Just because 2023 is over doesn’t mean that the trends that shaped the year will go away. In fact, it’s quite the opposite.
The defining trends and issues that HR pros cared about in 2023 will have an impact on what’s to come in 2024.
To be prepared, we gathered some of the top trends from the ADP Research Institute (ADPRI) and its Today at Work report, which analyzes the employee lifecycle to uncover what’s working in HR and what’s not.
Here are four of the most important trends, and how they’ll continue into the new year.
ADPRI’s research found that, while promotions are a common way to climb the corporate ladder and advance your career, they can come with some hidden consequences. Without the right safeguards in place when a worker is promoted, a promotion can actually make an employee more likely to leave their job.
In fact, ADPRI’s research found that within a month after their first promotion, 29% of people had left their employer. But six months out from a promotion, that number went down, signaling that once employees are adjusted to their new role, they’re less likely to jump ship.
The research also found that risk varied based on an individual’s position. Specifically, promotions increased a manager’s risk of leaving more than it did for individual contributors.
When faced with more responsibilities and not enough support from leaders, promoted employees may leverage their promotion to find a better position. Plus, in recent years, a push for greater transparency in job ads and salary expectations make it easier for employees to find a job that fits their exact needs.
“When workers know more about what the labor market looks like, they know more about what they demand for their same job at another firm, that does increase that search behavior because your knowledge about what other people are offering, what other employers are offering, facilitates this transition,” says Nela Richardson, chief economist at ADP, who spearheads Today at Work.
How it will impact 2024: “My best guess is in a slowing labor market, you might not see the degree of promotions. But that doesn’t change the fact that workers are vulnerable when they get promotions,” Richardson said. “If your people are promoted, especially if they’re going from an individual contributor to manager, it’s important that you support that transition. Because you want to set up your promoted [people] for success.”
2. Employee motivation
ADPRI’s research found that essential factors for company success – namely motivation and commitment – rise and fall over time, and are intrinsically linked to productivity. According to ADPRI, highly productive workers are more than twice as likely to be motivated and committed to their organization than moderately productive workers. When compared with low-productivity workers, they’re nearly five times more likely to be motivated and committed.
“[Motivation] is all about trust,” says Richardson. “Do [I] trust [my] team? Do I trust that my company is going in the right direction, that I’ll be promoted and/or rewarded for the work that I do? And all of those things, those measures of trust can be compromised in a shaky background.”
2023 saw a lot of societal changes, from tech layoffs to the Hollywood strike, that impacted employee motivation and commitment. But that doesn’t mean that employers have to just sit back and watch.
“If you can measure it, you can nurture it,” says Richardson. “You don’t just have to search for [motivated workers]; you can actually do things as an employer to generate loyalty and productivity.”
And to generate loyalty and productivity, you need to build trust in all areas, including within emerging trends like AI. “People might be uncertain about the value of their work in the midst of this innovation. And so as an employer, you want your workforce to get on board with this change, you have to earn their trust that their jobs won’t be significantly altered or eliminated by helping you facilitate this transition. Their help and buy-in and adoption is key to making it successful for your company.”
How it will impact 2024: Between a contentious upcoming election season, a shaky economy and geopolitical conflict, Richardson predicts that employee motivation and commitment may rise and fall with these factors. “Uncertainty is not the best environment for productivity,” Richardson says. “My thought here is that change is now hard work. Part of your work now is learning to do your same job as things are changing all around. … That’s going to affect productivity.”
3. Student loans
After a 43-month grace period, student loan repayments resumed in October of 2023, prompting a big financial shift for many who had gotten used to the repayment pause. And, according to ADPRI research, it’s going to affect retention, and not in the way you may think.
Although researchers at ADPRI hypothesized that greater debt would make an employee more likely to stay at an organization, it actually made them more likely to leave.
“It actually affects the employment decision,” says Richardson. “People are looking for higher-paying jobs when they have a lot of debt responsibilities. Even if they like the job that they have, even if they’re motivated and productive, there’s this external force called student loan debt that keeps them looking for higher pay.”
Employees who described their debt as a “burden” were more than two times more likely to be in the process of leaving than those who have no debt.
How it will impact 2024: In the new year, employees will expect – and need – more financial resources and education as employees navigate the first full year of student loan repayments since the pandemic.
“Employers are not responsible [for financial management]. But what they can do is help workers with financial wellness, help with debt management, help provide advice or resources to manage [debt], and help them put themselves on a plan and strategy,” says Richardson. “[Debt] management can actually keep your employees feeling loyal, engaged, and motivated and productive because they now have resources that they didn’t have before.”
In addition to offering more financial resources, employers may capitalize on new provisions to the SECURE 2.0 Act in 2024 that allows employers to match an employee’s loan contributions into a 401(k) fund.
Employee stress is nothing new, but recent years have brought a lot of extra stressors for employees, from increased layoffs to sky-high increases to the cost of living.
From interest rates to student loan debt to geopolitical issues, employees are more stressed than ever. “And all that sums up to an environment that has a lot of opportunities, but a lot of risks and stresses,” says Richardson.
According to the ADPRI data, while some employees thrive on stress – those who see it as “eustress” or beneficial stress – others are overloaded by it. And most employees (51%) fall in between “thriving” on stress and being completely overloaded by it. But employees who thrive on stress are more likely to be resilient, motivated and committed – and those employees tend to be more productive, too.
How it will impact 2024: Richardson predicts a greater focus on managing talent in a sustainable way and gaining loyalty to improve those key factors like motivation and commitment.
“The only answer for managing talent [is not] giving everybody double-digit raises. … We saw a lot of that in the early days of the [COVID] recovery, and it led to the Great Resignation,” says Richardson. “So you can’t buy their loyalty; you have to earn it. And that’s through offering these resources being really focused on the people and the performance of the individuals that make up your talent base.”
Looking ahead at 2024 trends
According to Richardson, 2024 will be all about talent management and retention.
“I think the narrative now is less about who’s being hired, and how long it takes to be recovered and whether or not we see a soft landing in the labor market,” says Richardson. “And it’s going to be more about talent, where is it? And how do we nurture and grow it?”