13 HR Trends for 2024 – Fresh Perspectives, Challenges, and More

Since its inception in the early 1900s, human resources (HR) has continually redefined its role to meet emerging challenges. Today, the function is recognized as a strategic partner, on par with marketing, sales, or R&D in its value to the bottom line and overall business success, making HR trends vital to understand.

Keeping up with the latest HR trends is the edge business owners and HR professionals need to attract talent, improve operational efficiency, and ultimately, boost profitability. That’s why we’ve used our expertise at Business2Community to curate the top 13 HR trends for 2024 and beyond. Keep reading to discover where HR teams are directing their investments, what thought leaders are predicting about the industry, and what today’s workforce seeks and values most.

Important HR Trends for 2024

From the changing nature of jobs to a pressing skills shortage, and shifting employee expectations, HR is undergoing a significant transformation in 2024. The overarching goal? To foster a more employee-centric workplace, develop the current workforce, and leverage technology for streamlined HR processes — all against the backdrop of economic uncertainty and heightened regulatory challenges.

1. Increased Complexity in the HR Industry

According to a 2023 Qualtrics report, 74% of HR leaders indicate that the HR function is now more engaged in company strategic initiatives compared to before the pandemic. To secure the best talent, HR teams must grapple with significant challenges. These include navigating a competitive labor market, a burnt-out workforce, and mounting pressure to optimize costs.

According to LinkedIn‘s October 2023 Global Trends report:

• Job seekers are intensifying their job search efforts.
• Job posts mentioning artificial intelligence have seen 17% higher application growth over the past two years.
• Employee confidence in career development is declining around the world.

Labor Market Shifts

According to the World Economic Forum (WEF), employers anticipate a structural labor market churn of 23% of jobs over the next five years. Research predicts 26 million fewer jobs by 2027 driven mainly by automation. The largest losses are expected in administrative, traditional security, factory, and commerce roles.

On a global scale, the WEF says that significant job growth is anticipated in the following sectors:

• Education
• Agriculture
• Digital commerce
• Trades

Skills Disruptions

44% of workers’ skills will be disrupted in the next five years. Cognitive skills are growing in importance, reflecting the increasing importance of complex problem-solving in the workplace.

Among the core skills valued by companies, analytical thinking stands out. It makes up 9% of the core skills reported by companies. Creative thinking ranks second, underscoring the value of workers being able to adjust to changing work environments.

Pearson’s Skills Outlook also shows that while technical skills are still crucial for many roles, looking ahead to 2026, the top five power skills needed to thrive will be human skills such as collaboration, communication, and leadership.

Workforce Diversity

By 2045, individuals from diverse backgrounds will account for over 50% of the US population. In addition, the populations of Black, Asian, and Hispanic Americans are all expected to increase. Hispanics in particular, are projected to comprise 30% of the labor force by 2060. This shift will be driven primarily by higher birth rates and labor force participation.

Lower Workforce Participation 

The US labor force comprises 167.8 million individuals, and this figure is expected to hit 169.6 million within the next 7 years. While the total number of employed Americans has now exceeded pre-pandemic levels, the rate of growth is much slower than historical trends.

The labor force participation rate has trended downward for more than 20 years with experts estimating that the overall labor force participation rate will drop to 60.4% in 2030.

Low Employee Retention 

More companies are reporting difficulties in retaining workers. According to a PwC survey, 20% of employees said they were likely to switch employers in 2022. Survey respondents cited the following reasons:

• An increase in pay – 71%
• Wanting a fulfilling job – 69%
• Wanting to truly be themselves at work – 66%
• Being able to choose where they work – 47%

2. Shifting Employee Expectations

As employees pursue more meaningful work, they are rethinking fundamentals such as:

• Pay
• Benefits
• Well-being
• Work-life balance
• Professional growth
• Values

Financial Security

In the first half of 2022, and for the first time in 15 years, real wages declined by 0.9%. Job security and business continuity are top priorities for employees, who seek assurance that their employers will remain successful while offering competitive remuneration. As of 2023, only 57% of employees are satisfied with their current pay and benefits, a 10% drop from last year. 

Aligned Values

A growing number of employees want to work with businesses whose values and company culture mirror their own. According to a Gartner report, 53% of employees want their organizations to take action on issues they care about.

They also expect growth and development opportunities that fulfill, challenge, and motivate them. When employees feel valued, they’re up to 27% more engaged and 23% more likely to stay longer than 3 years.

82% of employees say it’s important for their organization to see them as a people. Employees who feel their organizations do are 17% less likely to be at risk of burnout and are 20% more likely to have higher employee well-being scores.

Meaningful Work

Employees find meaningful work fulfilling and highly motivating. Research by McKinsey reveals that when employees see their work as meaningful, they are:

• 33% more productive
• 75% more committed to their organization
• 49% less likely to leave

3. The Rise of Employee Experience Management

Employee Experience Management involves enhancing and optimizing employees’ overall experience throughout their entire journey within a company. It includes various aspects of the employee’s interaction with an organization such as:

• Recruitment
• Onboarding
• Daily work
• Professional development
• Departure from the company

58% of HR departments now reach out for employee feedback at least four times a year. This is a crucial step towards more data-driven HR to guide employee experience management. By listening to employees, HR departments design more effective wellness, benefits, and recognition programs.

81% of respondents in a 2022 Qualtrics report stated a strong connection between positive employee experience and good customer experience.

However, there is still a gap between identifying the elements of employee experience that have the strongest impact on customer experience. Only 31% of HR leaders in the same report say their organizations are effective at this.

33% of HR and business leaders believe that having and communicating a clear vision and strategy for employee experience remains a key challenge. They cite the following key barriers:

• Poor integration across systems
• Poor data quality
• Data privacy across multiple systems

Emphasis on Mental Health

80% of HR leaders report that employee mental health and well-being are now top priorities. In fact, 90% of organizations now offer some form of physical and mental health wellness programs to employees.

In the push for better employee experience, 70% of companies have introduced new well-being benefits or increased the amount of existing well-being benefits.

A 2022 McKinsey Health Institute (MHI) study exposed how the pandemic has pushed burnout rates to record highs, affecting one in four workers.

To help employees maintain their emotional resilience and performance, HBR notes that leading companies will provide proactive rest as opposed to offering rest as a recovery measure. This will include efforts such as:

• PTO before high-demand working periods
• Employee assistance programs
• No-meeting Fridays
• Allotted wellness time, and more

4. The Widening Talent Gap

As of 2023, the nearly 10% gap between talent attraction and hiring persists. It remains a top-3 focus area in a majority of countries — with the gap being most critical in the US, where over 75% of HR leaders cite it as a major hurdle.

Businesses see talent as more strategically limiting to their performance than the availability of capital. In the 2023 WEF report, skills gaps in the local labor market were seen as a greater barrier to transformation than an investment capital shortage by companies in virtually every industry.

Quiet Hiring

Businesses have turned to “quiet hiring” as a way to acquire new skills and capabilities without hiring new full-time employees. This involves promoting internal talent mobility and providing specific upskilling opportunities within the workplace.

Hiring Non-Traditional Candidates

56% of candidates report applying for jobs outside their current area of expertise, and this figure is expected to increase in the year ahead. To accelerate talent acquisition, HR professionals will need to:

• Explore non-traditional sourcing methods
• Focus on skills-based hiring
• Leverage alumni networks
• Source gig workers

5. Prioritizing Employee Development

Organizations no longer view employee development as a cost to the business but as a key investment in employees’ ability to adapt to unexpected events.

Employee training and development is one of the top 3 HR focus areas across the globe. 68% of US HR leaders believe employee development is crucial and want to address waning employee perceptions of growth and development opportunities.

Employees that feel their career goals are being met are:

• 13% more likely to have their expectations exceeded at work.
• 13% more likely to have higher engagement.
• 9% more likely to have stay intentions of over 3 years.

Employee Development and the Skills Gap

Investing in learning and on-the-job training is becoming one of the most common workforce strategies to deliver their organizations’ business goals. In fact, 80% of HR leaders expect to implement this strategy in the next five years.

7. Prioritizing DEI

Organizational DEI (diversity, equity, and inclusion) can be a source of competitive advantage. Companies with more ethnically diverse executive teams are 36% more profitable than those without diversity.

In the same McKinsey report:

• 43% said their organizations have focused on creating more transparency in promotions and pay processes.
• 43% said their organizations have taken measures to tackle bias.
• 39% of respondents had turned down a job opportunity because of a non-inclusive workplace.

DEI Business Outcomes

According to a Degreed report, organizations that foster DEI are 81% more likely to have higher customer satisfaction and are twice as likely to meet their business goals. Additionally, employees are 45% more likely to stay and twice as likely to give their employer a positive net promoter score.

Employee Resource Groups

As DEI helps companies win talent and unlock the full potential of a diverse workforce, more human resources professionals are updating their HR processes in response.

They’re also reexamining employee resource groups (ERGs) or internal communities of workers with shared identities and interests, to gauge whether these groups still provide what employees want.

DEI Pushback

An increasing number of employees want employers to have ethics and values and over 81% of employees believe employers should have zero tolerance for discrimination. Even as organizations prioritize DEI, there is growing pushback against this HR trend.

42% of employees now believe their organization’s DEI efforts are divisive. And 40% feel alienated by or even resent their organization’s DEI efforts.

Employee pushback invalidates programs meant to enable marginalized groups. Left unchecked, it could lead to lower engagement and inclusion, and higher employee turnover.

8. Higher ESG Expectations

According to an Esker survey, sustainability is playing a greater role in where people want to work. In fact, 76% of US employees say sustainability is more important than ever.

58% of respondents plan to consider a company’s commitment to sustainability in their choice of employer in the future, an increase from the 44% who took this into account before accepting their current position. This percentage is higher (71%) for workers under 35 and for women under 35 (82%).

Other key values include:

• Ethical business practices – 67%
• Social responsibility and community involvement – 66%
• Diversity, equity, and inclusion – 64%

HR leaders who don’t prioritize ESG will negatively affect their ability to attract and recruit talent. Some of the key sustainability efforts employees want companies to prioritize beyond 2023 include:

• Energy efficiency – 68%
• Reusing and recycling materials – 65%
• Measuring and reducing overall carbon footprint – 57%
• Educating and training employees on sustainability practices – 55%

9. Reimagining Remote Work

Before the pandemic, most organizations expected employees to spend more than 80% of their time in an office. As of 2023, only about 10% of employees do, while the remaining 90% work remotely and have fully embraced a hybrid work model.

Greater Flexibility

87% of employees welcome the idea of working remotely. This is widespread across demographics, occupations, and geographies. Employees value having control over their day-to-day work schedules, with 52% saying flexible work policies affect their decision to stay at an organization.

Flexibility is the third most popular reason employees have for job hunting. Over 80% of employees who have engaged in hybrid work over the past two years want to retain it and will switch employers to do so.

Equitable Hybrid Work

As we transition into a more permanent era of hybrid work for office-based staff, more companies are shifting their focus to equitable flexibility for frontline workers.

According to a 2022 Gartner survey of 405 frontline worker managers, 58% of organizations that employ frontline workers have invested in improving employee experiences in the past year; 33% of those who haven’t, intend to do so in the next 12 months.

Frontline workers are looking for work flexibility, greater control over their work schedules, as well as paid leave.

RTO Mandates

As of September 2023, an additional 1 million US workers were subjected to new return to office (RTO) demands. These mandates remain a contentious issue, with many business and HR leaders struggling to justify or persuade employees to come back to the office.

Build Remote conducted a study of Fortune 100 return-to-office policies and found that:

• 77% operate on a hybrid work schedule.
• 30% have reduced their office space footprint since 2020.
• 13% don’t require any office visits per week.
• 21% require three office visits per week – this is the most common policy.
• 27% or nearly four times as many Fortune 100 companies require 1-3 visits to the office per week than companies that require full-time, in-office work (7%).

Only five Fortune 100 companies, including Intel and Cisco, have declared they will not make an official return to office date and will not require office attendance.

10. Navigating a Multigenerational Workforce

Today, organizations find their human capital split between five generations. Millennials, born between 1981 and 2000, make up 40% of the workforce. By 2025, Millennials will make up 75% of the global workforce. Meanwhile:

• Baby Boomers (1946-1964) account for 15% of the workforce.
• Gen X (1965-1980) accounts for 33% of the workforce.
• Gen Z (2001-2020) accounts for 10% of the workforce.

89% of HR professionals believe a multigenerational workforce directly contributes to better business performance. Innovation, success, and the future of work all depend on how well HR leaders can foster a cohesive work environment, bridge generational gaps, and leverage the unique strengths of each cohort.

When it comes to talent acquisition and workforce planning, HR professionals must keep the following in mind:

• Gen Z employees will make up 30% of the workforce by 2030.
• Due to the pandemic, more than half of Gen Z employees feel that their education has not prepared them to enter the workforce.
• Additionally, 84% of Gen Z value on-the-job training.

As a result, companies will need to invest heavily in training, onboarding, and education initiatives to help attract and retain Gen Z.

11. Navigating a Complex Regulatory Landscape

The changing regulatory landscape presents new challenges for HR management. To avoid adverse business outcomes, organizations must adapt their HR practices and figure out how best to ensure compliance while mitigating risks, and fostering a culture of agility.

Key regulatory developments HR professionals should look out for in 2023 and beyond include:

• The Federal Speak Out Act, effective 7 December, 2022, bans certain non-disclosure and non-disparagement provisions regarding sexual harassment and assault claims.
• The Pregnant Workers Fairness Act, effective June 27, 2023, ensures reasonable accommodations for pregnant workers.
• On October 13, 2022, the US Department of Labor announced a proposed Independent Contract Rule that would impact the standard used to determine whether a worker is an employee or independent contractor.
• On January 5, 2023, the Federal Trade Commission announced a proposed rule that would ban all non-competition agreements in employment contracts. The proposed rule applies to both employees and independent contractors in all industries. Some states, such as California, have already banned or limited the use of such agreements.
• Several states have recently enacted or are considering enacting salary and pay transparency laws. Since January 1, 2023, California employers have had to disclose pay scales for positions published in job postings. New York State and Rhode Island have also joined the list of jurisdictions enacting pay transparency laws.

Forced Arbitration and NDAs

Around 60 million workers, constituting more than half of the non-unionized private-sector workforce, are subject to mandatory arbitration agreements. These policies require workers to forego the right to initiate class claims and forbid the disclosure of complaints.

In recent years, mandatory arbitration clauses in employment contracts have gained public disapproval. This is because of their continued use in keeping sexual misconduct workplace disputes confidential.

• In March 2022, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act was signed into effect. This bill bans forced arbitration for cases of sexual misconduct.
• In addition, employers in California, Hawaii, Maine, New Jersey, and Washington, are no longer permitted to use NDAs that restrict employees from speaking out about discrimination or harassment.

W-2 vs 1099 Workers

As labor and talent challenges persist, independent contractors and the gig economy as a whole have emerged as an essential part of the workforce. Between 2016 and 2021 alone, the gig economy saw an increase of 31% percent. This number is only expected to grow, with the number of contract employees in the US expected to surge to over 90 million by 2028.

Across all industries, between 10% and 30% of employees are misclassified as 1099 contractors every year. With under-reported tax liabilities representing 80% of the gross tax gap in the US, employee misclassification remains a critical issue for HR teams to address.

AI Regulation

On 1 January 2023, a new AI law limiting employers’ use of AI recruiting tools came into effect in New York City. This law requires employers to undergo annual bias audits and publicly disclose their hiring metrics.

As more organizations leverage AI in recruiting, the ethical implications of these practices implore business and HR leaders to tread with caution. Organizations that use AI and machine learning in their hiring processes are likely to face continued pressure to keep up and comply with new regulations including:

• Being more transparent about how they use AI.
• Addressing bias.
• Publicizing their audit data.
• Giving employees and candidates the choice to opt out of AI-led processes.

12. Growing Support for Unions and Strikes

The union membership rate was 10.1% in 2022, down from 10.3 percent in 2021, according to the US Bureau of Labor Statistics. In addition:

• The number of workers belonging to unions increased by 273,000 or 1.9% to hit 14.3 million in 2022.
• The union membership rate of public-sector workers (33%) is more than five times higher than the rate of private-sector workers (6%).
• The 2022 unionization rate of 10.1% marks the lowest since 1983 when the union membership rate stood at 20.1% with around 17.7 million union workers.

67% of Americans approve of labor unions and around 60% say the large reduction in unionization over the past few decades has been bad for the country (58%) and for working people (61%).

A recent report by Gallup shows that labor unions are experiencing high public approval rates; people strongly believe in the benefits they offer to workers, businesses, and the economy.

• 72% of Americans supported the 2023 Hollywood writer and actor strikes, siding with workers as they seek higher pay and protection from losing work to AI.
• 75% of Americans sided with United Auto Workers in their negotiations with US auto companies in 2023, as the union demanded higher pay, benefits, and a shorter work week for its members.

Strike Action

According to the Cornell-ILR Labor Action Tracker 2022 Report, strikes increased by 52% in 2022 over the previous year. The top 3 reasons workers engaged in strike action were pay, health and safety, and staffing. According to the same report:

• There were 424 work stoppages (417 strikes and seven lockouts) in 2022.
• The total number of workers involved in work stoppages increased by 60% between 2021 and 2022.

Non-union workers organized a high proportion of strikes (32%) in 2022, but these strikes were considerably smaller than work stoppages by unionized workers. Most work stoppages in 2022 were relatively short, with 46% lasting one day or less and two-thirds lasting fewer than five.

The majority of all workers involved in work stoppages came from the educational services industry (60%), followed by the food services industry. The majority (91%) of work stoppages in the food services industry were part of the Starbucks Workers United campaign and the Fight for $15 campaign.

13. The Rise of HR Technology

According to the WEF, technology adoption will be an important driver of business transformation for over 85% of organizations over the next five years. Most of these companies plan to use technology to power smarter workforce solutions.

HR tools

HR professionals rely on a variety of tools to streamline their work, including:

• Applicant tracking systems (ATS): Used to manage job applications and recruitment processes.
• Human resource management systems (HRMS): Comprehensive software for payroll, benefits, and employee records.
• Learning management systems (LMS): Used for employee training and development.
• Performance management software: Used for employee evaluations and feedback.
• Time-tracking software: Used to monitor work hours, leave, and vacations.
• People analytics tools: Used for data-driven decision-making about the workforce.
• Onboarding solutions: Used to ease the integration of new employees.

AI in Human Resource Management

81% of HR leaders have explored or implemented artificial intelligence (AI) solutions to improve process efficiency within their organizations. HR teams are leveraging AI to:

• Automate routine administrative tasks.
• Match job candidates’ behavioral attributes to open positions, helping push the shift to skills-based hiring.
• Tailor job descriptions, advertise them to the right candidates, screen candidates, and account for human biases.
• Power AI-based learning management systems and employee experience platforms.
• Predict the likelihood of employee exits based on various data sources.
• Foster collaborative data-driven HR and, in turn, boost productivity, employee engagement, and performance.
• Create personalized people analytics-informed experiences for employees.
• Improve communication across their organizations or help leaders assess the overall quality of team dynamics.

AI in People Analytics

Amid talent shortages, burnout, and growing HR challenges, HR leaders and teams need integrated data to make informed decisions. That’s where people analytics comes in. It provides a data-driven approach to understanding and solving workforce issues.

Organizations that leverage people analytics see the following results:

• An 80% increase in recruiting efficiency
• A 25% rise in business productivity
• A 50% decrease in employee turnover rates

In June 2023, Visier, the globally recognized leader in people analytics and workforce solutions, unveiled “Vee”, a generative AI-based digital assistant. Vee adds a simple conversational interface to Visier’s people analytics solution, giving HR leaders access to vital workforce insights.

Automation in HR

80% of organizations consider the automation of processes as a key workforce strategy to help meet their goals in the next five years.

As per a 2022 report by the Society for Human Resource Management (SHRM), 25% of organizations reported using automation or AI to support HR-related activities in 2022. The report also found that:

• 85% of employers using automation or AI said it saves time or increases efficiency.
• 66% of HR professionals said filling open positions was somewhat (53%) or much better (16%) due to the use of automation or AI.

2023 SHRM research further revealed that workplace automation and artificial intelligence will become even more prevalent in workplaces throughout the US. Furthermore:

• 35% of US workers believe their jobs will rely more on workplace automation in the next few years.
• 23% are concerned that they’ll be replaced by workplace automation in as little as five years.
• 50% believe that the automation of specific job tasks or duties could give them more time to focus on other areas of their work.

The Future of HR

Employee Experience Management Will Take Center Stage

Following the unprecedented shift in employee expectations, employee experience management will take center stage. 90% of HR leaders agree that connecting both experience and operational data to improve the four core experiences of business, will be a crucial capability in the future.

Organizations will move past simply compiling employee feedback to listening and addressing concerns at every employee touchpoint. HR leaders believe listening programs must evolve for organizations to remain competitive. In fact, 82% want to increase the frequency of employee listening over the next 3 years.

From Employee Engagement to Holistic Well-Being

Employees can be engaged and still experience burnout, report lower well-being, and leave the organization.

More organizations are starting to understand that engagement alone is not an indicator of employee experience. What was considered the flagship measure of employee experience will undergo a massive transformation and give way to a more holistic view of employee well-being.

AI Will Revitalize the HR Industry

By creating novel ways for HR professionals to reach, acquire, and engage talent, AI will drive major transformation in the HR industry.

• 25% of organizations plan to start using or increase their use of automation or AI in recruitment and hiring in the next five years.
• 20% of organizations plan to start using or increase their use of AI tools for performance management over the next five years.
• 85% of HR managers plan to invest in some type of AI learning and development for employees. This will be driven primarily by the anticipated skills gap caused by widespread AI adoption.

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