HR trends 2024

Key insights

• 2024 will bring new topics on the agenda but will also continue with some evergreens.
• Tech and automation are used to combat “HR burnout”, freeing recruiters to use their time on human-centric activities.
• As employers widen their search for talent, they look past national borders and degree requirements.
• The recruitment process is transforming with candidates increasingly using ChatGPT.
• Employers try to retain talent: employee experience stays relevant, especially for older employees as the workforce matures, and “belonging” becomes a fourth pillar of DEI.
• Tight labor markets and demographic shifts lead to increased staff shortages as a catalyst for 2024 trends.

2023 has been a rollercoaster, marked by both challenges and resilience in the job market. Despite uncertainties and signs of a cooling economy, employers have demonstrated a sustained commitment to measured hiring. Job seekers continue to fare well, and the ongoing skills shortage bolsters their negotiating power. In 2024, employers will have to streamline recruiting processes further and enhance labor conditions to attract and retain talent.

Recruiters, however, find themselves in a challenging position, tasked with filling vacancies under tight budgets, leading to what is commonly termed as "HR Burnout." Looking ahead to the coming year, we anticipate a substantial role for AI in boosting recruitment efficiency and freeing up time for more meaningful tasks: While 2023 saw a predominant focus on efficiency, 2024 is poised to become the year of human connections. This evolution is not solely driven by companies; candidates are also actively contributing to this process.

Tech and automation in recruitment to combat “HR burnout”

The scarcity of skilled professionals has intensified the demands on recruiters to fill job openings, leading to what’s now referred to as "HR burnout." With many businesses now operating under economic challenges while grappling with the persistence of open positions, the strain on recruiters is anticipated to escalate further.

To alleviate this pressure, we expect increased automation of recruitment processes. A survey by The Stepstone Group on tech and automation in recruitment revealed increasing automation of screening application documents, scheduling interviews, and initial communication with potential candidates. 63% of recruiters who have adopted automation report that their work has been simplified (The Stepstone Group, The State of Recruitment and Automation, 2023). Despite these advancements, a substantial number of businesses are still in the early stages of adopting automation technologies. Looking ahead to 2024, we anticipate a pivotal year for automation, with a focus on streamlining initial contact with applicants and automating the creation of job advertisements among small and medium-sized enterprises (SMEs). This will enhance overall efficiency, allowing recruiters to allocate more time to strategic tasks and human connections.

International recruitment: expanding talent horizons

The upswing in international recruitment is definitely fueled by the recognition of the value brought by diverse perspectives and specialized expertise. However, particularly in Western economies, there is a growing reliance on skilled immigration to counteract the diminishing working-age population. Italy is projected to witness a nearly 30 percent reduction in its working-age population over the next 25 years, while Poland anticipates a decline of nearly a third by 2060. Despite migration to OECD countries reaching unprecedented levels, a concentration of more than half of immigrants is observed in the top five destination countries – the US, Germany, the UK, Spain, and Canada. And as the Western working population is shrinking, a heightened competition to attract talent is on the horizon. Recruiters will need to proactively anticipate international talent needs. Moreover, building connections with international talent pools and gaining an understanding of global market trends will be instrumental in staying ahead in the race for top-tier talent.

Skills-based hiring and lifelong learning still on the rise

This year, numerous major companies have opted to eliminate degree requirements, marking a significant departure from the conventional hiring paradigm. This strategic move is driven by the desire to broaden their talent pools, placing greater emphasis on skills acquired through prior experience or alternative learning methods. Dropping unnecessary degree requirements is anticipated to gain widespread acceptance, as it is poised to not only enhance inclusivity but also foster innovation and adaptability within the workforce. In Germany, ministries have actively advocated for lateral entry to address crucial staffing gaps, particularly in fields such as education (including school and kindergarten teachers) and technology (such as software developers). Nevertheless, this transition demands HR departments to completely restructure their hiring practices, define needed skills for each job profile, and invest in comprehensive training programs.

However, ultimately, skills-based hiring allows companies to address two challenges simultaneously: Perfectly qualified candidates are rare, and it is simply not cost-efficient to wait for them. Investing in training and development allows companies to fill prolonged job vacancies and at the same time enhance employer attractiveness, as candidates are increasingly inclined towards opportunities that promise ongoing career development and employability.

Candidates are boosting a transformative shift in the recruitment process

The evolution of the recruitment process is not solely influenced by the increased integration of automation on the recruiters’ side; candidates, too, are pushing forward the transformative shift. By using tools like ChatGPT, candidates can now easily craft cover letters, enhance their initial correspondence with companies, and adeptly prepare for job interviews. For that reason, certain elements of the traditional recruitment process, such as the emphasis on cover letters, are diminishing in importance. Additionally, components like take-home assignments may require adjustment, recognizing that candidates can readily seek assistance from AI resources. On that account, recruiters may find it more challenging to form comprehensive impressions of candidates, given the influence of AI in communication. As a result, it is more important than ever to speed up the time to a personal meeting. This shift, again, underscores the irreplaceable value of human interaction in the assessment of candidates during the recruitment journey.

The continued relevance of employee experience

Recently, “Employee Experience” has garnered significant attention in HR blogs, portraying the comprehensive journey of an employee within an organization – from recruitment and onboarding to professional development and eventual offboarding. The pursuit of creating an environment where people actively choose to work is driven by the recognition that a healthy workplace has a substantial impact, contributing to overall well-being. While this trend projection has long held a prominent position, there are now indications that some companies may consider scaling back investments in employee experience due to budget constraints. However, it’s crucial to recognize that maintaining focus on employee experience is integral to achieving overall business success. According to a Harvard Business Review (HBR) survey, the majority of leaders emphasize that exceptional customer experience is inseparable from an outstanding employee experience.

DEI initiatives now focusing on belonging

While many are familiar with the acronym DEI, representing Diversity, Equity, and Inclusion, companies are now adding a fourth pillar – "belonging" to DEI initiatives. Belonging is conceptualized as the result of a culture where every employee perceives the opportunity to flourish in their careers, feels acknowledged and appreciated for their distinctive contributions, and believes they can make a positive impact on the business. Some articulate it as an employee's perception that their individuality is not only acknowledged but also esteemed by their organization and colleagues. HR can foster belonging by acknowledging and appreciating the diversity of holidays observed by employees, offering inclusive training and mentorship programs, and investing in innovative technologies that bridge the gap between remote teams.

Managing an age-diverse workforce

Aligned with the trend of higher life expectancy, the engagement of older employees in the labor force has seen a notable increase. In the face of demographic shifts, the workforce is poised to become more age-diverse, emphasizing the need for collaboration among individuals in various life stages. In Germany and the US, employment of 55- to under-65-year-olds has risen significantly in recent years and is projected to rise in the upcoming years. In Germany, the workforce landscape witnessed a notable shift between 2012 and 2022, with the percentage of 65- to 69-year-olds engaged in employment rising from 11% to 19%. Meanwhile, in the United States, among all age groups, the participation rate is anticipated to see growth only among individuals aged over 55 until 2023.

Recognizing this, HR professionals are placing an increased emphasis on fostering an age-friendly work environment. Micro-trends in this domain include a focus on cultivating lifelong learning opportunities, offering flexible retirement options, and providing comprehensive health, welfare, and retirement benefits. Moreover, there is a growing acknowledgment of the importance of enhancing cohesion within multigenerational teams. The current discourse surrounding the entrance of a new generation into the workforce has veered away from fostering a sense of unity and collaborative teamwork, instead placing undue emphasis on relatively minor generational differences. In light of this, managers are encouraged to articulate a shared objective in teams and emphasize diverse expertise and experience.

Conclusion

While 2023 was marked as the year of efficiency driven by automation, the trajectory is now shifting towards harnessing the capabilities of artificial intelligence (AI) and automation to prioritize a more human-centric approach. In the face of a shortage of skills, continual demographic shifts, and a progressively competitive labor market, emerging trends are notably shaped by the imperative to address staffing gaps. Novel strategies, such as a heightened emphasis on skills over degrees, the promotion of multigenerational workplaces, and a surge in international recruitment, signal a deliberate effort to tap into broader and more diverse talent pools. In the discourse surrounding upcoming HR trends, there is a heightened focus on retaining and engaging talent. This involves a comprehensive consideration of the employee experience throughout the entire candidate life cycle. Additionally, there is a strong emphasis on cultivating a culture of belonging within the workplace.