The current economic climate remains characterized by instability and unpredictability. In response to the need for direction on how to best prepare organizations for the uncertain future of work over the coming year, McLean & Company, one of the world's leading HR research and advisory firms, has published its annual HR Trends Report for 2024.
In conjunction with the rise of generative artificial intelligence (AI), which is predicted to bring even more change to the workplace, the firm explains in the report that in 2024, HR will be increasingly challenged by the tension between the need to adapt and innovate versus the need to control costs.
The annual report from McLean & Company contains data gathered from the firm's HR Trends Survey 2024 and has been designed to help leaders develop their strategic plans for the coming year. The research has been informed by the responses of nearly 1,400 participants who operate within a diverse array of industries, including educational services, manufacturing, healthcare, finance and insurance, information and culture, and more.
"2024 will be a key year for HR to adapt to both known and unknown changes. Organizations are now faced with the stark reality that we can't plan for everything coming down the pipeline," says Will Howard, director of HR Research & Advisory Services at McLean & Company. "It's also important to note that the trends identified in the new report are not industry or region-specific, in the same way that the changes that impact us every day are no longer industry or region-specific. No matter the organization or location, HR organizations need to prepare themselves and their organizations for the future."
A wide variety of roles, seniority levels, organizational sizes, geographic locations, unionization categories, and work models were also recorded in participants' responses. For example, global feedback was collected from North America (79%), Europe (8%), Africa (5%), and Latin America, Middle East, Asia, and Oceania (all 2%), with a rate of 69% ununionized, 21% partially unionized, and 10% unionized.
The HR Trends Report 2024 from McLean & Company examines key areas of consideration for HR and organizational leaders planning for the future of their workforces and identifies the top HR priorities for organizations in 2024. The top five priorities for organizations identified in the report are as follows:
- Recruiting – This remains the top priority for HR in 2024, with no change from the firm's 2023 data.
- Providing a great employee experience – The employee experience remains in the second spot in 2024, with no change reported from the previous year.
- Controlling labor costs – Moving up one spot from 2023, controlling labor costs is an increased focus for HR in 2024.
- Developing leaders – Bumped out of third place in 2023, developing leaders now holds the fourth spot for HR priorities in 2024.
- Supporting change – Up two places from the seventh spot last year, supporting change joins the top five priorities for HR in 2024.
McLean & Company's reported data-backed trends for the coming year are outlined below:
- HR in 2024: An Era of Change
The first section of the report reviews HR's priorities in 2024, highlighting that the strategic partnership role HR plays in planning and executing strategy has increased from 36% in 2021 to 50% in 2024. This section also seeks to prepare HR and organizational leaders for accelerating changes and innovation, with data showing that organizations that view HR as a strategic partner are 2.7 times more likely to be highly effective at generating and implementing new ideas.
- Rethinking the Approach to Skills
This section examines five key types of skills and competencies to better understand employee proficiency in each and how their development is being prioritized by organizations. Of particular interest is that the emphasis on task and functional skills over all other skills represents a risk for organizations, with the percentage of non-office workers who are highly proficient in core and leadership skills, such as the ability to navigate change, work collaboratively, and lead others, ranking between just 24% and 36%. With only 25% of respondents indicating their HR function is highly effective at building talent, it also explores opportunities for organizations to equip the workforce with more durable skills and competencies to navigate constant waves of change and disruption.
- Delivering on the Employee Experience
The third section evaluates five dimensions that contribute to employees' lived experiences. Employees' expectations have shifted in recent years, and providing a great employee experience has been a top-two organizational priority since 2022. According to the report, organizations that are not effective at designing a positive employee experience face 36% higher rates of voluntary turnover compared to those with HR functions that succeed in this area. The data found that organizations that are highly effective at designing a positive employee experience are 2.5 times more likely to be high performing when it comes to quickly changing to capitalize on new opportunities and 2.4 times more likely to be high performing at workforce productivity, DEI, and shaping a strong organizational culture.
- Flexibility Beyond Remote Work
This section investigates different flexible work offerings beyond remote work and how organizations are making or not making changes to their working arrangements in 2024. The return-to-office (RTO) question is far from settled and cutting through the noise is a challenge for organizations that want to take a data-driven approach to their working arrangements. Survey data indicates that 81% of organizations are not planning on making any significant changes regarding flexibility in location, 88% regarding flexibility in working hours, and 89% regarding flexibility in time off for employees.
What is clear is that many CEOs want a return to the office. However, in recent years, employee expectations about what organizations offer in terms of flexibility have evolved. The demand for flexible work is here to stay. As such, the report analyzes the need for organizations to balance the demands of senior leadership and the expectations of employees, with a reminder that flexibility will not look the same for all types of employees in 2024.
- 2024 Trends Spotlights
The final section of the report spotlights topics that should not be overlooked by HR and organizational leaders planning for the future of work in 2024 and beyond, such as generative AI and DEI. For example, 79% of respondents who are implementing generative AI cited increased productivity and efficiency as the primary reason for doing so and more than half of respondents indicated that their organization takes a public stance on political or sensitive social issues at least in some circumstances. Additionally, organizations that are highly effective in their approach to DEI are 1.9 times more likely to have a highly productive workforce. As evidenced in the report, DEI has slipped from its peak as the fourth HR priority for organizations in 2021 down to the seventh HR priority in 2024, though DEI is so intertwined with the employee experience that organizations may no longer be considering it as a standalone initiative.
Despite a decline in priority, the firm advises that DEI efforts are crucial to organizational success. Of particular concern is that when presented with the statement "My organization is prepared to support the needs and experiences of a multi-demographic workforce," only 66% of respondents agreed regarding gender, 32% for neurodiversity, 57% for ethnicity, 55% for age, and 59% for national origin. The data indicates that significant DEI work is still needed to prepare organizations for the workforce of the future, which will consist of many different demographics.
The 2024 trends report from McLean & Company also underscores that employees are experiencing disruption in all areas of their lives, from the acceleration and uncertainty of technological changes to financial, political, and social pressures, which impacts their day-to-day experiences at work. These pressures continue to highlight that organizations' recognition of and need for HR's strategic leadership has never been stronger. However, capacity continues to be a major obstacle, with the level of stress HR professionals experience increasing dramatically year over year, up from 34% in 2023 to 47% in 2024. As planning progresses for the year ahead, the consideration of HR's role and capacity to support both the organization and employees will be crucial.
"As HR professionals are asked to do more with less, HR and organizational leaders need to focus on building broader organizational and employee capabilities to thrive through change, instead of trying to plan for every change on the horizon," explains Howard.
To access the full report, visit HR Trends Report 2024.