2024 Talent Trends: August 2024 EN:Insights Forum

For the August EN:Insights Forum, members heard all about SHRM’s latest research on what’s going on across the talent landscape. Kerri Nelson, SHRM’s director of mission research, noted that employers continue to see significant challenges in both recruiting and retention, which is leading to some creative approaches across different industries. As with all things in HR today, changing technology is also a driving force in the struggle to find talent due to the need for new skills.

Here are five critical insights from the research.

Research Insight 1: More than 3 in 4 employers struggle with recruiting. This is a slight drop from the peak of the Great Resignation in 2022, when 91%—more than 9 in 10 employers—reported having difficulties recruiting for their full-time, regular positions over a 12-month period. 

Supply and demand remain the top recruiting challenge:

• Low number of applicants: 60%
• Competition from other employers: 55%
• An increase in candidate ghosting: 46% 

Candidate skills challenges:

• Insufficient work experience: 40%
• Lacking the right technical skills: 37%
• Missing the right soft skills: 30% 

Compensation and benefits challenges:

• Salaries are not competitive for the market: 39%
• Inability to offer flexible work arrangements: 37%
• Candidates reject compensation package: 27%

“If this is a challenge that you and your organization have been grappling with, you’re definitely not alone,” Nelson said. “The supply and demand challenge is the top reason driving these recruitment challenges. This issue is coming from both a low number of applicants paired with competition among employers for that limited talent pool.”

Research Insight 2: The size of the candidate pool doesn’t match the needs of the job market. In June, there was slightly more than 8.1 million job openings in the U.S., but only 6.8 million unemployed people. If all were placed, organizations would still be forced to cope with more than 1.3 million unfilled jobs. 

A key contributor to current and future talent shortages is the steady decline in U.S. population growth. These large and ongoing shifts in the labor force will continue to exacerbate these talent shortages unless organizations can find meaningful solutions. One tactic is to utilize longstanding recruitment strategies.

The most effective recruitment strategies are underutilized:

• Improving compensation: 56% rank in their top three most effective strategies 
  (2nd most utilized strategy)
• Offering flexible work arrangements: 54% rank in their top three most effective strategies 
  (14th most utilized strategy) 
• Monetary incentives for candidates: 40% rank in their top three most effective strategies 
  (12th most utilized strategy)
• Train current workers for hard-to-fill jobs: 40% rank in their top three most effective strategies 
  (10th most utilized strategy)

“These are the top four effective strategies based on our research,” Nelson said. “Training existing employees to take on hard-to-fill positions is tied with providing monetary incentives to candidates as the third most effective strategy, but it’s only the 10th most utilized strategy employers are using right now. We found that this has been a top three strategy since we’ve been tracking this back in 2016, but we’re not seeing the uptake we’d expect for that strategy.”  

Research Insight 3: Employers across industries are getting creative in their approaches to recruiting talent. While it’s helpful to look at overall trends to solve the problem, scrutinizing the unique strategies deployed at the industry level can pinpoint the unique factors that individual organizations face.   

Industry-specific recruitment trends:

• Health Care/Social Assistance - Improve compensation: 62% (versus 51% for all industries)
• Hospitality/Food/Leisure - Include pay ranges in job postings: 59% (versus 45% for all industries)
• Manufacturing - Utilize a recruitment agency: 48% (versus 33% for all industries) 
• Government and Education - Expand advertising efforts: 54% (versus 43% for all industries)
• Professional/Scientific/Technical - Offer flexible work options: 42% (versus 30% for all industries) 

“There are a lot of different creative solutions to approaching these persistent labor challenges,” Nelson said. “That includes engaging in skills-first hiring, leveraging foreign-born talent, or upskilling and reskilling your current workforce.”                                     

Research Insight 4: 1 out of every 4 organizations (25%) say that the full-time regular positions they’ve hired for in the last 12 months have required new skills. More than 3 out of every 4 organizations say it’s been somewhat (62%) or very (14%) difficult to find qualified individuals for their open positions requiring these skills.

Top four reasons positions have required new skills:

1. Growth of organization (staff size, revenue, sales): 55% (-6 percentage points from 2022)
2. Changing technology: 51% (+3 percentage points from 2022)
3. Developing or offering new products/services: 41% (+12 percentage points from 2022)
4. Changing customer/client expectations: 40% (+6 percentage points from 2022)

“While organizational growth is still a big driver of the need for these new skills, we’re also seeing an uptick in things like need for new skills due to changing technology,” Nelson said. “This includes things like AI as well as companies working to develop new services, products, or offerings in order to meet changing customer or client expectations.”

Research Insight 5: According to SHRM’s talent trends research, nearly half of companies report experiencing difficulty retaining their full-time employees in the last 12 months. This trend is mirrored by the economic data on quit rates.

Top five reasons for retention challenges:

1. Salaries/pay are not competitive for the market: 56%
2. Employees’ personal reasons: 54%
3. Poor people managers/leaders: 50%
4. Limited advancement opportunities: 49% 
5. Lack of flexible work arrangements, such as remote work: 44%          

“Even though employees are leaving their jobs at much lower rates compared with the pace during the Great Resignation, quit rates are still fairly elevated compared to where they’ve been historically,” Nelson said.

Sherri Reese, Michigan State University: AI and Work/Life Balance Are the Big Emerging Trends

Sherri Reese has more than 20 years of experience in HR, investigations, and academia, evolving from regulatory roles in state government to becoming the director of talent at Michigan State University and a professor at the University of Arkansas. Much of her work focuses on policy compliance, career, and talent development. Reese holds a doctorate in public policy and administration and industrial and organizational psychology. Her expertise also includes contract negotiations, talent development, diversity, and executive coaching.

“A lot of the research discussed today reflects what’s happening today, especially with the shift as Baby Boomers are retiring. Gen Z is poised to overtake Baby Boomers in full-time employment. A study from Deloitte found that there would be a 25% increase in the Gen Z population in the workforce by 2025.   

“An increased emphasis on the work/life balance and employee health and wellness is another trend I’m seeing, along with about a 17% increase in job posts mentioning roles that involve using generative AI. Another important trend is the move toward skill-based hiring and talent management and developing skills architectures to match candidates to roles based on capabilities rather than their credentials.”  

Here are some excerpts from Reese’s Q&A during the August 2024 EN:Insights Forum.

How do the trends that you’re seeing now compare to the traditional employment models? 

You don’t see a lot of the traditional employment model where folks are coming to the office every day, where they have long commutes. You can live in Michigan and work in Texas, so there’s a lot of flexibility and remote or hybrid scheduling. Employment interviews used to all be in person, and now, you’ve got video interviewing. Here at Michigan State University, when we invite individuals to interviews, we even provide tips for what the background should look like so that there’s no distraction, as well as minimizing biases. I’ve even seen the rise of sending questions prior to the interview to help folks with neurodiverse concerns. And that’s all part of the focus now on skills-based hiring and removing biases in the hiring process. 

Which immersion skills and qualifications are becoming increasingly more important in today’s job market?

I have found that employers are now looking for adaptability and resilience as a skill because it’s so important that individuals are able to think critically and have good problem-solving capabilities, along with an understanding of AI algorithms and the ability to handle data analysis. I’m also seeing an increase in requirements for data analytics and for folks to bring data to the table. 

Project management is something that has been increasing among emerging skills, along with programming and coding, especially with the rise of artificial intelligence. Employers want to know if people are skilled at using Python or Java, for example, as organizations redesign their websites and application processes to be more marketable and to attract good talent.

Can you give us a sense of what roles you’re finding AI to be very valuable for versus roles where it’s not as valuable? 

We found that using AI speeds up recruitment, with one study that found the time to fill positions is being cut by 40%. Automating HR tasks like sourcing and doing the initial screenings helps remove the need to review them every day. Tools like programmatic advertising and AI-driven scheduling are sort of revolutionizing the candidate experience. I mean, now your CRM (candidate relationship management system) can reach out to a candidate while you’re sleeping and say, “Hey, you matched this position beautifully, so please apply.”

AI is also minimizing the risk of bad hires because it can forecast which candidates are more likely to succeed. It’s important to understand its use because if you just leave it to AI devices to figure everything out, you don’t have the people behind it to guide the programming nor the understanding of the algorithms to ensure that it’s minimizing bias in the process. 

We hear a lot about “bringing your whole self to work,” which is really wonderful. How are you encouraging that at Michigan State University? 

We have employee resource groups that are virtual and in person. We have summits for our leadership team and offer people who aren’t in leadership roles opportunities to participate in those conversations. You get to choose how you show up to the conversation, but they’re not recorded. These are authentic conversations where you can say, “Here’s what I’m thinking. Here is how I’m feeling.” You can just choose to be off camera, you can call in if you want. It’s a way to create psychological safety for folks to come in and be who they are at all times. 

We also have increased our—we call them care and intervention team individuals here—and those are our social workers. If an employee is struggling—they’re not in crisis or anything like that, maybe they lost an immediate family member or something else—we engage our care team to check in and see: What are the employees’ needs? How can we support you better? Moving away from the space of “don’t ask, don’t tell” to “let’s talk.” Let’s figure out what’s going on and share so that we can give you support. 

Additional Takeaways

• Supporting employee well-being plays a crucial role in attracting and retaining top talent. Workers want to know: “Am I able to go and see a therapist if need be? What is part of that benefits package that you offer?”

• Implementing continuous learning and development leads to employee engagement. People are tired of being surveyed. If we’re going to create employee surveys and ask their needs, be prepared to implement those learning opportunities through programming.
   

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