Payscale released its 2023 End-of-Year Report, on the state of the labor market. The report included several recommendations for HR teams including prioritizing AI, work environments, pay transparency, and recruiting to build an engaged workforce. Employers face the imperative of adapting to change to effectively retain and attract talent in a shifting labor market.
Key takeaways:
Great resignation may continue: Despite declines in voluntary turnover, a notable portion of individuals indicated the intention to depart from their current roles in pursuit of better opportunities. This is especially true for those who perceive themselves as underpaid, overworked, or facing limitations in career advancement. Health care positions and technology roles, including senior product managers, rank highest on the list of jobs that employees are inclined to leave.
Work environment and benefits matter: An employer's struggle to hire may indicate a disconnect with the evolving desires of workers when it comes to benefits. Factors like PTO, a commitment to diversity and inclusion, and recognition of the significance of mental health and overall well-being remain crucial considerations for workers.
Pay transparency is top of mind: The growing implementation of pay transparency legislation at the state level may be contributing to a rise in job-seeking activity, particularly among individuals in high-demand professions or those who perceive themselves as underpaid.
Investment in recruiting tools: Despite potential AI improvements, near-term challenges highlight the need for increased investment in human-centered recruiting. Providing positive candidate experiences is crucial for employers to avoid negative impacts on their brand, as inadequate communication during the hiring process can have lasting consequences in the current job market.
Increased wages are coming: According to Payscale’s Salary Budget Survey, employers are increasing budgets around 3.8 percent for pay raises. This surpasses the pre-COVID-19 average of 3 percent and has the potential to meet or even exceed inflation in 2024.
The bottom Line: As we look ahead to 2024, the labor market presents a nuanced scenario, balancing economic uncertainties and the lasting impact of the Great Resignation. Navigating this landscape requires strategic adaptation to shifting dynamics and a focus on creating fulfilling employment experiences to align with the expectations of an empowered workforce in 2024.
