As budget cuts, layoffs, and organizational changes have dramatically changed the HR landscape, we at Elevate Leadership wanted to better understand the sentiment of those in the industry today. To do this, we surveyed over 2,900 HR leaders and C-Suite executives across every major industry to hear their thoughts on the current state of the market. The responses from this survey helped form our first ever Elevate HR Industry Trends Report.
In this report, we delve deeper into trends affecting teams today, and explore hot topics such as employee wellness, DE&I, and the rise of AI in HR. Read on to learn more about the market.
Download the full PDF report here:
Current Challenges for HR Teams
As funding has dried up in many sectors, particularly tech, companies have had to change the way they operate to focus on profitability. This has noticeably shifted attitudes within HR teams across every major industry.
When asked about issues currently facing their team, 62% of survey respondents stated that a “limited budget” was their biggest challenge currently. Small and medium sized companies were even more affected, with 75% and 74% of respondents, respectively.
Ripple effects from 2023 layoffs
Layoffs over the past two years have also created a ripple effect downstream. The second and third most common challenges in our survey were “navigating organizational change” at 57% of respondents, and “limited headcount” to cover work at 55%. Both of these issues tie into the reductions in workforce that plagued much of 2023.
Lack of Executive Buy In
Another challenge faced was a "lack of executive buy-in”, cited by over 21% of participants. One explanation for this relates to the budget challenges noted above. In an environment where money is tight, teams have to be better at pitching executives on their initiatives. Otherwise, there's a risk that their funding might be reallocated to other areas. It can be frustrating for employees to feel that their leadership isn’t listening to their needs, or that funding appears to be given higher priority elsewhere.
The Rise of AI in HR
AI has become mainstream in the past year, but has it truly been adopted within the HR industry? When asked about plans to use AI in 2024, over 70% of respondents stated that their teams were using, or planned to use, AI this year. Smaller companies, given resource constraints or a more agile approach, were even more reliant, with over 86% of those working for small companies saying that they planned to use it in some capacity this year.
The most common use cases for AI in HR teams were: talent acquisition at 40% of respondents, performance management at 36%, and employee training at 25%.
Employee Engagement & Well-being
Doing more with less
Participants were asked to identify the most significant factor impacting employee engagement currently. The top responses included "Lack of resources" at 19%, and both "Burnout" and "Leadership" at 17%.
All three can be attributed to recent layoffs seen last year. Employees are currently overextended, with many being given tasks outside of their normal duties. This has led to burnout and issues with leadership’s decisions, especially when no future hiring plans are in place.
Those at larger companies were more inclined to call out leadership. In fact, 21% of those working at enterprise/large workplaces noted that their leadership was affecting employee engagement, versus only 14% of those from small companies.
Communication is key in this environment
One answer for this trend is how decisions are communicated. Smaller workplaces tend to have better downward communication from leadership to team members, simply by virtue of size. Larger companies, on the other hand, suffer from layers of management that make downward communication more difficult. With recent shakeups, such as layoffs and budget cuts, management has likely not communicated their reasoning downward properly to employees.
Priorities for 2024 & Beyond
Employee retention, goals, and restructuring are top of mind
Our survey also asked which initiatives leadership teams were planning to prioritize this year. At almost 60% of respondents, the most common priority was “Leadership Development Programs”. This was even greater at larger companies, with 71% of those from large/enterprise companies. “Organizational Design” and “Succession Planning” were the next most common answers, at 49% and 47% of respondents, respectively.
These tie into recent workforce reductions and how they’ve affected remaining teams. In many cases, employees without managerial experience are being promoted, while existing managers have been assigned even greater responsibility. Leadership training helps fill these knowledge gaps. HR teams themselves are also resource constrained, making outsourced leadership training more attractive than building internal content or programming.
Succession planning
Another common priority in our survey was “succession planning” at 47% of those polled. This makes sense within the context of reduced headcount. It’s cheaper and more effective to home-grow talent in this environment, rather than hire an expensive outsider at the top salary band. New hires may also lack institutional knowledge and not mesh with company culture. When teams are strapped for resources, the risk of these issues is much higher compared to promoting someone from within.
DE&I is still top of mind
Despite the recent discourse surrounding DE&I, 28% of those polled said that their leadership team is planning to prioritize DE&I programs this year.
Methodology
The Elevate HR Industry Trends Report is based on responses collected from a rolling survey sent to 2,956 HR leaders and C-Suite executives beginning on December 14, 2023. Respondents worked in a variety of HR backgrounds, anywhere from early career generalists to VP/Chief People Officer. All respondents were based in the United States or Canada.
Those surveyed worked across major industries including technology, professional services, and healthcare. A breakdown of respondents by company size and primary industry are seen below:
Breakdown of respondents by company size:
Small (1-50 employees) - 30%
Medium (51-500 employees) - 41%
Large & Enterprise (500+ employees) - 29%
