Top 10 HR Trends 2024 for HR professionalsBlog / December 14, 2023 / with Christoph Drebes
How will 2024’s HR trends impact your organization?
As global economic conditions change, HR teams must react and respond. That’s always true, but it’s never felt truer than right now.
We find ourselves in a post-pandemic world, but COVID-19 and its long-term impacts are still being felt throughout the workforce. We’re mid-recession, with all the cost-cutting and belt-tightening that recessions always bring. We’re in the middle of a big leap forward in technology, with AI tools more accessible than ever. And we’re facing far larger issues around the globe, from climate change and extreme weather events disrupting supply chains to international conflicts that cause severe mental stress and uncertainty.
In 2024, HR and management teams are both being challenged to step up on behalf of their employees. Employees want people-first, human-centric working environments with benefits and workplace relationships to match. They want empathetic leaders who are properly qualified to lead them through challenging times. They want compensation that reflects their efforts – but that compensation doesn’t necessarily need to be salary-based.
Meanwhile, employers are struggling to find new policies that deliver high productivity, focus, and creativity. The conversation about hybrid and remote work is dragging into its fourth year and we’re no closer to a definitive solution – the list of both positives and negatives simply continues to grow.
Here at Mystery Minds, we’ve identified 10 HR trends that you should look out for in 2024. We hope you enjoy reading.
Part 1: Humanity in the workplace
1. Managing change fatigue
The last few years have been full of challenges. Many of them have directly impacted the workplace. The COVID-19 pandemic normalized remote and hybrid work, which required rapid digitization and new processes to succeed. Solutions that were hastily put in place are being rethought, and common practices that have existed for decades are being discarded or replaced.
Leaders who are unskilled and inexperienced in change management have found themselves struggling in the last years of uncertainty. They were not prepared for the scale of change they were facing, they weren’t practiced at communicating difficult decisions to their workforce, and they have struggled to be consistent in both their message and their communication. Many decisions made and presented to employees as final have been walked back, often with little regard for the impact these changes have on employees’ lives.
We’ll have more to say about this crisis of leadership later, but one symptom that more organizations will be facing in 2024 is change fatigue. Every workplace faces change constantly, and employees have a certain amount of resilience. But the pace and scale of changes have been intense in the last years, and even the most resilient employee can feel overwhelmed by constant changes to the status quo.
The risks posed by change fatigue
Change fatigue can be a serious problem for an employer. According to Gartner, employees experiencing change fatigue report:
- 42% less intent to stay with an employer
- 30% lower levels of trust
- 22% less discretionary effort
- 27% less sustainable performance
- 27% less responsiveness
In 2024, with the arrival of a recession, it is likely that the impact of change fatigue will be more present than ever. Employers should take the time to reassess their change management process, to ensure that they appropriately mitigate change fatigue. It might be helpful to identify the number of new processes that a single department or team has experienced in the last years before planning to roll out yet more change. Additionally, company-wide changes should be considered carefully, and employee representatives should be engaged in the process at an early stage.
TIP: For more on effective change management, you can read our article by Alexander Straub of changeification.
2. Rebuilding employer/employee relationships
For many companies, the last few years of constant change have led to a great deal of friction between leaders and employees.
For example, CHROs are grappling with controversial positions on flexible working. The Gartner study cited above also revealed that only 26% of companies that implemented on-site attendance requirements believed that their employees fully complied with these policies. These attendance requirements arise out of concerns about performance management, which 58% of employers say is more important than ever. 74% of employers report hybrid work making it more difficult to develop functional performance management processes.
But employees have their own concerns: almost 50% of employees view their current performance and workload as unsustainable, and a similar number report trusting their organization. With almost 50% of employees struggling to trust their employer, it is increasingly difficult to implement change effectively.
To resolve this breakdown of trust and the very real concerns held by both sides, employers will need to focus on rebuilding their relationships with employees. It is no longer enough for employer branding to be externally focused and lacking in depth. Instead, the best companies will be consciously having difficult but open conversations about what both sides need to succeed.
3. Developing a human-centric culture
So far, we’ve established that employers are dealing with a productivity crisis, a lack of mutual trust, and change fatigue. On these fronts, employers must invest in sensitive and thorough change management and better communication. But many organizations will go even further than these essentials in 2024.
The human-centric workforce has never been more important. Recognizing both the impact and the diverse challenges faced by each individual can be difficult for large corporations, but it will be essential for employee retention.
One tenet of a human-centric workplace is ensuring that employees have the capacity to take care of their physical and mental health. Not only should their working hours and intensity not actively harm their health, but employees with disabilities or chronic illnesses should be able to work flexibly in a way that enables them to have the best health possible.
Meanwhile, to protect mental health, it is not enough to only offer workplace counselling. Instead, companies should review their processes to ensure that there is no toxicity in the way they operate and expect employees to work. From toxic managers to an expectation of constant late nights working to meet deadlines, or to constantly shifting expectations and KPIs, there is much that employers can be doing to eliminate unnecessary stress.
The benefits of human-centricity
By creating a human-centric workplace, companies don’t just increase employee retention. Instead, they allow themselves to experiment with flexible working methods that can increase productivity.
For example, when reviewing user data, Microsoft uncovered the Triple Peak Day, which saw three peak times for employee productivity: once in the morning, once in the afternoon, and once in the evening. While employers should not expect employees to be available at all times of the day or night, recognizing that individuals have different productive hours and enabling them to work in their optimum focus windows allows employees to work both flexibly and more productively.
Flexibility also allows a company to tap into the “hidden workforce” of people who would like to work, and often have the skills to do so, but are shut out from traditional workplaces. The hidden workforce can include retirees who still want to work part-time, people with disabilities, neurodiverse people, people with caring responsibilities, and those without degrees or higher-level qualifications.
In a society that is facing a skills gap and a labor shortage, a human-centered workplace, designed with flexibility in mind, can be a win-win.
Part 2: Leadership under pressure
4. Responding to a crisis of leadership
HR have in many ways the clearest view of their organization’s leadership. So it is concerning that Gartner’s latest figures reveal that 75% of HR leaders say their company’s managers are overwhelmed by the growth of their job responsibilities. Additionally, 73% said that their organization’s leaders and managers aren’t equipped to lead change.
From one perspective, this is unsurprising. 1 in 5 managers surveyed said that they would prefer not to be people managers, given the choice. However, management is often the only option open to employees who wish to climb the corporate ladder. For many, their promotion to management level also preceded management training, leaving them learning on the job.
Per Gartner, the average manager has 51% more responsibilities than they can effectively manage. They often must deliver their own share of work in addition to their management responsibilities. Managers also report the highest level of “fake work,” with 59% reporting that they spend a significant amount of time on processes and administration.
With all this pressure on managers, it is unsurprising that change management and employee relationships suffer.
In 2024, many companies will review whether their expectations of managers are realistic and achievable. For those who need to invest in employee retention, it is worth building out a strong pipeline of managers-in-training who are upskilled ahead of promotion. Additionally, there should be alternative career paths for those who don’t want to be people managers, to ensure that those without the necessary interest or skills aren’t required to step in.
For some companies, it may be worth separating managers from many of their operational duties. While a manager should understand their employees’ work and be able to step in if necessary, management roles should be seen as specialist positions, especially where a manager leads a large team. Where managers retain operational duties, HR leaders will need to work with them to ensure that all processes are optimized as much as possible. These changes will create space for managers to focus on strategic goals, including change management, and provide better day-to-day support for their direct reports.
5. Looking after HR
For many years, the health and well-being of HR professionals has stood in the background, taking a backseat to other departments’ needs. HR is often the department that leads initiatives for the benefit of others, without taking adequate care of themselves. As 63% of C-Suite still see HR as a largely administrative role that doesn’t contribute to the bottom line, it can be difficult to justify additional initiatives for HR. However, there are signs within the community of HR professionals that the role is reaching a crisis point.
Research from Sage suggests that only 57% of HR professionals currently enjoy working in HR, while 62% are considering leaving the profession. There are many reasons for this pressure. First, HR is a department that often sees the first redundancies during difficult times. This was extremely visible in 2023, with People & Culture, recruitment, and DEI roles facing elimination. This reduction in headcount leads to higher expectations on the individuals that remain: 92% of HR professionals see their volume of work as either the biggest or a considerable challenge for HR.
HR is also more visible than ever. From TikTok to the leading media outlets, the actions taken by major corporations’ HR teams during crises are subject to more analysis than ever before. In addition to executing many of their C-Suite’s most difficult decisions, HR has to balance legal knowledge with PR and Employer Branding, all while not losing a human touch.
Many HR teams are struggling, and in 2024 it will be important for industry leaders to invest in support for them. Failure to do so will risk key employees leaving and important teams being understaffed and unable to execute essential strategic initiatives.
Part 3: Employee Retention
6. Rethinking compensation
Since COVID-19 and the ensuing cost of living crisis, salary budgets have been skyrocketing. In 2023, US companies raised their budget for salary increases by 4.4%, which is still well above the pre-pandemic level of 3%. This is, in some ways, unsurprising. With many employees’ pay frozen during the first pandemic year of 2020, there has been some catching up to do. Additionally, the rising cost of living has meant that pay increases have been existential for many workers.
The anticipated recession that is predicted to arrive in 2024 will relieve some of the pressure on salary increases. This is good news for companies in hard-hit sectors, who may be facing reduced revenue. However, for the sake of employee retention, compensation packages will still need to be evaluated, and there must be something on the table when it comes to annual performance reviews.
For example, the recent US and Canadian trials of four-day work weeks revealed that 13.8% of employees would value this reduction in working hours more than any kind of salary increase, and 12.2% said that they would need a 50% salary increase to go back to working five days a week. Companies in the trial also reported increasing revenue by an average of 15%, and the number of employees seriously considering leaving their roles decreased considerably. A four-day workweek is not an ideal fit for many companies, but it’s a creative option for those that are willing to consider alternative solutions.
In 2024, many companies will be forced to adapt their compensation schemes to reflect lower salary increases. Whether that involves an increased budget for learning and development (which is highly valued by younger workers in particular) or a higher number of vacation days, companies that engage fully with this exercise will find themselves better off.
7. The end of Quiet Quitting – Grumpy Staying
As the job market slows down, many employers are predicting less employee turnover in 2024. One reason is that broader economic uncertainty is leading to employees staying at companies that aren’t a perfect fit for them. In 2023, there was a perceived trend of “quiet quitting” – where employees dialed down their productivity and effort because they knew they wouldn’t be staying with their employer.
However, Nela Richardson, chief economist at the ADP Research Group, found in a May 2023 analysis that the number of people quitting their jobs has plummeted. The US Job Openings and Labor Turnover Summary also found that in September 2023 the monthly quit rate was stable at a low rate of 2.3%, compared to 3% in March 2022, at the height of the Great Resignation. As the probability of finding a new job with better terms declines, a percentage of quiet quitters are becoming resigned to staying with their employer, and they aren’t happy about it.
Per Business Insider, there are many reasons why an employee could be a “grumpy stayer”. They might have missed out on the moves their colleagues were making during the Great Resignation. They might have moved employer too hastily and discovered that the grass wasn’t greener on the other side after all. Others have simply been stuck in the same role for years.
The positive side of grumpy staying
“Grumpy stayers” aren’t determined to stay grumpy. Unlike quiet quitters, who keep their heads down and aren’t invested in improving their company, grumpy stayers have an interest in making their working life better. Handled poorly, a grumpy stayer can be a disruptive force that spreads discontent within their network. Handled well, a grumpy stayer can be the catalyst for improvements that impact all employees.
Demands from grumpy stayers include improved learning and development programs, better paths to promotion, and new challenges. To quote Erica Groshen, senior economics advisor at Cornell University's School of Industrial and Labor Relations, “Grumpiness often means feeling undervalued.” As more companies encounter unhappy employees with no interest in moving on, the challenge will be to find ways to reenergize them, convince them of their value to the organization, and use their feedback to improve.
8. Futures Literacy & Scenario Planning as key elements of success
Futures Literacy is a framework from the realm of academia that is having an increasing influence on business leaders worldwide. According to Gartner’s VP of research, Marc Kelly, “Three-quarters of corporate strategy leaders say significant pivots to strategic plans now happen more frequently… leaders who understand how disruption affects enterprise strategic and operational decisions can make small but powerful changes to prepare their teams to act on the risk and opportunities that come from volatility.”
So, there is a golden opportunity for companies that engage in futures literacy and its related exercises, including scenario planning.
For a quick introduction: Futures Literacy is the practice of assessing many possible futures for an organization (however likely or unlikely they are to occur) and evaluating the organization’s preparedness for different scenarios. The exercise relies on creativity and on the deep knowledge of the company’s resources, be they employees with particular skill sets or assets such as intellectual property. By the end of an exercise, companies will often identify possible, probable, and preferable futures, and leave with actionable next steps that can make the preferable scenarios more likely. This results in proactive rather than reactive planning.
The benefits of futures literacy
Scenario planning as described above can help an organization to future-proof itself against some of the most likely disruptions. It can help leaders identify broad weaknesses and build long-term paths towards resilience. They can identify best-case scenarios and possible opportunities and decide how they can best prepare to take advantage of disruptive events.
Futures Literacy can also help HR leaders to creatively imagine the workplace of the future. Per Professor Sabine Remdisch of Leuphana University of Lüneburg, they can use their existing data to understand how their employees are reacting to current conditions. Using this information, they can imagine or even predict how certain changes might impact their productivity and their happiness in the workplace – and far more besides. Futures Literacy exercises can also help them to imagine other changes, such as the potential impact of AI technology on their industry and how they can preemptively upskill their workforce to be best prepared.
While Fortune 500 companies have long invested in scenario planning exercises, even bringing in former defense secretaries and subject experts for their views on the development of global events, many smaller companies and those in other regions of the world are not investing as much time or energy into futures literacy. While many appreciate the potential benefits, it is easy to become bogged down in day-to-day crises. Back in 2021, McLean & Co reported that HR departments that had already created scenario plans were more likely to be highly effective through 2020. However, that covered only 17% of businesses surveyed.
In 2024, with the default mode becoming that of constant change, it is certainly time to upskill leaders in futures literacy, allowing them to practice perspective and make long-term decisions for their organization.
Part 4: Defining the workplace of the future
9. The return to office battle continues
As we’ve hinted above, one reason that the relationship between employees and employers is so fraught is the continuing debate about remote work.
An October 2023 report by ResumeBuilder revealed that 90% of companies that have a physical space say that they expect employees to return to the office by the end of 2024. Only 2% of companies that have or plan to have office space say that they will never require employees to come to the office.
Among companies that began to require on-site work in 2021, 2022, and 2023, over 70% report improved revenue, while over 80% report higher productivity. However, one must acknowledge that these are the assessments of company decision-makers, not individual employees. One area that has seen less success is the impact on worker retention – almost 20% of respondents said that this had clearly worsened following their return to office mandate.
The low popularity of strict return-to-office mandates is reflected in the range of incentives companies are offering to workers in exchange. 72% of companies said that they would offer commuter benefits, 64% said that they would offer catered meals, and 57% are offering childcare benefits. Amid all these positive incentives, lies a more ominous motivator: 28% of companies said that they would threaten to fire employees who don’t comply with company policy on office presence.
Hybrid work is here to stay
Despite the rise of mandated office time, very few companies are going back to full-time office work. Instead, hybrid work is the compromise on offer. For companies that are expecting to implement in-person work in 2024, only 19% say that employees will be required to work in the office five days a week. For companies that have already returned to the office, 36% expect their employees present on-site full-time.
Less than half of office workers, therefore, will be returning to the inflexibility of the pre-COVID era. Successful hybrid work, however, is an ongoing project. In 2024, many companies will continue to refine their policies: ensuring that office space is optimized for collaboration, ensuring that workers have the tools they need in their home offices, and above all ensuring that the company’s culture and vision remain strong, wherever work takes place.
Tip: If your company is reevaluating its hybrid work policy, use our free policy-building toolkit to evaluate your options.
10. Feeling the impact of AI
The release of OpenAI’s ChatGPT in November 2022 and GPT-4 in March 2023 has had an immediate impact on many industries. These releases brought AI to mainstream audiences, triggering immense interest in the potential of language models and other AI tools.
A language model such as ChatGPT can’t think or be truly creative, but many companies have already identified that it can make routine administrative tasks far simpler. For HR, this can be anything from drafting routine emails and job descriptions to compiling and standardizing reports. Early studies have also shown that AI has the greatest impact for low-performing employees, enabling them to keep up with higher-performing colleagues. Language models such as ChatGPT, for example, can help an employee who struggles with formulating their ideas to polish their presentations and emails.
Expectations are high for HR departments adopting AI: per a Gartner study, 76% of HR leaders say that they will lag compared to their competitors if they don’t adopt generative AI in the next 12 to 24 months. However, they are uncertain about which specific tools and technologies to adopt, and whether their teams have the necessary skills to succeed in the implementation.
Experiments in AI: what to expect in 2024
If 2023 saw the first businesses experiment substantially with generative AI, 2024 is the year of serious engagement. This engagement may require some leaders to be more pragmatic and to develop deeper understandings of the limits of AI.
Overinvesting in AI comes with risks, including questions of copyright infringement, data and privacy compliance, and the risk of placing too much trust in language models that lack the capacity to draw conclusions from the data they synthesize. There is much that is useful, but that usefulness can only be unlocked by those who understand the current limitations. But underinvesting in AI, especially AI-based skills and competencies, also poses a risk.
In 2024, many companies may find themselves disillusioned by the limitations of AI technology in its current form. However, the most successful will already be investing in AI training for employees and keeping a finger on the pulse of the latest developments. Those who have implemented futures literacy will likely identify that AI will be an increasingly important tool for HR. They will need to be prepared to take advantage of the disruption brought by more advanced iterations of current AI-based solutions.
HR Trends in 2024: A year of finessing, educating, and forward planning
HR departments haven’t had a moment to breath since 2020, and it doesn’t look as though 2024 will be much quieter. Instead, a recession will likely mean that HR professionals are more necessary than ever – whether that’s to implement redundancies, increase employee retention, assist with change management, or rethink compensation packages.
However, it will likely also mean that HR are themselves at risk, being a department that often faces redundancies itself in times of crisis. For those departments not facing job losses, the pressure will still be on to optimize costs and do more with less.
But even in difficult moments, there are still plenty of opportunities to be found. The implementation of a human-centered workplace will make companies less stressful and more pleasant places to work, while preparing them for the expectations of future employees. Revisiting leadership styles, building a leadership pipeline, and offering different support structures for leaders will relieve some pressure from HR.
Finally, embedding Futures Literacy into leadership training and an organization’s strategic planning will enable HR to get to grips with how the future of their specialism may look – from AI administrators to completely redesigned office norms.
About the author:
Christoph is an entrepreneur from Munich and co-founded Mystery Minds in 2016. Mystery Minds' mission is to make the world of work more human by creating meaningful, personal connections between colleagues. The remote-only team already works with over 250 international companies, helping them to strengthen internal networks and overcome silo mentalities.
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