2.5 minute read
The labor market is expected to somewhat improve in 2024, but employers will still face challenges in attracting and retaining talented employees. Skills gaps and high inflation remain obstacles, but the entry of Generation Z (Gen Z) workers into the workforce is expected to benefit employers. Employers that prioritize learning and development, transparency, and competitive compensation will be better equipped to attract and retain high-demand workers. Here are five trends to watch in 2024:
Labor Market Eases, Remains Competitive
The labor market has eased a bit from the extremes of the COVID-19 pandemic, with job openings and hiring rate declining. Many employees are choosing to stay with their current employers, reducing the need for replacements and shifting the labor market in favor of employers. Wage growth is expected to cool, but if rates come down in the new year, there could be an increase in employers' demand for labor and expansion. The labor market is expected to remain competitive in 2024 with high job-switching.
Keeping Up with Pay
Inflation has led to increased living costs, prompting many employers to raise wages in 2024. According to LinkedIn's 2024 Future State of Hiring and Retention report, over half of employers plan to increase starting salaries. Additionally, employers are enhancing compensation packages, including benefits such as remote work options and flexible arrangements.
Generation Z
According to Glassdoor's recent Workplace Trends report, Gen Z workers (born between 1997-2012) have different workforce needs and expectations. Employers may need to adapt strategies to attract and retain this socially conscious demographic, prioritizing company culture, social connection, development opportunities, and workplace flexibility.
Pay Transparency
Savvy employers are leveraging pay transparency to attract workers. A recent study by ResumeLab found that 4 out of 5 workers are unlikely to apply to a job that doesn't provide a pay range. This practice is especially popular among younger generations and can enhance an employer's reputation for fair compensation. To meet growing demands, many states are enacting legislation to require transparency. Employers, especially those with workers across multiple jurisdictions, should closely monitor evolving legislation.
Skills-based Hiring
Finding workers with the desired qualifications is expected to challenge organizations in 2024. Employers are refocusing their hiring efforts on skills-based hiring, prioritizing candidates with the right skills rather than specific education or experience. This approach helps employers find skilled candidates for open roles by recognizing workers' abilities to learn and develop, providing robust learning and growth initiatives, and focusing on candidates who are an excellent cultural fit.
Summary
As the labor market evolves, employers can stay competitive by monitoring employees' needs and wants. This allows organizations to elevate their talent strategies and attract and retain talented workers. Download the bulletin for more details.
National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.
