Top Trends for HR Leaders in 2024
January 19, 2024 – With 2024 underway, HR leaders must reflect on the people trends that characterized the past year to effectively shape future talent strategies. A new report from Frederickson Partners’ Ben Taylor explores HR trends that will have a significant impact in 2024, including the evolving roles of chief people officers and CHROs, the impact of AI in HR, the need for interim leadership, the growth of the gig economy, and the growing need for strategic finance leaders and legal experts. Delving into these trends will help equip HR leaders with knowledge and foresight to navigate the complex and ever-changing work environment of 2024 effectively.
Trend 1: Evolving Skill Sets for CPOs and CHROs.
In 2023, the role of CPOs and CHROs continued to evolve dramatically in response to new challenges, according to the Frederickson Partners. “Top HR leaders are now strategic partners, no longer confined to the operational back-office,” the report said. “These leaders serve as vital counsel on issues where human capital connects with organizational strategy.”
Today’s CPOs provide insight that is critical in shaping company direction, and reflects their deep understanding of the workforce as a key driver of the business. Frederickson Partners points to these skill sets for today’s HR leaders.
• CPOs are at the forefront in identifying and cultivating the necessary skills and competencies within the workforce to help steer business transformation.
• They must know how to harness the power of HR analytics, including adopting relevant tools and equipping the People team with the knowledge and training to develop evidence-based strategies that improve talent acquisition, development, and retention.
• From total rewards functions to enabling self-service portals for payroll and performance management, People leaders are enhancing digital accessibility and empowering employees to take charge of their professional journey.
• They are pioneering initiatives that make wellness an integral part of the employee experience.
• From an ethics perspective, CPOs must be increasingly vigilant as they deploy HR technologies.
• As more organizations are adopting AI into their core processes, there is an urgent push for CPOs to be well-versed in AI and automation, so that HR and the organization integrate these technologies effectively.
Trend 2: The Impact of AI on HR.
Moving beyond the fear-based narrative surrounding AI in HR, there’s a growing recognition of its potential to address burnout and increase efficiency in organizations says a report from Josh Bersin. In 2023, Frederickson Partners saw significant AI integration across various business sectors, including HR. This trend, offering both challenges and opportunities, particularly in talent acquisition, is expected to continue in 2024 the firm says.
Ben Taylor serves as chief of staff, HR executive search a Frederickson where he manages the project plans and timelines for each of the five HR search teams conducting up to 30 HR searches concurrently. Recent projects include multiple HR searches in New York, Washington, D.C., Florida, Seattle, and San Francisco. Prior to moving into the chief of staff role, he managed the branding and marketing functions for the firm.
According to Business News Daily, AI is reshaping HR in several key ways:
- Streamlining HR Functions: A majority of surveyed HR leaders said they are already utilizing AI across different HR functions such as employee records management, payroll processing, recruitment, performance management, and onboarding, with plans to increase AI usage in the future.
- Revolutionizing Recruitment: AI can substantially reduce the time spent on recruitment by automating tasks from job postings to job offers. It aids in sourcing talent, particularly in technical roles, by automating repetitive tasks and providing insights into employee performance and candidate outreach.
- Enhancing Onboarding Processes: AI-powered chatbots can make onboarding smoother and more personalized, assuring that new employees receive guided support. This technology also frees HR staff to focus on more complex tasks.
- Employee Monitoring and Analytics: AI now plays a role in monitoring employee productivity and engagement, providing HR teams with valuable insights. This includes detecting signs of burnout or misconduct and optimizing workflows.
- Improving Decision-making and Efficiency: As an example, AI can enhance hiring by streamlining screening and selection, analyzing resumes, and assisting recruiters in making better hiring decisions. It also aids in eliminating biases and guesswork in HR processes.
- Data Privacy and Cybersecurity Concerns: With the increasing use of AI to store business information, HR departments must ensure robust cybersecurity measures to protect personal employee data and maintain trust.
“Despite its benefits, AI has limitations. For instance, tools may reject qualified candidates due to overly stringent job requirements or gaps in resumes,” the Frederickson Partners said. “HR professionals need to complement AI with their own intuition and experience for the best decision-making. The integration to date of AI into HR is a testament to its potential to revolutionize the field. However, HR leaders must approach this technology with a strategic mindset, recognizing both its capabilities and limitations, in order to fully harness its benefits in 2024.”
Trend 3: Interim Leadership: A Flexible Approach in HR
Leadership recruitment in 2023 saw an increased use of interim executives, the Frederickson Partners report explains. “This approach addresses immediate challenges and organizational transformations in a rapidly evolving business landscape marked by high turnover, leadership scarcity, and a need for adaptive strategies,” the search firm said. “Interim executives provide stability and direction during transitional periods, offering fresh insights and specialized skills. Their temporary role is a strategic solution for businesses navigating economic uncertainty, operational continuity, and the complexities of a global market.”
Trend 4: Gig Economy’s Influence on HR Executive Roles
Frederickson Partners also notes that the gig economy’s growth in 2023 helped re-shape the function and demand for HR executives, requiring HR leaders to adapt to more flexible hiring practices and consider bringing on Interim and Fractional leaders. According to the World Bank, “the ‘gig economy’ accounts for up to 12 percent of the global labor market—much higher than previously estimated.”
Related: What CHROs Need to Know About DEI Moving Forward
“2023 saw a significant shift in executive hiring strategies, with organizations increasingly adopting the practice of engaging interim and fractional leaders,” the Frederickson Partners report said. “This approach reflects a strategic evolution, integrating flexible, specialized leadership to navigate transitional phases and specific projects within companies. It represents a modern response to dynamic business needs, offering expertise and adaptability without long-term commitment.” The firm defines two types of interim workers.
- Fractional employment refers to hiring individuals for specific parts of their time on a contract basis, as opposed to full-time. This allows businesses to flexibly engage workers for certain tasks or projects without long-term employment commitments.
- Interim executives and leaders, a subset of fractional employment, are temporary executives brought in during transitional periods. They provide expertise and guidance to navigate changes, like organizational restructuring or filling leadership gaps, without the long-term obligations of a full hire.
Trend 5: Responding to Socioeconomic Changes and Strategic Integration of Finance Expertise.
In 2023, with economic challenges like rising inflation, soaring interest rates, and increased uncertainties, Frederickson Partners notes that organizations faced significant hurdles in achieving sustainable growth. “In this context, the role of finance executives, particularly CFOs, became more critical than ever,” the report said. “Their strategic input was essential in navigating challenging times and steering companies toward stability and resilience. The CFO’s role is important in this environment as a key strategic player who can help the company drive growth and adapt to market changes. The necessity for CFOs and legal experts in guiding organizational decision-making to guide complex economic issues cannot be overstated.”
How CHROs Can Steer the Ship to Success in 2024
What does it mean to lead with vision? That’s the question on our minds as we head into 2024, and you’ve probably thought about it, too. We talk so much about the importance of outstanding leadership, but we must remember the other piece of that puzzle: getting people ready to take on and succeed in leadership roles, according to Ruben Moreno, HR practice lead for Blue Rock Search. Without a strong strategy for leadership development, how can we expect our leaders to meet today’s challenges?
Notably, the 2023 Independent Talent Report by the Business Talent Group revealed a marked increase in demand for interim executives in finance roles like interim CFOs. Frederickson Partners explains that this trend underscores the growing recognition of the CFO’s importance in the corporate ecosystem. Given ongoing economic uncertainties, the firm says that this trend is likely to continue into 2024. “Leaders who may be reluctant to hire a CFO should consider opting for an interim CFO, to ensure strategic financial guidance and adaptability in these unpredictable times,” said the study.
Trend 6: Emphasizing Total Rewards in Talent Strategy
In 2023, companies enhanced their benefits and wellness programs to attract and retain talent by developing comprehensive total rewards strategies. These strategies support recruitment, retention, and engagement while maintaining competitive advantage amidst challenges like inflation and talent shortages, according to the Frederickson Partners report.
“Total rewards include cash compensation, benefits, employee recognition, advancement opportunities, and employee care programs; this comprehensive range of benefits addresses the current trend of high turnover and a war for talent,” said the report. “The role of total rewards leaders is becoming increasingly critical in designing these strategies to meet the evolving needs of the workforce and organizational objectives.”
Trend 7: Among Open Roles for HR Leadership in 2023, Heads of HR Roles Dominated — DEI and TA Roles were Also Strong.
For people leaders, Frederickson Partners explains that understanding this past year’s hiring trends across sectors is pivotal for your strategic planning for 2024. “This insight allows you to precisely tailor your HR hiring strategies to the unique demands of your industry,” the search firm said. “By foreseeing skill requirements and adapting to emerging workforce trends, you can also ensure effective talent management, crucial for maintaining a competitive edge. This forward-thinking approach is key to developing a resilient, skilled workforce, enabling your organization to thrive in a dynamic business environment.”
Frederickson Partners says that it’s clear that the HR domain is undergoing transformative changes. “From the evolving roles of CPOs and CHROs, and the strategic incorporation of AI into HR functions, to the flexibility offered by interim leadership and the impact of the gig economy, among these 2024 HR trends, each one underscores the need for HR leaders to stay informed and adaptive,” the firm said. “It’s critical for HR leaders to leverage these insights for strategic planning and talent management, to help their organizations not only adapt but thrive in this dynamic landscape of the workplace and People management today.”
Related: 7 Qualities and Experiences Needed to be a CHRO
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media
