Good morning!
The labor market may not be as temperamental as last year when the “Great Resignation” was in full swing. Still, HR leaders expect to place a premium on retention and the employee workplace experience in 2024.
Around 44% of HR leaders plan to increase hiring over the next six months, up from 38% in quarter three, according to a new survey of 194 CHROs from the Conference Board shared exclusively with Fortune. That’s a positive sign, given some economic experts (including the Conference Board) are still wary of a recession early next year.
Yet HR leaders’ pessimism is growing over employee retention and engagement. Twenty-two percent of CHROs expect retention to decrease over the next six months (from 18% last quarter), and 31% expect engagement levels to decrease in that same period, from 25% in quarter three.
“I think it's good news that companies are basically saying, ‘Yeah, we're confident enough to increase our hiring,’” says Diana Scott, U.S. human capital center leader at the Conference Board. “The downside is…they're still not very confident about being able to retain as many employees, and they're really focused on their employees' engagement.”
As a result, improving employee experience and organizational culture is CHROs’ top focus for 2024, with 75% listing it as a priority.
Scott identifies flexibility as a key driver of improving the employee experience. Previous research from the Conference Board finds that workers value workplace flexibility more than any other total rewards component, including competitive bonuses, paid time off, and retirement plans. However, only 11% of CHROs surveyed say addressing worker flexibility is a priority for 2024.
Flexibility comes in many forms. For office-based employees, one option is hybrid work. Only 10% of CHROs plan to bring workers back to the office full-time next year, and 52% say they plan to improve productivity outcomes through hybrid work arrangements. Deskless workers can benefit from flexibility options like shift swapping or fixed schedules.
“Flexibility becomes something that can increase engagement and solve some of the problems of retention across the board,” says Scott. “We know that it's something that workers want, and it's something the best organizations are prepared to figure out.”
Paige McGlauflin
paige.mcglauflin@fortune.com
@paidion
