The new year is a great time to dust off the crystal ball and CNN polled workplace consultants in early January to see what trends and changes they envision for 2024.
“As 2024 begins, we are all wondering what the new year has in store for the world of work. Career, Pay, Benefits, flexible work arrangements, and more,” said Steve Boese, host of The Workplace Minute, who devoted a podcast to delving into what CNN found.
The three big takeaways:
- Employee Compensation Shifts: Paychecks should continue to grow, equal to inflation or even greater. And those gaining promotion in 2024 may see pay hikes just under double digits.
- Employee Benefits Expansions: Benefits can be just as important for employee retention as pay and employee benefits should expand in 2024 with an emphasis on family leave, financial wellness, workday flexibility, and more. A special benefit that will garner its own attention (good and bad?): the 4-day workweek.
- Strong Labor Market: You don’t need to tell most employers that the labor market is still quite strong with more openings than job seekers. Those without college degrees or a resume with years of experience may find career opportunities not possible in years past as many companies look towards skill-based hiring for newly created job roles.
Of course, crystal balls can be wrong as CNN noted in another article that prospects for U.S. businesses and their employees fared much better over the past 12 months than was predicted a year ago.
“Around this time last year, many experts said it was a sure bet that the Federal Reserve’s inflation-fighting rate-hiking campaign would result in job losses mounting and send the economy into a recession,” wrote CNN’s Alicia Wallace. “Instead, the labor market’s continued strength helped fuel consumer spending and economic growth during the past 12 months. The job market has indeed cooled down but did not derail despite 11 Fed hikes that brought the benchmark interest rate 5 percentage points higher in under two years’ time.”
Paydays Continue to Grow for Employees
Employees can expect a spring in their step come payday in 2024 as employers continue to offer raises that meet or exceed inflation.
“A salary budget survey taken in December by workplace advisory firm WTW found that US employers are planning for an average salary increase of 4 percent in 2024. That is less than the 4.4% jump they offered in 2023 but above the average 3.1 percent increase seen in 2021 and earlier years,” reported CNN.
Not only inflation, but the tight labor market plays into employee pay rising in 2024.
“Tight labor markets, inflationary pressures, and employee retention concerns have fueled salary increases to rates not seen in nearly two decades,” said WTW. “In 2023, 96 percent of organizations increased salaries (compared to 63% in 2020) as overall salary increase budgets and total compensation spend reached new heights. And though increases are expected to be down in 2024, they look to remain high, according to data from WTW’s December 2023 Salary Budget Planning Report.
WTW predicts that labor markets and economic conditions will remain on compensation and HR professionals’ watch lists in 2024, and professionals will need to be flexible enough to act as needed.
Meanwhile, Mercer says that promotion practices will play a prominent role in raising a select percentage of employees.
“Although not much has changed recently in promotion practices, it warrants consideration because promotions and career development play such a significant role in the employee experience and total rewards strategy,” said Mercer. “Employers on average are planning to promote a little less than 10% of their workforce in 2024. On average, employees can expect to see a 9.2% pay increase for a one-level promotion.”
And where will the promotion bucks come from? Mercer says that half of employers are managing promotions through their existing salary and wages budget, or some other expense process. Just under 1 in 4 companies have a standalone promotion budget and are planning an average of 1.1% to cover the increase in salaries due to promotions.
Benefits Beef Up: Expanded Leave, Financial Help and More
CNN says that “many employers are expected to expand benefit offerings to better support their employees’ health, family lives and finances.”
Trending for 2024 in benefits include:
- Paid bereavement leave that applies not just to an immediate family member’s death (spouse, child, or parent for example) but to extended family members or even close friends.
- Paid bereavement extended to employees after a pregnancy loss, such as a miscarriage or stillbirth.
- Benefits targeted at women going through menopause such as time off as needed, flexible work options, and control over their work environment.
- Financial wellness benefits will continue to expand such as employee discounts, basic money management tools, tuition assistance, investing and financial planning education, financial and debt counseling services, and student loan assistance.
- New benefits resulting from the Secure Act and Secure Act 2.0:
- Employers can offer matching contributions to employees who are making student loan payments and put that match into the employee’s 401(k) account, allowing employees to save for retirement even if they aren’t able to currently make significant contributions because of student loan debt.
- A provision that lets employees take out up to $1,000 a year (penalty-free) from their 401(k) for any type of emergency with no explanation required.
- Employers can create an emergency fund for an employee within their 401(k) and let employees make direct contributions to that fund (up to $2,500). Employers would match contributions, but their contributions would go into the retirement portion of the 401(k).
- Part-time workers who have worked at least 500 hours over a 12-month period for three consecutive years will be eligible to participate in their employer’s 401(k) plan in 2024.
TGIT??? The 4-Day Workweek May Become a Reality for Some
A controversial topic, the 4-day workweek will gain some momentum in 2024 say the workplace consultants.
“The idea of a four-day workweek has been discussed for years. But 2024 may be the year some employers across industries act on it — or at least take incremental steps toward making it a reality, according to Emily Rose McRae, who leads the future of work practice at consulting and research firm Gartner Inc., which will release its workplace predictions for 2024 later this week,” reports CNN.
McRae told CNN that research shows a 4-day workweek can boost productivity if it leads to more rest, but on the other hand, there is concern that a 4-day workweek can have the opposite effect and lead to burnout as employees attempt to accomplish in four days what they have been doing in five days.
A survey by Gallup found that 77 percent of U.S. workers think a 4-day, 40-hour workweek would have a positive impact with 46 percent saying it would be extremely positive and 31 percent saying somewhat positive.
CNN reported: “While studies of four-day workweek experiments in the United States and Europe have found generally positive results in terms of employee productivity and well-being, it’s not necessarily a positive for everyone in every situation. As with hybrid work, much will depend both on how your four days are scheduled, where you work, and your individual work style.”
And as for that hybrid work, it appears it’s here to stay for many employees with those able to work hybrid schedules working from home 30 percent of the week – up from 7 percent pre-pandemic, according to CNN.
Strong Labor Market and Skills-Based Hiring
The strong labor market continues to be a trending workplace topic for yet another year.
One of the big consequences may be candidates without college degrees or vast work experience landing on hiring radars.
“Apart from the general health of the job market, which still has more openings than job seekers, many more career opportunities may open up this year for those without a college degree or even years of experience for a given role. That’s due to an anticipated rise in skills-based hiring and an increasing use of artificial intelligence to assess competencies and potential among job candidates,” reported CNN.
Skills-based hiring could be key because Anthony Reynolds, CEO at HireVue, told CNN that no matter how human-centric a job role may be, most employees now need to have a base level of technical skills.
This could lead to a sea change in how companies view college degrees.
“College degrees are the top requirement listed in yesterday’s job descriptions. In response to the tight labor market and declining undergraduate graduation rates, organizations are shredding the “paper ceiling” and welcoming workers with alternative credentials,” said Gartner.
In addition, Gartner says that “a typical career paths are going mainstream with rising retirement ages, mid-career breaks, shifts across industries, and embracing contingent work and other nontraditional employment models. In light of this, the assumptions and heuristics that underpin many organizations’ talent management strategies will prove a growing barrier to acquisition and retention.”
