With the threat of a global recession looming, CHROs must contend with managing the workforce, addressing the skills gap, and adapting to advanced technologies.
By Larry Basinait
While the challenge of the pandemic has largely passed, new concerns have arisen. The threat of global recession is very much on the minds of business leaders everywhere. Ongoing inflation exceeding normal standards continues to plague employers, both from an employee compensation standpoint and in delivering goods and services. Both the promise and threat of artificial intelligence (AI) dominated headlines in 2023, and its ethical use and how it will impact the workforce remain largely speculative. New technology also hastens the need for upskilling the workforce, which many organizations are not prepared to do.
In addition to these challenges, HR leaders must contend with long-standing issues: workforce planning, meeting the needs of new employee expectations, managing the skills gap, and embracing an even more strategic role. The 2023-2024 HRO Today Annual Top Concerns of CHROs© report reveals how today’s top CHROs are tackling these issues and more to create real impact in their organizations.
Key Findings
Each year brings new challenges for CHROs, especially when it comes to staffing requirements. In terms of the workforce, the greatest concern among CHROs in this year’s survey is wage inflation. Two-thirds (67%) of respondents say it’s their biggest concern, though it is down slightly from 2022.
The reduction of employee stress and mental health is the second greatest concern in this area, with 60% of respondents extremely or very concerned. Retention, which was the top concern in 2022, is rated as a major concern by 51% of respondents and a considerable drop from the prior year.
Two-thirds (67%) of respondents say wage inflation is their biggest concern.
The availability of skilled workers is also still a major concern among those surveyed but less so than in prior years.
For the first time, the survey explores the extent of concern about leader and manager effectiveness. Of those questioned, 61% are extremely or very concerned about it.
Concerns over the impact of remote work leading to a reduction in employee attachment and loyalty diminished in 2023. The cause for this may be the gradual acceptance of “a new normal” or satisfaction with the steps taken by many organizations to implement hybrid working programs.
A new challenge for 2024, 61% of CHROs are extremely or very concerned about leader and manager effectiveness.
In terms of workforce size, more than half (52%) of participants indicate the size of their workforce is close to what they had planned for the year. This is an improvement over 2022 levels, where only 41% felt their forecast was accurate. Looking ahead, today’s HR leaders continue to face great challenges, such as an uneven job market, rampant inflation that directly impacts wages, the threat of recession, and geopolitical tensions.
There has been little progress in upskilling workers despite the acknowledged need for skilled talent. Few CHROs report that they made significant progress in 2023. Just 37% report at least moderate progress. However, the need for upskilling is critical with as many as 44% of current workers requiring new skills in the next five years.
While AI adoption in HR has become more common in recent years, survey results show that it’s not yet widely used by most organizations. The most common application of technology, however, is in talent acquisition. AI is growing in popularity, and its overall use and how it is used will increase exponentially in the coming years.
Click here to view the entire report, sponsored by WilsonHCG.
