Attraction and retention remained a challenge in 2023 as organizations across industries struggled to find and keep talented workers. According to Zywave’s 2023 Attraction and Retention Employer Pulse Survey, more than 60% of respondents said attraction and retention was a top-five business challenge. However, this was a decrease from 80% of respondents in 2022. Although the competition to win over talent may ease compared to what employers have experienced since the beginning of the COVID-19 pandemic, labor markets are expected to remain competitive in 2024.

Employers should understand how the market is shifting this year while focusing on new strategies to attract and retain talent. The talent market has been historically challenging for employers since the onset of the pandemic. According to the U.S. Bureau of Labor Statistics (BLS), the total number of employee quits and job openings reached record highs in late 2021 and early 2022. Although 2023 reports show open jobs and employee quits are trending down from all-time highs, they are still averaging higher than pre-pandemic levels. This highlights the ever-changing and competitive nature of the labor market, though the market is expected to cool down.

Zywave’s survey found that the majority of employers (66%) expect attraction and retention challenges to “stay about the same” in 2024, while 15% expect them to improve. Attracting new employees is anticipated to be more difficult than retaining existing ones in 2024 as more workers decide to stay put rather than test the labor market. In summary, employers can expect the labor market to moderate—but should not expect talent challenges to go away. While the labor market isn’t likely to present the same challenge as in previous years, employers will need to stay agile and adaptive. Labor and talent trends that are expected to shape the employment market in 2024 include greater compensation, skills-based hiring, artificial intelligence in recruiting, voluntary benefits, the “Great Gloom” and Generation Z’s growing presence in the workforce.

Employer Takeaway

Recent labor reports indicate that the job market is shifting in favor of employers. In 2024, employers can expect evolving trends, such as continued demand for compensation, return-to-work mandates and the need to find workers with the right skills, to pose significant challenges. Savvy employers will continue to monitor these trends, informing their talent strategies in an evolving labor market.