With 2024 just around the corner, business leaders are gearing up for yet another year of profound change. Here are five key workforce trends that could shape the new year, and advice for HR on how to prepare.
As the countdown to the new year commences, business and HR leaders are bracing themselves for new waves of transformation.
Recent research from Randstad, a recruitment and HR services company, has shed light on five trends that could shape the workforce in 2024.
HRM spoke with David Owens, Managing Director of HR Partners by Randstad, to unpack the trends that leaders expect to influence the employment landscape in the upcoming year – from the impact of AI technology and hybrid working models to the growing scarcity of talent.
The research, which surveyed 200 Australian business leaders, reveals that, on the whole, business leaders feel optimistic about Australia’s economic outlook in 2024, with nearly 79 per cent of survey participants anticipating stability or improvement.
It’s crucial to recognise, however, that while some may feel optimistic about the economic outlook of 2024, there are still plenty of potential challenges for HR and leaders to keep an eye on in 2024 – as well as opportunities for growth.
1. Scarcity of the right talent with the right skills
One trend that will resonate with most HR professionals is the continued challenge of acquiring talent. While the availability of talent is predicted to stabilise, the availability of the right talent with the right skills remains a pressing issue on the minds of almost half (47 per cent) of business leaders.
“Seventy-one per cent of people are expecting to recruit, alongside a general expectation that the availability of talent is going to remain pretty tight,” says Owen.
Addressing this talent shortage will be a key focus for organisations aiming to thrive in the evolving business environment. However, Owens is optimistic.
“Generally, I think if you look hard enough or you dig deep enough or you’re using the right sort of strategies to acquire talent, you’ll be able to find talent.”
Next year, the undercurrent of talent scarcity is likely to remain a prominent factor influencing the decisions and strategies of HR and business leaders. The challenge lies not only in envisioning growth, but also in navigating the landscape of the talent market that shows signs of persistent tightness.
Thirty-three per cent of respondents highlight the simultaneous increase in demands for talent and decrease in talent availability, underscoring the importance of employee retention in 2024. Business leaders seem to understand this, with 37 per cent of respondents focused on providing internal growth opportunities and greater employee satisfaction levels.
Owens notes that organisations may also face challenges in 2024 when it comes to acquiring the right talent. Simply paying talent more as an attraction strategy is unlikely to yield strong results, he says.
Instead, he suggests organisations adopt new strategies for acquiring talent and be open to using non-traditional forms of employment, such as interim and contingent labour.
“There’s a two thousand percent uptick in organisations seeking talent with AI skills since 2023 alone.” – David Owens, Managing Director of HR Partners by Randstad
However, companies can also gain the critical talent they need internally, by ensuring they have adequate succession planning in place, supported by a robust learning and development strategy that prepares internal talent for the future needs of your business.
“[Learning and development programs] are something that everybody’s going to have to consider, from the corner shop to the small business down the road to larger corporations. I think everybody needs to be open-minded.”
Owens also highlights the importance of “being more open to seeking talent from diverse and underrepresented backgrounds – whether that’s Indigenous people, retired workers, employees with disabilities or any other [diverse groups that could add value to your business] – there are a lot of segments that need to be considered in that open and more agile view of the labour market.
“Ultimately I think in this market, you have to be really agile and open-minded as to how you’re going to solve your problems.”
2. High demand for tech skills
It’s no secret that the demand for technology skills is following a pattern of consistent growth. Despite this, Randstad’s study reveals that these skills are the most difficult to acquire – perhaps an indication of the increasing reliance and integration of technology, AI and machine learning in virtually every sector.
A staggering 57 per cent of respondents noted that technology skills are the most critically in-demand for organisations in 2024, with problem-solving (45 per cent), and creative skills (38 per cent) also in high demand.
What does this reveal about the future of work? Undoubtedly, HR and business leaders need to adapt to the impact of digitalisation and automation on the workforce, and seek new ways of meeting multifaceted talent needs.
Owens highlights the importance of adapting alongside technology and the need to continually invest to ensure your business is up to speed.
“It is the one field in which you absolutely cannot afford to be behind.”
Randstad’s own analysis of global job advertisements reveals a 2000 per cent uptick in their search for talent with particular AI skills.
“That’s a huge surge. An interesting counterpoint to this is that, as it stands, only 21 per cent of Australian workers have been promised learning and development opportunities in the next year, despite 42 per cent claiming they are excited about the prospect of using it in the workplace.”
Where does this disparity stem from? According to Owens, we are seeing a “lag factor” which is unsurprising when a trend first spikes. The delay in providing learning opportunities for integrating AI into the workplace is expected, given the sudden surge in interest in the technology.
HR professionals can help their organisations embrace these new technologies by considering low-risk ways to experiment with it. For example, HRM previously wrote about a company that added an AI-powered employee on its org chart.
Learn about some essential ChatGPT prompts for HR in this handy infographic.
3. Impact of AI and technological transformations
Alongside an increasing demand for technology skills, the impact of new, emerging technologies, in particular AI, are set to have a significant influence on various roles.
More than half of respondents believe that AI will impact employment, and 21 per cent predict that it will create brand-new roles.
AI and automation tools don’t only offer greater necessarily guarantee efficiency. Instead, they can also help to create smarter solutions that may be increasingly widespread, says Owens, such as automating time-consuming processes.
Many organisations are already jumping on this trend, with 60 per cent of respondents reskilling employees in AI and technology transformations. This adaptability is key for organisations to remain competitive and for employees to stay abreast with the evolving job market and an increasingly AI-driven world.
As AI technology continues to take centre stage across a number of industries, many find themselves grappling with an unsettling question: “Are you worried that AI will eventually take over and make your role obsolete?” Coming up with a response to this can often prove challenging, and feelings of uncertainty may linger.
On that, Owens offers a compelling line of thought:
“AI won’t necessarily replace jobs, but people who use AI will replace people who don’t. So the people who can work with it are probably going to have a competitive advantage.”
4. Need to optimise hybrid working models
As hybrid working models continue to become the new norm, a large majority of business leaders (59 per cent) are struggling with employee productivity in remote and hybrid environments.
In response to this, organisations are maintaining adaptability in their operational approaches. This is reflected in the 56 per cent of organisations aiming to bring staff back into the office more intentionally in 2024. Or, as Owens puts it, the ‘deliberate’ return to work.
“’Deliberate’ is a really great word to focus on because employers have to think about why they want workers in the office. It has to be deliberate. So we have to make it a learning day. We have to make it a collaboration day. We have to make it a face-to-face day.”
It’s also important to note that not all organisations find remote work challenging, with 44 per cent of business leaders saying they’re not looking to change the status quo as they are happy with current flexible work practices.
“Ultimately I think in this market, you have to be really agile and open-minded as to how you’re going to solve your problems.” – David Owens, Managing Director of HR Partners by Randstad
Owens stresses that hybrid working is not a fleeting trend – it is a permanent fixture. Therefore, the focus should be on effectively navigating and overseeing its implementation rather than trying to push against it.
5. Wage inflation putting pressure on organisational sustainability
With 58 per cent of respondents expecting the cost of talent to increase, HR and business leaders will have their eyes set on managing operational costs into the new year.
Finding the balance between talent costs and talent needs will be vital for organisational sustainability.
In the face of this balancing act, what strategies businesses can take on to manage operational costs effectively while ensuring organisational sustainability?
Well, that is the million-dollar question, according to Owens.
“I think we’re reaching a point where most people realise you can’t just keep paying higher wages, because that’s a zero-sum game.
“From a recruiter’s point of view, we continue to see demand for labour. There were some notable reflections on 2021 and 2022 in relation to people being prepared to pay over the odds to secure a talent, and I think that’s begun to tail off in 2023.”
Instead, what could set your organisation apart in 2024, according to Randstad, could be strategic implementation of technology, building employees’ digital and AI skill set and thinking outside of the box when it comes to how and where you secure the skills that your business needs,
What trends are you expecting to see in 2024? Let us know in the comment section and HRM will consider this for a future article.