2023 saw some big challenges for business leaders, HR teams and organisations alike. Our prediction is that 2024 will be even more stretching, based on three factors:
- Disruptions will continue to come thick and fast as the business world becomes increasingly volatile
- Companies will have to face even more frequent and fundamental organisational transformations impacting their people (driven by shifts in the labour market, hybrid working, reskilling and the continuing evolution of the employee experience (EX))
- Changes to the way we work – mainly driven by technology – will accelerate and responses to this will be extremely varied at an organisational and individual level
So, based on our data, analytics and insights at ENGAGE, which emerging trends do we think are likely to dominate in 2024? Here are the hot topics we expect to be talking about:
1. Business leaders pushing for greater ROE (return-on-engagement)
The C-Suite will begin to push back on reported engagement levels where these don’t align with wider performance. They will seek a more comprehensive measure with demonstrable impact on the bottom line.
So they will question what scores of 90% plus on engagement surveys are really telling them and demand more discerning metrics – a more “360” view of employee engagement. Simply asking views in surveys will no longer cut it. Tougher metrics that incorporate how engaged people’s leaders, managers, peers, direct reports and customers perceive them to be – as well as what they say about themselves – will become an emerging norm.
2. Employee experience becoming more business-focused and strategic
EX has become a tactical HR activity, focused on the minutiae of processes and HR service provision. Business leaders are increasingly frustrated with the lack of value this is adding to the organisation.
Our private conversations with corporate leaders suggest there will be increased pressure on HR to up its game and
broaden its perspective on the EX, needing to “zoom out” and assess how the broader experience impacts engagement and business results throughout the employee lifecycle. There will be a better balance in efforts to address the tactical “pain points” (the ease of “getting things done”) and the more impactful aspects of the employee experience such as purpose, leadership and direction, culture, behaviours, inclusion and belonging, progression and opportunity.
3. The great resignation making way for a focus on top talent retention
The labour market has shifted dramatically in the last 12 months and will continue to do so in 2024. At the start of 2023, businesses were still being held to ransom by the “great resignation” (or at least being told they should be). In 2024, we predict that there will be a big shift away from a focus on retention at all costs to a forensic targeting of top talent retention.
Far too much activity has been broad-brush: what will help our people to stay? We think business leaders will start to question more – who is staying and why? Do you want disengaged and / or under-performing people to stay with you? We expect to see a more focused (and smarter) approach to identifying the drivers of retention for top performers – segmenting data to help you keep your best.
4. CEOs honing-in on top team performance and effectiveness
For years, CEOs have spent more budget on individual coaching and development for their ExCo members while using smaller investments on occasional (but often hugely ineffectual) “teambuilding offsites”. In 2023, we have seen a rise in CEOs focusing on top team effectiveness and coaching and we expect this trend to accelerate into 2024.
Don’t get us wrong: this won’t mean more classic “offsite” outdoor activities, tree-climbing and raft building. (In fact 60% of people who have taken part in “teambuilding” found the experience embarrassing or cringe-worthy [YouGov, 2021]). All of our work with clients’ senior leadership teams suggests that team performance is only improved when they work hard together in the room on issues such as defining a clear team purpose, building trust, agreeing ways of working, learning how to handle conflict and staying clear on agreed priorities.
Many senior teams currently operate as a group of functional leaders rather than a cohesive executive team. With only c.12% of top teams rated as high performing, we expect a big rise in team-based coaching in the year to come, especially for those organisations going through major transformations, merger and acquisition and leadership team changes.
5. Culture being defined as a strategic business tool
The last few years have really tested company culture. Some organisations have been pleasantly surprised by the strength of their organisational DNA – even during the toughest of times. Others have had a wake-up call and realised the fragility of superficial branding and bricks-and-mortar.
Regardless of what has been learnt at an enterprise level about the role of current culture, we will see a much less passive approach to company culture in 2024. Business leaders have run out of patience with the cultural limbo of the past few years – watch and wait has run its course. They realise there is real business value to be gained from the right culture but this requires a shift away from words and a focus on behaviours – at every level of the organisation.
The opportunity to take a more intentional, scientific approach to defining and activating the right behaviours is a no-brainer for those who have seen the potential gain (or loss). There will be increased use of smarter diagnostic and predictive analytics to identify, objectively, the behaviours that will deliver business performance. In turn, we will see the more forward thinking business leaders champion a better balance of longer-term behaviour-based performance management (over shorter-term results-based reward).
In 2024, we also expect smarter organisations to adopt a more proactive, and data-driven, approach towards segmentation and customisation. The year is likely to present business leaders with a number of quite polarising challenges. Understanding the drivers and affecting the right outcomes will require the smart, and transparent, use of data and insight. While there are many we could site here, we have picked-out two to illustrate the point:
6. The return-to-office (RTO) debate coming to a head
In the great RTO debate, 2023 saw many companies still trying to appease what employees “want” while balancing this with what the business “needs”. In 2024 we believe leaders will push harder on the business need, encouraging a greater balance between individual preferences and collective interest.
We are already seeing organisations privately analysing smarter data on trends around office attendance, productivity levels and resultant performance. The findings are stark.
On the one hand, more flexibility creates opportunities for organisations to access talent pools they wouldn’t otherwise do so. On the other hand, some employees just enjoy working from somewhere else other than the office. There is a clear need for objective and integrated data.
Some feel the balance between individual “wants” and the needs of customers / clients, colleagues and the business have become out of kilter. Others believe there is still a genuine threat to talent retention and the impact on business performance. Smarter leaders will rely on transparent, data-driven, decision-making – citing the need for collaboration and learning with colleagues, the need to be present for customers / clients and the need to drive an objective measure of productivity. Even smarter leaders will see that this is not just a matter of physical connection but a classic example of where genuinely engaged employees can be relied upon to create the right balance.
7. The impact of technology on ways of working polarising the workforce
The potential of a radical overhaul in the way certain aspects of our roles are delivered is being perceived in different ways – some employees see it as a huge opportunity, others as a significant threat.
In 2024, we expect to see a polarisation in employee responses to these potential, technologically-driven, efficiencies based on their current levels of engagement. One group (the already highly engaged) are, according to our private client data, more likely to see AI as a way of reducing administrative and repetitive tasks, thereby freeing up time for them to do more value-adding work. By contrast, those employees who are less engaged are already likely to view AI as a way to reduce their own workloads, with resultant impacts on productivity for this segment. We expect organisations in 2024 to take a smarter analytical approach to this issue: using a mix of engagement analytics and productivity data to assess how to optimise workforce applications of AI and smarter employee segmentation to understand how the barriers to adoption and optimisation differ across the workforce.
So, 2024 will see some tough challenges, but we predict some smart and innovative responses from organisations, leaders and HR alike. This will be driven by business leaders who have woken up to the potential value of a more strategic understanding of engagement. To succeed, companies will need to take brave decisions, use much smarter analytics and have a clear view on their people strategy to enhance performance. More to come on each of these trends in our blogs as 2024 progresses.