As we enter 2024, many organisations are reflecting on the year we leave behind and the one that is ahead. Which HR trends should you expect to see?
It’s not just individuals who recognise the significance of the New Year, however. Organisations also use this crossover point as an opportunity to track previously predicted trends, and research developing ones that could inform how they operate, and where they should apply a specific focus.
At the forefront of so many of these business trends – and so witnessing them firsthand – is the human resources department. In supporting employers and employees and responding to personal and professional challenges, HR staff increasingly consult with external HR specialists, who can provide top-level insights into broad trends. They might help to explain why you are struggling to fill a particular vacancy, for example, or provide strategic guidance in a situation where you would like your employees to return to the office.
So, what does 2024 have in store for HR departments? Which trends are likely to develop, and have a tangible impact on your workplace? To answer both of these questions, it’s important to look back at the year we’re leaving behind, and what it says about where we’re headed.
What were some of the key HR trends in 2023?
The past year has been defined by a persistent cost-of-living crisis triggered by high inflation rates. For the UK’s 32 million workers, the value of their hard-earned pounds has diminished, no longer stretching as far as it did before the pandemic. In fact, reports suggest that they’re experiencing the most substantial decline in spending power for seven decades.
Against a backdrop of high costs, many HR teams have observed a noticeable surge in discussions surrounding salary adjustments, and even an increase in the number of employees leaving who cite pay as the main contributing factor. To plug this gap and maintain employee satisfaction, businesses might enhance their selection of holistic benefits such as increased holiday entitlement, flexible working hours, dog-friendly office space, and tangible wellness programmes. All of these things contribute towards an enhanced working environment, an important factor given that Gen Z would reportedly like their jobs to provide an experience, and not just a paycheck.
Employees might have navigated 2023 with diminished buying power and enhanced job benefits, but they were also introduced to the astounding and potentially disruptive power of generative AI. Despite being released to the public at the end of 2022, it was in 2023 that many of us used ChatGPT for the first time, and saw that with continued development, this tool could lead us into the next industrial revolution.
Seeing the potential of AI, many organisations began researching the need for an artificial intelligence policy at work, wanting to know what the benefits were to having one and what should be included. Employees, too, recognised that their jobs might change significantly – maybe even disappear – in the future, and so pushed their employers for more training opportunities, and ways to develop skills outside of their current roles. In doing so, it is hoped that they can survive the potential disruption posed by AI.
Having taken a brief look back at 2023, we are now equipped to look forward to 2024 and the trends that look likely to accompany it.
Which three trends are going to shape 2024?
The list of things that could influence an HR department’s role and responsibilities in 2024 is long and varied. Here, we have boiled it down to three major trends we expect to shape the working world over the next year.
The development of artificial intelligence
While 2023 was the year in which we were introduced to the possibilities of AI, 2024 is likely to be the year when those possibilities are realised. Initially, the concept of artificial intelligence was seen by the media as something that posed a threat to our jobs, and (in typically alarmist fashion) could even start World War Three. The truth is that Ai is another tool to be harnessed by organisations, and one that can make processes more efficient, and people less prone to errors.
Sorting through CVs as part of a recruitment campaign, for example, can be done in a fraction of the time with AI. It can also – depending on the data you feed into it – be done with minimal risk of unconscious bias, making the process a far fairer one.
Training, too, might feel the benefit of AI intervention. If you are in charge of employee development, you might choose to tailor a programme to meet the needs of the business and those of its teams. Onboarding employees could become far easier with the addition of a chatbot to answer any questions from new recruits; while performance management can be done in real-time, with feedback provided by an objective third party (artificial intelligence), removing any danger that constructive criticism might be taken personally.
While the anxieties felt by both employers and employees are likely to accompany us into 2024, a trend of acceptance also appears to be emerging – one that recognises these advanced tools can make the lives of the HR department easier.
Have you got an AI workplace policy in place? Read about the implications of not having one here.
Encouraging workers back to the office
It’s no secret that many decision-makers and managers would like to see their teams back in the office full-time. In fact, two-thirds of CEOs think staff will return to the office five days a week within the next three years. Whether this is wishful thinking on their part, or something that is realistically likely to happen, the logic behind this preference centres on three key beliefs:
- Managers can monitor employee output and performance far better in person.
- Effective communication and collaboration are easier to achieve when employees are in the same room together.
- An authentic company culture is hard to establish when employees are in different parts of the country.
The availability of time-tracking and video-calling software has helped address all three concerns, but the desire to return to on-site normality remains. As a result, in 2024 we are likely to see increasing tension between the employees who have felt the benefits – reduced commutes, more autonomy, greater flexibility, and even higher productivity – and the employers who would like to see their teams back at their desks.
If the pressure to return does ramp up, the question will be whether decision-makers opt for the carrot – rewarding employees who choose to come into the office with things like free lunches, financial rewards, and social events – or the stick, whereby employees are expected to attend the office, and face disciplinary measures if they fail to do so.
Any employer who is tempted by the latter approach should also know that, according to the Guardian, approximately 12% of employees who left their jobs in the last year did so because of a lack of flexibility. Want to know how a flexible work culture can boost employee engagement? Read the Engage for Success blog post on the subject here.
Increased pay transparency
From the first of April 2024, the UK minimum wage – officially known as the National Living Wage – will increase. Broken down into age groups, those under 18s who would have been paid £5.28 per hour before April will see that increase to £6.40. Pay for 18 to 20-year-olds will rise from £7.49 to £8.60, while those who are between 21 and22 will be paid £11.44 (up from £10.18). Anyone who is over the age of 23 will see an increase from £10.42 to £11.44, and apprentices will also enjoy an increase in their minimum wage, going from £5.28 to £6.40.
The effects of these wholesale increases on the wider economy are likely to be discussed at length by financial experts, pundits and politicians, but the most relevant conversations are likely to be within organisations. Your HR department may find itself navigating a new landscape of increased pay transparency and heightened discussions about compensation, as more employees look to negotiate their pay.
Firstly, employees may seek more clarity on how the new minimum wage rates align with their roles and experience. This could lead to an uptick in enquiries to HR departments regarding salary structures, job evaluations, and opportunities for advancement. Secondly, the potential for conversations around pay equality may intensify. Employees may compare their wages not only to the new minimums, but also to the compensation of the colleagues around them who are performing similar roles.
HR professionals will likely play a crucial role in accommodating and managing these conversations to ensure transparency and fairness, whilst also promoting the prosperity of the organisation. Additionally, HR departments might need to reassess their strategies for attracting and retaining talent in a potentially more expensive job market. One such strategy for retention might be to focus on employee engagement. Not sure how to make that strategy a reality? We invite you to read this blog post.
Conclusion
2024 promises to be a year of transition. Whether these changes are the tools you use, the location of your employees, or the way that you conduct conversations around salaries, one thing is certain: HR will play a pivotal role, bridging the gap between employer and employee to support a more successful business. Are you ready to navigate the challenges and opportunities of 2024?
Author: Pam Loch – Managing Director and Solicitor, Loch Associates Group
Photo credit: iStock
