Companies Looking to Hire in the New Year Amid Talent Shortages

December 14, 2023 – Employers anticipate measured hiring in the first quarter of 2024, while persistent talent shortages continue to impede hiring efforts, according to the latest ManpowerGroup Employment Outlook Survey. The research is based on data collected from more than 40,000 employers in 41 countries. The net employment outlook for Q1 is 26 percent, up + three percent year-over-year, but down -four percent from last quarter. “The latest survey reveals that while employer hiring confidence has moderated slightly amid global economic concerns, labor markets remain tight and demand for skilled talent is still strong across multiple sectors,” said Jonas Prising, chairman and CEO of ManpowerGroup. “As companies continue to transform their business models, many are holding onto the talent they have, and struggling to find the new talent they need. This data suggests organizations are committed to offering flexible work options, recognizing that this can give them a competitive edge for attracting and retaining workers. As AI adoption gains traction, employers are turning to upskilling their workforce to maximize potential productivity gains.”

With stable outlooks across the regions, employers in North America (34 percent) region reported the strongest hiring intentions, followed by the Asia Pacific (30 percent), South and Central Americas (28 percent), and Europe, Middle East, and Africa (23 percent). Hiring expectations remain the lowest, although steady, in Europe, the Middle East, and Africa (23 percent), decreasing – two percent since Q4 2023 but improving + five percent year-over-year.

The ManpowerGroup survey found that outlooks vary across the region with employers most keen to hire in The Netherlands (37 percent), Belgium (33 percent), and Switzerland (33 percent). The weakest outlooks are in the Czech Republic (eight percent), Hungary (10 percent), and Greece (12 percent). The strongest hiring intentions globally for the transport, logistics, and automotive industry are reported by employers in Finland (69 percent); energy and utilities industry in The Netherlands (67 percent); and financials and real estate industry in Switzerland (54 percent).

Hiring managers across the Asia Pacific countries anticipate the second strongest regional outlook (30 percent), a decline from the previous quarter (- two percent) but improving year-over-year (+ five percent). India (37 percent) and China (33 percent) report the strongest outlooks in the region. The most cautious outlooks were reported by employers in Japan (10 percent) and Taiwan (19 percent).

Related: What Talent Acquisition Trends Will Dominate 2024?

Countries across North, Central, and South America report positive employment outlooks for Q1, though have decreased in ten countries quarter-over-quarter and in five compared to this time last year. The ManpowerGroup survey found that employers in Costa Rica (35 percent), the U.S. (35 percent), and Mexico (34 percent) report the strongest hiring intentions across the regions for the first quarter. The strongest outlooks globally for the communication services industry sector are reported by employers in the U.S. (74 percent); healthcare and life sciences in Costa Rica (69 percent); information technology (64 percent); and industrials and materials (49 percent) both in Puerto Rico; and consumer goods and services in Guatemala (44 percent).

Other Key Findings

Seventy-five percent of employers report difficulty finding skilled talent, matching 2022’s levels, and decreasing two percent from 2023’s survey. To find, attract, and recruit talent, the ManpowerGroup survey found that employers are offering more work flexibility (65 percent), raising wages (30 percent), and looking at new talent pools (28 percent) The top five most in-demand skills are IT & data, engineering, sales & marketing, operations & logistics, and manufacturing & production.

Strategic Talent Acquisition Planning in 2024
In the competitive landscape of talent acquisition and executive-level hiring, having a well-curated strategic plan is crucial. With the year coming to a close, a new report from McDermott + Bull’s Jason Levi Pinegar explains that it becomes pivotal to map out an executive hiring and human capital strategy for 2024 to ensure sustained success, talent retention, and future growth. The report looks into key areas to streamline your executive recruiting and leadership strategies for the upcoming year.

“Looking back over the last several years, the talent landscape has witnessed unprecedented candidate mobility and significant recalibrations,” the McDermott + Bull report said. “As a significant number of boomers approach retirement, organizations face the challenge of replacing them. The market, increasingly filled with less experienced candidates, will make recruitment progressively more demanding.”

When asked about artificial intelligence (AI), employers cite training staff, finding qualified talent, and redefining roles as the top challenges to fully leverage the technology As companies adopt more sustainable practices, employers estimate at least 54 percent of all technical skills will need to evolve to keep pace with the green transition, according to the ManpowerGroup survey.

Increased Hiring

The job market will remain resilient heading into 2024, research from talent solutions and business consulting firm Robert Half shows. According to the company’s State of U.S. Hiring Survey, 57 percent of respondents plan to add new permanent positions in the first six months of the year, while another 39 percent anticipate hiring for vacated positions. More than two-thirds (67 percent) expect to hire contract workers as part of their staffing strategy.

Among managers who plan to increase hiring, more than two-thirds (66 percent) cited company growth as the primary factor influencing their hiring decisions for the first half of 2024. In addition, more than three-quarters (77 percent) of managers who had to put projects on hold in 2023 said they plan to pick them back up in the new year.

Hiring Challenges Persist

While hiring is expected to increase, finding the right talent may not be easy. According to the survey, 90 percent of hiring managers report difficulty finding skilled professionals, and 58 percent said it takes longer to hire for open roles compared to one year ago. Some of the top factors contributing to hiring challenges include:

• Finding candidates who align with the company culture (49 percent).
• Meeting candidates’ salary expectations (48 percent).
• Lack of candidates applying for open roles (42 percent).

“Job openings continue to exceed the number of professionals looking for work,” said Dawn Fay, operational president of Robert Half. “With hiring expected to increase early in the year, employers need to have a strategic hiring plan in order to land the talent they need.”

Companies Need a Retention Plan

While workers aren’t leaving their jobs at the same rate they were during the Great Resignation, many organizations are worried about turnover. When asked about their top concerns, 91 percent of managers cited retaining top talent, and 88 percent said they worry about keeping teams motivated and engaged.

“While hiring will be a priority next year, managers shouldn’t lose sight of their current teams,” said Ms. Fay. “Now is the time to prioritize employee engagement and retention to avoid turnover and loss of productivity. Routinely researching and adjusting compensation levels, offering flexible work, and implementing policies to alleviate burnout are all effective strategies.”

Related: How CHROs Can Steer the Ship to Success in 2024

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media