The UK HR market is facing a number of challenges in 2024, as the demand for talent exceeds the supply, the competition for skilled candidates intensifies, and the expectations of employees and employers change. In this article, we will explore some of the key issues HR professionals need to address to attract, retain, and develop the best talent for their organisations.
Retention: The Top Priority for HR
According to WorkBuzz’s State of Employee Engagement Report 2023/241, employee retention is the greatest priority for HR leaders over the next 12 months, moving up the list from third place in last year’s report. The report, which is based on insights from over 400 UK HR professionals, reveals that 36% of HR professionals state that retention is their biggest priority for the foreseeable future, followed by employee well-being (28%) and recruitment (26%).
The report also shows that retention is getting more difficult or not changing for 89% of HR professionals, with only 11% saying that retention is getting easier. The main reasons for this are the high inflation, the public sector strikes, and the lure of higher pay and benefits from other employers. The report suggests that organisations need to take a long-term perspective to nurture their own talent and create cultures where people choose to stay.
Recruitment: The Skills Shortage and the Competitive Market
Another major challenge for HR in 2024 is recruitment, especially in the face of skills shortages and limited hiring budgets. A survey by CV-Library2 revealed that 86% of organisations in the UK have found hiring ‘quite’ or ‘very’ competitive in 2023, and 46% have lost out on hiring new talent in the last six months as they ‘can’t compete on salary and benefits’. The survey also found that 40% of HR professionals expect the ‘lack of skilled candidates available’ to be their greatest 2024 recruitment challenge.
The skills shortage is not a new problem, but it has been exacerbated by the pandemic, Brexit, and the ageing population. According to McKinsey, the UK will face a shortfall of 3 million workers by 2030, with sectors such as health care, education, and engineering being the most affected. The competition for talent will remain fierce in the UK despite the economic uncertainty, and organisations will need to adopt innovative strategies to attract and retain the best candidates.
HR Technology: The Opportunity and the Challenge
HR technology is another area that HR leaders need to focus on in 2024, as it offers both opportunities and challenges for the function. According to Gartner’s annual HR Priorities survey, HR technology is the third most important priority for HR leaders in 2024, up from sixth place in last year’s survey. The survey, which is based on responses from more than 800 HR leaders globally, shows that HR leaders hope to transform HR’s performance through technology, such as artificial intelligence (AI), generative AI, and productivity tools.
However, HR technology also poses some risks and ethical dilemmas for HR, such as governance, workforce readiness, data privacy, and responsible AI. HR leaders need to have an evaluation framework to assess which HR tech to adopt and ask key questions about the benefits, the costs, the implications, and the alternatives. HR leaders also need to ensure that HR technology is aligned with the organisation’s culture, values, and goals and that it enhances the employee experience and engagement.
The HR market in the UK is facing a number of challenges in 2024, but also some opportunities to make a difference. HR leaders need to prioritise retention, recruitment, and HR technology, and adopt a strategic, proactive, and innovative approach to address the issues. HR leaders also need to collaborate with other functions, stakeholders, and external partners, and leverage the data, insights, and best practices available to them. By doing so, HR leaders can help their organisations overcome challenges and achieve their objectives and vision.
Amanda Underhill is a Business Manager here at Ashley Kate, focusing on Senior HR recruitment across London and the South. Before joining Ashley Kate HR in 2010, she spent a number of years operating as a Manager in large corporate recruitment companies. Over the last 13 years, she has held a number of different roles from consultant, to heading up the South function, through to her current role. Alongside recruitment, She also manages our HR Director Boardroom and Employment Law events as well as compiling our annual salary guides, newsletters and CSR initiatives.