HR is navigating a dynamic era of transformation at a pace that shows no signs of stopping. The pandemic’s impact on the global supply chain was closely followed by the social and economic consequences of the conflict in Ukraine. As a result, countries across the globe have seen record inflation, reaching 3% in the U.S., 7.9% in the U.K., and 116% in Argentina, according to Cielo’s Innovation in flux and the future of HR report.
This wave of economic uncertainty has had an impact on the job market, with the number of job ads in the U.K. dropping by 19% over the last year. The U.S. has seen a similar drop (17%). Still, job advertising levels remain higher than pre-pandemic levels in major geographies. In many of these key geographies, voluntary turnover remains high.
Data from the U.S. and the U.K. show that the Great Resignation only further exacerbated hiring demand and activity. After peaking in November 2021, the voluntary turnover rate in the U.S. fell back close to pre-pandemic levels in April 2023 (2.4% versus 2.3% in early 2020). In the U.K., where resignations are documented by job-to-job changes, the trends are similar. The number of voluntary job moves rose sharply in 2021 and remained steady before rising again in the second quarter of 2022.
For those who leave jobs without immediately finding alternative work, run rates reached 4% by the end of June 2023, with rates noticeably higher in Northern and Eastern Europe. Change rates remain significantly lower in the APAC region, the report finds.
There is significantly more job change activity globally among entry-level managers (11.2%) and experienced managers (13.2%). Job change run rates in healthcare and advanced manufacturing were just over 5% at the end of June, with higher run rates seen in financial and professional services (8.4%), life sciences (7.6%), and technology and media (8%).
The report finds that the cost-of-living crisis is driving the search for higher-paying roles. High inflation has pushed employees and job seekers to demand more pay transparency, with candidates more likely to apply for a job that discloses a salary range (82%) and more likely to ignore job listings that fail to disclose salary ranges (62%).
The search for more disposable income is also leading people to work two jobs or find side hustles. Nearly half (46%) of Gen Z and 37% of millennial workers have either a part-time or full-time job in addition to their primary job, according to a 2023 Deloitte survey.
Cielo’s survey also includes insights from HR professionals who have overcome times of turbulence. The leaders laid out 11 observations about how the HR industry has evolved to withstand economic turmoil and uncertainty. These include the following.
- Outside enterprise level organizations, very little systemic change in talent acquisition happened because of the 2008 global financial crisis.
- HR and talent acquisition leaders arrived at the executive table during the pandemic, taking centerstage to deliver on business needs and objectives – many were invited to stay there.
- The pandemic transformed the way retained HR employees think about recruiting practices. And their achievements during this time have influenced the mindset of the wider business.
- Companies who displaced their talent acquisition team during the pandemic likely rebuilt recruiting functions that are less streamlined, agile, and technologically advanced – and many have missed the opportunity to seize the benefits of this shift.
- Agility – fueled by dissolving legacy siloes (both within and across functions) – was core to HR’s transformative change during the pandemic and has become its invaluable legacy.
- Perspectives on the current level of economic uncertainty vary by industry, organizational type and geography. Most believe, however, that they are already in some form of “next major event.”
- Opportunism, the need for business transformation, and risk-driven “bring it back home” are driving talent shortages despite slowing demand.
- Business resource planning will increasingly consider whether to invest in AI technology or people. Talent acquisition will increasingly inform these decisions, morphing into an advisory and acquisition function.
- The shift to “AI-powered talent partner” will require recruiters and other HR professionals to transform their skill sets.
- Talent acquisition transformation will be more successful when an organization’s also undergoing an HR transformation.
- There’s a widening juxtaposition between the positive hiring experience and the negative dismissal experience some employees face, which is damaging and unsustainable.