The 5 big HR trends to look out for in 2024 in summary:
- In this blog, Cezanne HR’s Head of HR and Wellbeing Kim Holdroyd looks at the key HR trends that are likely to make an impact in 2024.
- The current economic outlook will have a key role in the workplace trends of 2024, with budgets for DE&I initiative reduced and recruitment levels expected to decline.
- It’s also expected that there’ll be a renewed focus on retention strategies, a shift back to offices and shared workspaces, and increasing efforts to engage with so-called Gen Z.
As we reach the end of another frenetic year, many HR professionals will be wrapping up their end of year operations and turning their attentions to what the new year will bring.
2023 has brought a whirlwind of challenges: from the much-publicised cost-of-living crisis, to the rise of resenteeism and, more recently, a concerted shift to getting employees back into shared workspaces. Throw in a rollercoaster of an economy and an ever-shrinking workforce, and HR teams have once again had their plates full.
However, if you thought that 2024 may offer some respite, you’d be mistaken. 2024 is set to be another transformative year for HR teams up and down the country, and one that’ll be driven ongoing economic uncertainty and the ongoing chronic skills shortage.
So, what are the key HR trends to look out for in 2024? Here’s 5 that I believe will make their mark on British and Irish workplaces over the next 12 months…
Companies reducing their Diversity, Equality and Inclusion budgets
This first HR trend of 2024 may sound a little contentious. After all, DE&I initiatives sit at the heart of positive company cultures and are expected to be a priority for businesses for many years to come. But, with the economic outlook decidedly uncertain, it’s already been reported that large numbers of companies have begun to reign in their DE&I spending to ensure books remain balanced.
“We are seeing a downturn in the importance of DE&I. Keeping that fire lit is going to be a hard task for many…DE&I leaders, as companies cut and layoffs tend to impact DE&I first.” – Madison Butler, writing for Business Insider
Unfortunately, I’m confident this trend will continue well into 2024 – unless of course the economy undergoes a rapid and sustained uplift in fortunes! Although DE&I is a hugely important topic, when finances are tight, it’ll often be one of the first HR initiatives to be scaled back – and the effects could be disastrous.
Reducing DE&I initiatives can significantly impact levels of employee engagement within a business due to the erosion of a sense of belonging, cultural alignment, and morale within the workforce. DE&I initiatives – by their very nature – encourage a more inclusive environment, offering a sense of value and respect to diverse employees.
When those efforts are reduced, it can create feelings of exclusion among underrepresented groups, diminishing their sense of belonging and resulting in disengagement. And, when we consider that levels of staff engagement here in the UK have consistently been the lowest in Europe, reducing DE&I initiatives could drag levels down even further.
Further declines in recruitment
In the first quarter of 2023, it was reported that recruitment – particularly in London – for full time positions had declined steeply. Whilst those falls in recruitment have since slowed down, I still believe that the trend for falling levels of recruitment will continue for some time to come.
At the same time, I would also expect the number of jobseekers to continue to rise – meaning we have an abundance of talent, but little in the way of avenues of employment. This is because many businesses – especially in the tech and recruitment sectors – are downsizing workforces to cope with tricky trading conditions and uncertain economic outlooks.
Even though we will see a rise in available workers in the jobs market, it still won’t solve the ongoing skills shortage or stop the ongoing shrinkage of the UK’s available workforce. As a result, companies must start thinking ‘outside the box’ about how they can ensure their talent pipelines are sustainable when budgets are tight and skilled talent scarce. It’s a topic we talk about in-depth in this article.
Renewed focus on retention strategies
The freeze on recruitment and scarcity of key skills will – I believe – see many organisations double down on their retention initiatives in 2024. Of course, retaining top talent isn’t a new issue facing the world of HR: the difference now, however, is that companies must figure out how to retain their most valuable people without simply offering higher salaries. Taking the money route will simply create inflationary pressure on an already fragile economy, and ultimately reduce competitiveness in a tight jobs market.
Companies and their HR teams must figure out how they can really support their people better without resorting to money. In particular, there needs to be a concerted effort to discover what people’s priorities are when it comes to non-financial workplace benefits that will enhance the quality of life for employees – not just be ‘nice to have’ perk.
To do this, HR teams must take the lead in engaging with their people to understand what would really resonate with them. A great way to start is using HR software with pulse survey functionality, which you can read more about here.
Moving back to shared workspaces
There’s no denying that remote working is hugely popular and appealing for many. But, I have reason to think that the honeymoon period for businesses embracing remote work is coming to an end, and 2024 will see more and more companies looking to get their employees back into offices or shared workspaces.
We’re already seeing large corporate businesses insisting workers return to shared places of work, with firms such as Amazon, Nike, Meta, Google and Apple demanding their employees return to their offices either full-time or, at least, on a hybrid basis. And the reasons why? Well, these range from wanting to improve levels of collaboration and productivity, a lack of trust, to the simple fact that valuable (and expensive) office spaced is sitting unused and derelict!
“It’s easier for executives to hold on to the old notion that people are really working if they can see them down the hall. It’s almost too hard for some leaders to comprehend a world where that option doesn’t exist, or to consider a radical new approach.” – Dan Kaplan, contributing to CNBC
If businesses are looking to attract workers back to their shared workspaces, senior leaders must look beyond their own desires as to why they want employees back. They must consider the impact a return to shared workspaces will have on working families, and how changes may affect the lives of disabled workers. If your business is wanting a return to a shared workspace but has a hesitant workforce, check out this article.
Increased engagement with Gen Z
My last HR trend of 2024 is increased engagement with Gen Z. With their growing influence and numbers, understanding and accommodating the preferences of Gen Z in the workplace will be essential for businesses aiming to thrive in the evolving landscape of the future workforce.
Two specific areas which perhaps identifies Gen Z best are a focus on work-life balance over career progression, and happiness over larger salaries. As a result, HR must be able to pivot their engagement strategies to prioritise job flexibility and wellbeing initiatives while re-evaluating traditional approaches to career advancement and compensation.
HR teams must tailor policies and benefits to accommodate Gen Z’s emphasis on work-life balance. This can be done by promoting mental health support programs, offering flexible work arrangements and also remote working options. Of course, the emphasis on remote work may go against my previous trend prediction, but this is something HR teams must give serious consideration to when building their future retention strategies.
Kim Holdroyd has an MSc in HRM and is passionate about all things HR and people operations, specialising in the employee life cycle, company culture, and employee empowerment. Her career background has been spent with various industries, including technology start-ups, gaming software, and recruitment.