2023-24

SHRMStateofthe

WorkplaceReport

Introduction

WhenSHRMaskedHRprofessionalstodescribe2023inafewwords,“change”emergedasthe

overwhelmingtheme.Despitethis,manyofthetopconcernsfrompreviousyearscarriedoverinto

2023,suggestingthatorganizationshadtostrikeabalancebetweenembracingchangeandaddressingongoingchallenges.

Whatwerethetopconcernsfororganizationsin2023?

Inflation

73%

Employeementalhealth

Laborshortages

Economicslowdown

66%

65%

58%

2023-24SHRMStateoftheWorkplaceReport2

InflationRemainsTopofMind

Notsurprisingly,inflationremainedtheNo.1concernfororganizationsin2023.AsMorningConsult

reportedinDecember2023,severaleconomicindicatorswerepositive:continuedlowunemployment,

fallinginterestratesandgrowingGDP.Yet80%ofconsumersinitssurveygavetheeconomyagradeofCorlower,andtheconsumersentimentindexremainedwellbelowitspre-pandemiclevel.Notablepriceincreasesforeverydaypurchasesappeartobetheculprit.

ofHRprofessionalssayinflationis

73%currentlyaconcernattheirorganization.1

LookingAhead

Organizationsexpectinflationtoremainachallengein2024andexpresssignificantconcernabouthowitwillimpactthelivesofhourly/nonexemptemployees(82%ofHRprofessionalsidentifiedthisconcern),salaried/

exemptemployees(69%)andcustomers/consumers(67%)—and,therefore,thebottomline.

Boundbypredeterminedannualbudgets,organizationsmayfindthemselvesgrapplingwithunexpected

financialburdensasinflationcontinuestoerode

purchasingpower.Infact,whenitcomestoachieving

2024HRpriorities,budgetconstraintsareatopbarrier.Correspondingly,theobjectiveofreducingcostsand

increasingefficienciesisatoppriorityfororganizationsin2024(citedby68%ofHRprofessionals).Thismay

provechallengingifconditionsechothoseofthe

previousyear,asonly31%ofHRprofessionalssaytheirorganizationswereextremelyorveryeffectiveatfindingwaystoreducecostsandincreaseefficienciesin2023.

1IncludesresponsesfromHRexecutivesandHRnonexecutives.

3

2023-24SHRMStateoftheWorkplaceReport

Atthesametime,currentandprospectiveemployeesarecognizantofrisingcostsandareseeking

positionsthatofferhighlycompetitivecompensation.Thismayputorganizationsinatrickyposition,

becauseonly27%ofHRexecutivessaytheyfactorinflationintoannualpayraises.Amidbudget

constraints,organizationsmustfindwaystoensurethatworkerscontinuetofeelvalued,especiallysinceretainingproductiveworkersismorecost-effectivethantryingtoreplacethem.

Nearly9in10U.S.workers(87%)believe

faircompensationforcurrentemployeesshouldbethetoppriority.2

Yet8%oforganizationsareplanningnoraisesatall.Thosethatareprimarilyanticipatemodestbumpsoflessthan5%.3

Projectedcompensationincreasesfor2024

13%

8%

Noincreaseplanned

24%

>0%to2.9%

3%to4.9%

55%

5%ormore

2Throughoutthetext,“U.S.workers”referstoemployeeswhoworkoutsideofHRdepartments.3Refersonlytoorganizationsthatindicatedtheyexpecttopaymorefortalentin2024.

2023-24SHRMStateoftheWorkplaceReport4

2023-24SHRMStateoftheWorkplaceReport5

LaborShortagesPersist

Concernoverlaborshortagesremainedamongthetopthreechallengesfor2023,especiallygivenongoingbudgetaryconstraintsandthecompetitivetalentlandscape.FindingqualifiedcandidatesremainedbyfarthesorestpainpointforHRprofessionals,followedbytheinabilitytooffer

competitivecompensation.

Whatwasyourorganization’sgreatestchallengeinacquiringtalentin2023?

Lackofqualifiedcandidates

Uncompetitivecompensation

Demandforin-personwork

Nocareeradvancement

Lackofscheduleflexibility

58%

40%

27%

26%

24%

U.S.workersoutsideofHRarefrustratedbystaffingshortagesandthetollthatheavyworkloadstakeonthem.TheygradedtalentacquisitionastheareawheretheirHRdepartmentswereleast

successfulin2023.

HowrespondentsgradedHRdepartmentsontalentacquisition:

B-

HRworkers4

C-

U.S.workers

B

HRexecutives

4ReferstononexecutiveHRworkers.

LookingAhead

HRdepartmentsaretakingseveralstepstoimproverecruitmentin2024,including:

Recruitingfrommorediverseandunderutilizedtalentpools,suchaspeoplewithdisabilitiesandformerlyincarceratedpeople(62%).

Usingpre-employmenttestsorassessmentstoidentifyqualifiedcandidates(35%).

Relaxingeducation/degreerequirements(28%).

Despitetheseplans,persistentlaborshortagesareforcingHRdepartmentstothinkmorestrategicallyaboutworkforcemanagementfor2024.Inparticular,organizationsareprioritizingsupportfortheir

existingworkforceaheadofbringinginnewtalent.

Thetopthreeprioritiesfororganizationsin2024,accordingtoHRprofessionals:

1.Maintainingemployeemoraleandengagement(81%).

2.Retainingtoptalent(78%).

3.Findingandrecruitingtalentwiththenecessaryskills(70%).

WorkersoutsideofHRlargelyagree.Theirtopfivepriorities(allat80%orabove)are:

1.Providingfaircompensationforcurrentemployees.

2.Maintainingemployeemoraleandengagement.

3.Providinggoodhealthcarecoverage.

4.Retainingtoptalent.

5.Findingandrecruitingtalentwiththenecessaryskills.

e6

2023-24SHRMStateoftheWorkplaceReport

2023-24SHRMStateoftheWorkplaceReport7

Anotherimportantcomponentofemployeemoraleandengagementisarespectfulworkplaceculture:

58%ofHRprofessionalssaidtheirorganizationswereeffectiveorveryeffectiveinensuringacivilandrespectfulworkplacein2023.U.S.workersalsonotedcivilityasanareaofhighorganizationaleffectiveness.Ontheotherhand,while90%ofHRprofessionalsreporthavinghadmostlypositiveinteractionswithco-workers,only67%ofU.S.workerssaidthesame.

Whilemaintainingemployeemoraleandretainingtoptalentremaintopprioritiesfor2024,thestrategicvisionfortheyearincorporatesseveraltargetedinitiativestohelpaddresscoreneeds—suchas

employeereskilling,leadershipdevelopmentandmentoringprograms.

1.

Traininganddevelopmentforpeoplemanagersremainsvital.

Managerscanmakeorbreakanemployee’sexperienceatwork.Improvingpeople

managers’understandingoftheirrolesand

developingtheirsoftskills(suchasempathy)aretopplansfor2024(bothselectedby76%ofHRprofessionals).

2.

Upskilling/reskillingcurrentemployeesisahighpriority.

Upskillingorreskillingthecurrentworkforceisatoppriorityfor53%oforganizations.Thisattentionisimportantforatleasttworeasons:

Employeeupskilling/reskillingranksnearthebottomoffunctionswhereHR

professionalsbelievetheirorganizationsweresuccessful.In2023,only21%

reportedthattheirorganizationswereeffectiveinthisarea.

AcombinationofBabyBoomersretiring

andartificialintelligencecapabilities

expandingislikelytodriveagreaterneedforworkforcereskilling.

3.Successionplanningandmentoring

receiveattention.

For49%oforganizations,successionplanningisatoppriority.Meanwhile,63%plantosupportaformalorinformalmentoringprogramin2024.

2023-24SHRMStateoftheWorkplaceReport8

TheCurrentStateofHumanResources

HRprofessionalsexpressnotablypositiveattitudestowardtheirorganizationsandtheirroles,andtheycontinuetohaveaseatattheleadershiptableregardlessoftheirlevelintheorganization.Infact,78%ofHRprofessionalsreportthatseniorleadersrelyontheirhelptonavigatenewsituationsorpractices.

What’smore,89%ofHRprofessionalsreportimmenseprideintheworkthattheydo.HRprofessionalshavepositivefeelingsaboutnotonlytheirrolesbutalsotheirorganizations.Indeed,HRprofessionalshavesubstantiallymorepositiveattitudestowardtheirorganizationsthanotheremployeesdo.For

example,77%ofHRprofessionalswouldrecommendtheirorganizationtoothersasagreatplacetowork,comparedto53%ofotheremployees.

Wouldrecommendtheiremployerasagreatplacetowork:

77%

ofHRprofessionals

53%

ofU.S.workers

Despitethesepositiveattitudes,morethanaquarterofHRprofessionalsareactivelysearchingfora

newjoborplanningtodosoin2024.TurnoverintentamongHRprofessionalsactuallyexceedstherateinthenon-HRworkforce.

Turnoverintentbytypeofrespondent:

HRprofessionals

U.S.workers

I’mactivelysearchingforanotherjob.

27%

25%

Iintendtopursueajobinanotherorganizationin2024.

28%

26%

ItappearsthatmanyHRprofessionalsmaybestressed,overworkedandstrugglingwithunderstaffeddepartments.ThemajorityofHRprofessionalsreportworkingbeyondnormalcapacity(57%),and

therearesignificantturnoverimplicationsasaresult.Specifically,thosewhoareworkingbeyond

typicalcapacityaremorelikelythantheircolleagueswhoarenottobesearchingforanotherjob

(31%versus22%).Inaddition,56%ofHRprofessionalssaytheirdepartmentlackssufficientstaffto

covertheworkload.HRprofessionalsinunderstaffeddepartmentsaremorelikelythantheirpeersinadequatelystaffedHRdepartmentstobeactivelyjobhunting(34%versus22%).

MorethanhalfofHRdepartmentsareunderstaffedandworkingbeyondcapacity.

PerhapsthisiswhymanyHRexecutivessaythegreatestbarriertoachievingtheirdepartment’s2024prioritiesislackoftimeanddedicatedpersonnel(58%citethisastheirtopbarrier).

LookingAhead

AlargeshareofHRdepartmentsplantoincreasetheirHRcompensationbudgetsin2024.

Acrosstheboard,lowerpercentagesofHRprofessionalsarepredictingbudgetincreasesinany

functionalareaofHRcomparedto2023.Yet34%ofHRdepartmentsplantoincreasetheirbudget

forHRemployeecompensationfor2024,makingitthesecond-highestareaintermsofincreased

investment.HRdepartmentshaveafront-rowseattoviewthehighersalariesnewlyhiredemployeesattainbyjobhopping,andequitablecompensationwillbeessentialtoretainHRemployees.

HRdepartmentstaffingisunlikelytoincreasein2024.

Only19%ofHRexecutivesexpecttobeabletoincreasetheirdepartmentheadcount.Thefactthat

staffinglevelsareunlikelytochangeisanotherreasonwhyfindinggreaterefficiencieswillbeimportanttoreduceburnoutin2024.

2023-24SHRMStateoftheWorkplaceReport9

2023-24SHRMStateoftheWorkplaceReport10

OrganizationsMoveTowardArtificialIntelligencewith

ThoughtfulPrecision

Overthepastyear,themediahasbuzzedwithexcitementandspeculationregardingtheintegrationofAIintheworkplace,anditisn’tjusthype.Infact,aquarterofHRdepartmentsareusingAItoday.

ButwhereexactlyisAIbeingintegrated?Mostlyfortalentacquisition,followedbyemployeetraininganddevelopment—bothareaswhereHRprofessionalsreportmajorchallengesandopportunitiesfor2024.

ForwhichHRfunctionsdoyouuseAI?

Talentacquisition

Employeetraininganddevelopment

Peopleanalytics

Employeewellnessbenefits/activities

Leadershipdevelopment

Newemployeeorientation

Organizationalculturechange/shaping

IE&D

Employeelistening

42%

36%

21%

18%

16%

16%

15%

9%

6%

DespitethewidespreadnoticeAIhasgained,bothHRprofessionalsandU.S.workersoutsideHRrankedthistopiclastintermsoforganizationaleffectivenessin2023.

Only12%ofHRprofessionalsand15%ofU.S.workers

believethattheirorganizationiseffectivelyintegratingAIintotheworkplace.

Theissueisnotassimpleastechnophobia,since66%ofHRprofessionalsreportedusingtechnologytoimprovetheHRfunctionin2023.GiventhatAIissonew,perhapsitisyettobeintegratedinto

workprocesses.Plus,trainingandsupportareneededtoensureappropriateandethicalusesofAI,andwithHRdepartmentsworkingbeyondcapacity,theyarelikelydirectingtheirresourcestomoreurgentissues.

2023-24SHRMStateoftheWorkplaceReport11

LookingAhead

EmployersaremovingcautiouslybutstrategicallytouseAIforspecificfunctions.RoughlyaquarterofHRdepartmentsplantoadoptAIapplicationsin2024orthereafter.Thismeansthatby2025,halfofHR

departmentscouldbeusingAI.Despitethis,only20%ofHRprofessionalsreportthatintegratingAIintotheworkplaceisahighpriorityfor2024.Likewise,U.S.workersdonotbelieveintegratingAIshouldbeanHRpriority,rankingit23rdoutof24priorities.

11%

plantoadoptafter2024

By2025,halfofHRdepartmentscouldbeusingAI:

25%

currentlyuse

15%

plantoadoptin2024

Currently,75%oforganizationshavenoguidelinesorpoliciesregardingtheuseofgenerativeAI.

Yetnearlyathirdoforganizations(30%)plantouseAI-basedtechnologytoimproveemployeeeffectivenessin2024.

HavingpoliciesinplacegoverningtheuseofAIiscrucialfororganizationstoguideethicalbehavior,

ensurelegalcompliance,mitigaterisksandbuildtrustwithemployeesandotherstakeholders.AsAI

makesinroadsintotheworkplace,organizationswillhavetomovequicklytocreateapolicyframeworkthatensuresresponsibleuseofAI,particularlyinfunctionssuchastalentacquisitionandperformancemanagementwhereitmayexhibitorreinforcebiases.

2023-24SHRMStateoftheWorkplaceReport

.

.

12

Recommendationsfor2024andBeyond

1.MakejudicioususeofAItoaddresskeypriorities.

AIhasthepotentialtoofferimpactfulsolutionsfortopworkplaceprioritiesin2024.Hereareoptionsthatorganizationsmayconsider:

TargetedAIapplicationsthatminimizerepetitiveandtime-consumingworkcanhelpreduce

costsandincreaseefficiencies.AIapplicationsthatstreamlineHRfunctionscouldbevaluabletoolsforreducingHRprofessionals’workloadsandstresslevels.

HRdepartmentsnotyetusingAIfortalentacquisitionmayfindthatthisisanavenuetoreduce

talentshortages.AIcanstreamlinetherecruitmentprocessbygeneratingjobdescriptions,

efficientlyreviewingandscreeningresumes,communicatingwithapplicantsduringtheinterviewprocess,andidentifyingsuitablecandidates,tonamejustafewsteps.Additionally,itsability

toanalyzepatternsandpredictcandidatesuccessmayenhancetheoverallqualityofhireswhileincreasingtheobjectivityofhiringandpromotiondecisions.

BothgamificationandAIhavethepotentialtoexpandinitiativesinemployeeupskilling,reskillingandprofessionaldevelopment.Together,thesetechnologiescreateamoredynamiclearning

environmentthatcanbepersonalizedtoanindividualemployee’sperformanceandpreferences.

Forexample,AIcanidentifyskillsgapsandtailorthelearningexperienceaccordingly.

2.Asanaspectofemployeedevelopment,buildoutandincreaseemployeeknowledgeofcareerpaths.

AccordingtoSHRMresearchonthestateofmentalhealthin2023,opportunitiesforgrowth

withintheworkplacerepresentthesinglebiggestfactorinemployees’overallmentalwell-being—

surpassingevenjobsecurity.

Globally,thisisalsoakeyfactor

inanemployee’sdecisiontoremain

withtheircurrentemployerratherthanseekapositionelsewhere.Providingworkerswithclearpathstoadvancementmayhelpimproveretention,reduceskillsgapsandincreaseproductivity,allwhile

containingcosts.

2023-24SHRMStateoftheWorkplaceReport13

3.

Leanintocurrentstrengthstoattractand,moreimportantly,retainworkers.

Withstagnantbudgetsandmodestcompensationincreasesprojectedfor2024,organizationsneedtobuildontheir

existingstrengthstoattractandretaintalent.Agood

placetostartiswhereorganizationsmayalreadybemosteffective:theirbenefitspackages.Forinstance,providingaffordableandcomprehensivehealthcarecoverageistheareaofgreatestHReffectiveness(accordingto60%ofHRprofessionals).SomeHRdepartments(35%)areplanningtoimproveworkplacepoliciesaroundleaveandflexible

work,anothercost-effectivewaytobuildengagement.Inanotherexample,mentalhealthwasthesecond-greatestconcernforHRprofessionalsin2023,yetonly35%ofHRprofessionalsbelievetheirorganizationswereeffectiveinsupportingemployeeswithmentalhealthconcerns.Thisimpliesexistingofferingsandresourcesarenotbeing

communicatedaseffectivelyastheycouldbe.

4.

Sustaincivilityinanelectionyear.

Amidthesechallenges,itisimportantnottounderestimatepotentialpitfalls.Forexample,bothHRprofessionalsand

U.S.workersagreethatworkplacecivilityisanareaof

strength,butHRdepartmentsmustnotlettheirguarddownasweenteranelectionyear,whenpoliticalpolarization

tendstoheighten.Vigilanceiskeyinsustainingacivilandinclusiveworkenvironment.

2023-24SHRMStateoftheWorkplaceReport14

Conclusion

The2023-24snapshotofwhe