Every year, HR departments must revise and update their hiring practices, policies, and structure just to keep up.
Sometimes it’s due to macro trends like the pandemic while other times it’s due to national policies or simply organizational restructuring.
At any rate, I combed through dozens of industries to figure out the following HR trends for 2024.
Let’s dive right in.
Human Resources Trends to Watch in 2024
HR professionals are doing their best to adjust to the changing hiring practices, manage AI-based processes, and keep employees happy.
HR executives believe that maintaining employee morale and engagement is the biggest priority for them this year.
1. HR budgets will either increase or at least remain the same.
As companies struggle to retain top talent and keep employees happy, organizations are doubling down on their HR budgets.
SHRM’s State of the Workplace report finds that the biggest increase in budget will be for talent acquisition.
The report also found that more than half of the organizations in the study (53%) plan on increasing their HR budgets.
42% plan on keeping their budgets the same as last year while only 5% will decrease their budgets.
Of the 53% planning on increasing their budgets, 17% plan to increase them by more than 10%.
In my books, that’s a sizable increment in any department’s budget. Anyone with hiring experience knows that it’s a long, expensive, and often risky process.
However, once you do it right and hire the right people, retaining them is a top priority.
Great hires are seldom found. Not because there aren’t talented people out there but because finding the right fit on both sides is the tricky part.
2. Freelance hiring is slowly overtaking traditional hiring.
Hiring full-time employees is a long expensive process, but hiring independent contractors is proving to be a more efficient method.
This is more true for jobs that can work on a project basis, such as marketing, payroll, accounting, product management, and project management.
That is why many companies have started hiring project-based freelancers for specific tasks.
A 2018 report by LinkedIn found that 70% of small businesses in the US have hired a freelancer in the past.
Expectations show that the number will only increase moving forward.
Okay, sure, what about larger companies? Well, in 2019, Google had a workforce of 220,000 workers.
Out of them, 54% were freelancers and contractors and only 46% were permanent employees.
Since then, we’ve seen a global pandemic that boosted freelance hiring and the number of freelancers around the globe.
So, we can safely say freelance hiring is taking priority for a lot of businesses, small and large alike.
3. The priority of HR will be to meet the skill gap through upskilling.
There’s almost a 10% experience gap in talent hiring and onboarding.
That means hiring new people with the right skills may mean they don’t have the appropriate experience.
If they have the right experience, they might not have all the skills to excel in that role.
That is why HR professionals are looking to upskill current employees who have the necessary experience.
However, upskilling also requires time, money, and effort and it’s important to invest in the right employees.
For that reason, HR professionals look at the intent to stay by tenure to ensure upskilling an employee is beneficial in the long term.
It’s not an exact science, but the numbers don’t lie.
4. Employee experience management will be about listening, not surveying.
A few years ago, employee engagement was the primary measure of a good employee experience.
However, a survey of employees across the fold found that they wanted to share their feedback directly, at least four to five times a year.
Now, 57% of HR leaders reported having an employee feedback program running every quarter.
82% of HR leaders said it’s important to increase the frequency of employee listening in the next three years.
A recent evolution of the traditional EX programs is that companies are now focusing on holistic EX programs.
Long story short, these programs are based on increased employee listening tactics to improve overall employee experiences.
5. Most HR leaders plan to invest in career pathing, AI, and employee assistance programs.
A report found that 24% of HR leaders want to invest in career pathing for 2024.
20% plan on investing in Employee Assistance Programs (EAPs) and AI for HR.
Other important investments include behavioral assessment tools, employee engagement platforms, cloud-based HR tools, and leadership programs.
Only 14% of HR professionals want to invest in background checks and applicant tracking systems.
This tells us that HR professionals want to focus on more personal hiring moving forward.
6. HR professionals believe that recruiting will be most impacted by generative AI moving forward.
A survey of HR professionals found that 43% believe that recruiting will be most impacted by generative AI.
That’s followed by 38% who believe onboarding will be most impacted and 33% who think learning and development will see the most growth.
Keep in mind that this is only the effect of generative AI on HR functions.
As we see AI and machine learning algorithms become common, HR professionals are working toward the integration of generative AI in the workplace.
According to Gartner research, 76% of HR leaders believe they will be lagging behind other organizations if they don’t implement generative AI solutions in the next one or two years.
7. SMBs are looking to modernize their HR operations.
I’ll give you some perspective on where SMBs stand today – 73% of SMB leaders said that they use spreadsheets and email for HR operations.
On top of that, only 29% use talent management software, 50% use hiring software, and 60% use benefits management software.
Therefore, a good majority of SMBs still rely on the manual management of a lot of HR operations.
This obviously takes a lot of time and effort, that can be freed up using automation and AI tools.
8. HR leaders are looking to improve pay transparency.
As of now, approximately 25% of employees know the salary range for their job level.
More than half of all companies currently keep pay range information within the HR and finance departments.
However, many HR companies are now adopting a pay transparency approach, due to employee hiring and retaining issues.
Pay transparency is an excellent tool to hire and retain employees because it gives them a clear picture of their worth.
And, it gives companies a good idea of what it takes to retain talent as opposed to hiring new talent.
9. HR professionals are adopting the Green HR agenda.
HR plays an integral role in ensuring companies follow green policies.
For example, many HR professionals in Costa Rica track green skills and leadership to ensure companies do their part in reforestation and the restoration of damaged biodiversity.
HR also plays a role in the wider ESG (Environmental, Social, and Governance) agenda.
They can ensure that companies follow sustainable practices while also promoting environment-friendly behavior in employees.
In fact, green HRM also has effects beyond sustainability. For example, the impacts of environmental regulations lead to increased demand for technical skilled workers.
All in all, HR has a pivotal role in ensuring sustainability. They engage the employees, align strategies with the Green HR agenda, and find ways to improve the use of natural resources.
10. HR and tech leaders will have a close partnership in any future-ready organization.
Technology is an enabler, not the sole solution to any HR workplace issues.
That is why HR and tech leaders need to work together to create an HR tech stack that aids HR processes instead of trying to replace HR professionals.
Gartner’s 2023 HR technology report found that skills management, learning experience platforms, and internal talent marketplaces are the three most important HR technologies in 2024.
It also found that HR leaders plan on focusing HR technology on reporting & analytics, recruiting, and HR information systems.
This is why it’s important to be problem-led, not technology-led.
On top of that, the interconnectedness of organizational systems is also crucial to making the best of technology.
Biggest Issues in HR Today
While every HR department follows some sort of Kaizen mentality, they still face many challenges.
From what I’ve analyzed, it’s often SMBs that are more susceptible to HR-related issues.
11. SMBs will generally have a harder time with HR and compliance matters.
A report found that 55% of SMB leaders are struggling to keep their employee handbooks up to date.
Meanwhile, 29% struggle with fulfilling benefits and payroll mandates, and 28% have trouble complying with workplace safety laws.
Only 6% of SMB leaders said they are fully prepared for HR and compliance initiative success.
I would say, overall confidence in HR within the SMB community is pretty low today.
From a business outlook, 35% of SMB leaders are very optimistic about the next year while 41% are somewhat optimistic.
16% are neutral and 8% are somewhat pessimistic.
So, while SMB leaders may be struggling with HR and compliance issues, 76% are still optimistic about their businesses in the coming year.
12. Many HR teams feel understaffed and uncertain about the future as a result.
Economic uncertainty often leads to additional complexity in roles across an organization.
That’s why over 50% of HR professionals feel that their roles have become more complex recently.
An SHRM report found that 61% of HR professionals believe that they are understaffed.
62% of HR executives agree with them. This is also why a lot of organizations are now focusing on upskilling more than hiring new talent.
A combination of upskilling and the use of automation & AI is one solution to solve the understaffing challenge.
13. HR teams are having a hard time defining what hybrid work should look like.
Many HR teams have understood that remote and hybrid work has become a crucial part of today’s organizations.
However, they still have a hard time designing and maintaining the policies surrounding it.
Think of it this way, if you allow a new employee to work remotely because they live in a different state, should you also allow the older tenure employees to work remotely, even though they’re in the same city?
For a good and fair employee experience, if you allow one employee to work remotely, the option should extend to all employees; provided their work is remote-friendly.
Even if it isn’t, what measures does HR take to compensate those employees as they still spend the extra time and money on commuting, lunches, etc.
These questions and challenges still affect HR teams and will do so for the foreseeable future.
I’ve seen companies go fully remote to solve such issues but many organizations don’t have that luxury, especially the ones that require the physical presence of workers.
14. HR professionals believe employees feel disconnected and are less clear about expectations due to reduced facetime.
72% of employees may feel disconnected due to reduced facetime. On the other end, 50% of employees are less clear about expectations when working remotely.
Furthermore, 62% of HR professionals say that it’s hard to track morale in remote teams and 60% believe that career conversations happen less often in this setting.
This makes it hard to offer career pathing opportunities.
45% of employees think that it’s hard to track productivity while 42% feel overlooked for raises and promotions.
However, I believe such issues were also present prior to hybrid work becoming common.
These problems have just taken on a new face. The interesting thing is that startups are trying to solve all these problems.
Time tracking, project management, and collaboration tools and software are propping up to solve these exact issues.
That being said, at the end of the day it comes down to approved budgets.
15. HR tech solutions aren’t keeping up with the pace of change.
Remote and hybrid work situations are leading companies to invest in more HR tech.
76% of HR teams plan to invest more in HR tech this year and the next. This is despite the current economic landscape.
Now more than ever, organizations need better tools to recruit, collaborate, and manage a distributed workforce.
Another perspective on this is that 60% of HR professionals have concerns about their HR tech stack’s data security.
Furthermore, most HR professionals agree that an integrated HR platform will be most efficient.
Yet, 50% of them aren’t able to make it a reality.
Expert Insights on HR Trends
HR leaders understand that the current state of HR is a tad bit tumultuous. Some organizations are downsizing while others are upsizing.
One common thing though, is that almost every organization is either planning to or currently utilizing automation and AI.
At any rate, a huge shift in HR is that organizations prefer development over hiring the best people.
While companies always want to hire the best talent, teams are now focusing on organizational development to improve employee experience.Lauren Isabella Valenzi, Chief of Staff at Pento
Organizations need to be anti-fragile – people need to be exceedingly flexible and less calcified because technology, demands, and markets tend to move faster than we can.Nassim Nicholas Taleb, Lebanese-American essayist and mathematical statistician
This is why organizations need to be agile. HR needs to adopt an ecosystem mindset where tasks, challenges, and activities are individually organized.
Furthermore, HR professionals need to rely on a mix of data and employee feedback.
HR should get used to work based on data, deriving their decisions and programs from data combined with qualitative backups and employee feedback.Veronika Birkheim, Director of People Experience at Aurebus Consulting
Employee feedback analysis through surveys, reviews, and other sources is a great way to gather crucial HR data.Rachel Collar, an HR consultant
Based on a recent story, companies are starting to deploy and optimize employee recognition programs for hybrid workforces.
I recommend following similar HR newsletters that share the latest updates of the HR world.
They often share information on the latest HR tools and software.
It’s a great way to not only stay updated on changing HR trends, but also a great place to find new tools to adjust your HR tech stack.
HR needs to evolve at a steady pace to keep up with changing work situations, business challenges, and employee expectations.
There is an overwhelming need for more investment in HR tech, particularly automation and AI-based tools.
A huge reason for this is the abundance of remote and hybrid work.
That being said, hybrid working situations bring their own unique challenges that HR professionals are working to resolve.
Overall, we can expect increased transparency across the fold and a heavy focus on the employee experience throughout organizations.