As we kick off the new year, we asked our practice group leaders to reflect on the trends they have seen in their industry in 2023 and what may lie ahead in 2024. John Staines, Managing Partner, Global Human Resources, discusses significant layoffs, hiring freezes, talent acquisition support, and what business leaders should be thinking about to stay ahead in 2024.
Trends in 2023
Significant Tech Layoffs: The industry saw a significant number of layoffs in the early part of 2023; the highest number of layoffs in the United States was in California, with 62k layoffs spanning 1,114 businesses. Unfortunately, companies have had to restructure to take costs out of the business. In the last quarter of 2023, we saw more layoffs, with larger organizations laying off up to 20% of their employee base.
Pushing the Pause Button on Hiring: In 2023, there was a slowdown in hiring in place for many organizations. According to KPMG, total hiring slowed in 2023 to 71.4 million, compared to 77.2 million in 2022. As a result, business leaders were promoted from within or had to look within their organization for team members to assist temporarily on assignments.
Talent Acquisition Partners with Executive Search for Success: In the war for talent, internal talent acquisition teams are working with executive search companies to partner for success; the partnership between the two is important for hiring the right leaders. As hiring the right talent remained challenging, internal TA teams were stretched thin and are now still leaning on executive search consultants to identify and place leaders.
Predictions for 2024
- Hiring Freezes and Layoffs: So far in 2024, Q1 is seeing continued restructuring and layoffs, especially in technology and retail. Unfortunately, it is predicted that layoffs and hiring freezes are going to continue through the first half of the year. According to a recent survey, 38% of business leaders think layoffs are likely this year, and about 50% of leaders say their companies will implement a hiring freeze. However, the pent-up demand for talent will have to be released at the back end of 2024, which will create more opportunities for companies to find the right leaders.
- Increase in C-Suite Changes: Economic downturns, high levels of organizational disruption, and rapid advancement in technology have a way of shuffling executive teams. Business leaders are walking a “talent tightrope” and need to focus on retaining key people to help deliver results during uncertain times. During the first part of 2024, there have been many changes at the CEO level, which means more change in the C-Suite.
- Impact of AI & ChatGPT: CHROs that leverage and integrate AI into their strategies will win in 2024. AI will help improve the employee experience, engage the workforce, and align employees with company goals.
The CHRO role is continuously evolving, and new technology will affect how these organizations build their workforces and leadership teams. By staying current on the latest trends and developments, HR leaders will be prepared to address these challenges and opportunities for continued success in 2024 and beyond.