hired,” and 64% view it as an opportunity to learn new skills. While there are many development benefits of quiet hiring, employers must ensure that the “new role” aligns with the employee’s skill sets or risk creating confusion and job dissatisfaction for the employee.

Coaching and Mentoring

Performance Review

Annual performance reviews are another development opportunity for both leaders and employees. However, Gallup has found that work performance actually decreases for "approximately one-third of employees." Why? The conversations often cover problems or roadblocks from the past, situations that have likely already been resolved. Plus, feedback comes in one session and can be a lot for an employee to digest.

To make performance reviews more successful, consider rethinking the structure of the review. Rather than an annual review, Hogan recommends breaking yearly reviews into "three segments of 20-25 minutes at intervals of at least two days."

1. Inventory Strengths: discuss the employee's talents and accomplishments.
2. Start and Stop Doing Feedback: share the manager's expectations for what the employee should start and stop doing, including the "what" and the "how."
3. Create a plan: the employee responds to the first two segments. Then, a plan is created, with the manager inviting feedback on any potential barriers.

Ongoing check-ins should follow this three-step process to reinforce progress on the plan.

#3: Meeting Higher Total Rewards Demands

For the third consecutive year, "meeting higher total rewards demands" is one of the top three HR Challenges. 82% of HR Trends survey respondents rate it as a moderate to significant challenge for 2024.

Compensation

When considering compensation, start by reviewing the full total rewards package and understand the different perspectives of employers and employees. Employers view the rewards in compensation, benefits, careers, and work-life balance buckets. Employees look at their total rewards as they align with their value today, their financial security, their future value, and their quality of life. It is essential to look at both perspectives and aim to bring them together in a powerful way.

From QTI’s annual HR Trends survey, the top three total rewards trends for 2024 include:

1. Paying a living wage. This rose from 43% to 51% year-over-year. In Wisconsin, the living wage for a single adult is between $16.03 and $16.40.  For two adults in the home with two kids, it is $25/hour.
2. Employees receiving individual total rewards statements. 47% of survey respondents state they use total rewards statements.
3. Ensuring employees know why they are paid what they are paid.

Across all industries, actual pay budget increases for 2023 were higher than planned. Last year’s survey indicated a 3.5% increase, whereas the actual was 4.1%.  For 2024, the planned median is 3.5%, with the overall average being 4%. The pay budget increases vary by industry, with professional and business services planning the highest increase at 4.9% and real estate, property management, and construction the lowest at 0.5%.

Pay compression continues to challenge employers, with 69% of HR Trends respondents experiencing it.  To address these inequities, 60% have granted pay increases to existing employees.

Benefits

Inflation is impacting benefits, with 20% more employers experiencing an increase in benefits cost year-over-year than our 2023 study. 55% are sharing those increased costs with employees. Core benefit offerings are still most important to employees. However, there are new emerging benefits to consider, including dream bonuses, paid fertility treatments, paid caregiver leave, and robust employee recognition programs.

Core Benefits Most Important to Employees

• Health Insurance
• Paid Time Off
• Retirement/401k
• Disability
• Dental/Vision
• Life Insurance
• Flexibility (new)

Well-Being

Mental health is a vital issue that employers address in the total rewards programs. More than 1 in 3 companies have or plan to increase their mental health program investment, an increase of 8% year-over-year. Other prevalent health and wellness program offerings include Employee Assistance Programs (EAP), mental health education, and immunization clinics. 

Ready to Learn More?

If you'd like to learn more about what's trending in HR for 2024, please contact us. You can also watch the 2024 HR Trends webinar.

Survey participants receive a question-by-question summary of survey results. To join next year's survey list, email qti@qtigroup.com. 

Survey Methodology

QTI’s 2024 HR Trends report is based on data submitted by 225 primarily WI-based employers across a variety of industries and organization sizes.  The survey submitted dates were July 17-August 14, 2023.