Six key trends that talent teams need to be aware of
We’re quickly approaching the middle of the decade (yes, really!) and as time goes by, the challenges facing talent acquisition and management teams are growing in both size and complexity. One of the biggest and most publicized challenges has been in recruitment and retention. 75% of employers globally report difficulty in filling critical roles and even when roles are staffed, retention challenges mean that there’s no guarantee that they will remain so: 51% of HR professionals say that retention will be their biggest challenge this year.
At the same time, layoffs are taking place at a record level. Over 1.7 million people were laid off in the United States In 2023, with an estimated 224,503 layoffs in tech. Employees in tech were (and still are) the worst affected, with layoffs in the sector up by more than 700% in October 2023 when compared to 2022. More than 100,000 more layoffs have been recorded so far in 2024.
Talent teams are doing more with less
Despite these challenges forcing talent teams to do more with less, their recruitment and retention expectations have not diminished, but the way they’re approaching recruitment has. There’s a big movement to abolish outdated degree requirements for a wide range of jobs, and this is growing in both the public and private sectors. AI laws, and pay-related rules and regulations, have also proliferated worldwide.
ChatGPT and Generative AI in general are also the talk of the business world. “There seem to be a lot of new ideas emerging at the speed of light,” Anthony Ray, CHRO at Elgin Community College in Illinois, tells us. These are just two of the trends that are currently shaping the future of work against a backdrop of recruitment-related disruption.
6 talent trends shaping the future of work
Trend #1: Economic uncertainty Is causing recruitment challenges to linger
Economic uncertainty and fears of a recession are impacting consumer spending and leading to hiring slowdowns and layoffs across various sectors, not just in tech. Feeding into this is the ongoing shortage of skilled candidates.
As companies pursue transformation agendas and respond to regulatory changes alongside economic challenges, the demand for specific skills increases. However, the supply of skilled professionals is not keeping pace, leading to longer hiring processes and missed growth opportunities. A lack of growth naturally leads to budgetary constraints within organizations, further limiting their abilities to acquire skilled workers who are now demanding more competitive salaries and benefits on a wider scale. The problem only compounds from here.
Trend #2: State governments are adopting skills-based hiring
State governments are increasingly adopting skills-based hiring practices to diversify and strengthen their candidate pools, moving away from traditional reliance on educational credentials and civil service exams. This shift is aimed at addressing recruitment challenges and enhancing workforce diversity and efficiency.
Several states, including Maryland, Colorado, Utah, and Pennsylvania, have implemented skills-based hiring practices. For example, Maryland reduced formal education requirements for over half of its roles, resulting in a significant increase in hires without degrees. Similarly, Colorado's approach aims to build a more diverse workforce by promoting the hiring of individuals from varied backgrounds.
As one of the country’s largest employers, state governments can set a precedent for the private sector by adopting skills-based hiring practices. This can positively influence broader labor market practices and help open doors for skilled workers seeking opportunities and upward mobility
Trend #3: Regulators are targeting pay and AI
There’s a growing of increasing pay equity and transparency regulations in the United States. Driven by both state and federal initiatives, it’s aimed at addressing wage disparities and promoting fairness in compensation practices. 42 new laws that build on the Equal Pay Act of 1963—which mandates equal pay for equal work—have been enacted since 2022, and many states have introduced more stringent requirements, such as prohibiting salary history inquiries and mandating pay transparency.
The focus on AI regulation is also intensifying as technology plays a larger role within businesses. Over 80% of organizations have embraced AI to some extent, viewing it as a core technology within their operations. Regulators are increasingly scrutinizing AI technologies to ensure they meet ethical standards in response to this, and governments are actively developing frameworks to regulate AI, emphasizing the importance of ethical considerations in AI deployment. This regulatory focus is aimed at preventing misuse and ensuring that AI technologies contribute positively to society.
Trend #4: Generative AI is being quickly and widely adopted
Generative AI exploded into the mainstream in late 2022 with the public release of ChatGPT. Since then, it has been the subject of widespread discussion and adoption across various industries. Right now, organizations are primarily adopting generative AI by embedding it into existing applications to supplement workflows such as knowledge discovery and onboarding.
Many organizations recognize the value generative AI adds to their operations, with many planning to increase their investment in this technology. Mercer Senior Partner Jason Averbook believes that generative AI is already transforming human resources, and CHROs need to stay informed about it and adapt to it. “Ultimately,” Averbook says, “CHROs who embrace generative AI and add it into their digital strategy will foster a more agile, innovative, and competitive organization, ready to thrive in today's digital age.”
Trend #5: Talent departments are shrinking (but their workloads aren’t)
HR professionals are experiencing a significant increase in workload. According to a survey by Sage, 80% of HR leaders report being overwhelmed by the amount of work, with employee morale, burnout, and limited budgets being major concerns.
Similarly, a survey by CPHR Canada found that over 90% of HR professionals reported increased workloads, with only a small percentage gaining additional resources to manage these demands. Meanwhile, companies have reduced the number of recruiting and HR positions, sometimes by thousands, due to economic pressures and cost-cutting measures.
"HR departments continue to be challenged to attract the best and retain talent,” says Alexandria Smith, Chief HR Officer for the City of Memphis. Wharton Professor Peter Cappelli agrees. “The big worries are that [it’s] still hard to recruit and retain, still hard to deal with cost-cutting pressures.”
Trend #6: The skills ecosystem is coalescing
To date, there has been tremendous friction in the labor market contributing to a mismatch between governments, educators, employers, and individuals. Job seekers with valuable skills often find themselves frustrated, with little insight into how their skills are transferable to open jobs, or what they need to learn to bridge any skill gaps. Governments lack any deep insight into the skills and capabilities of their constituents. Educators lack real-time data on the needs of the labor market to plan curricula, and often find their graduates unprepared for careers, struggling to find jobs in the areas that were the focus of their learning.
Governments can help orchestrate the skills ecosystem by facilitating collaboration among stakeholders and providing resources for skill-building programs. This involves creating policies that align educational outcomes with industry needs and supporting initiatives that enhance employability and entrepreneurship skills.
Meanwhile, collaborations between educators and employers can help bridge the gap between education and employment. This includes co-designing curricula, co-teaching, and sharing resources to ensure that training programs meet the current and future needs of the labor market.
This is all supported by encouraging lifelong learning through flexible learning pathways and providing access to upskilling and reskilling opportunities for workers at all stages of their careers.
Are you an IT executive or skills transformation leader looking for ways to get ahead of changing workforce dynamics? There are proven skills transformation models to follow. Contact SkyHive for more information on how skills-based planning allows organizations to meet new challenges and strengthen the bottom line.
