A World in Flux: Hiring and Retention in a Time of Uncertainty

WERC Staff - Feb 26 2024
Published in: Global Workforce
| Updated Feb 26 2024
Global workforce trends, including the state of return to office, the four-day workweek, and the impact of artificial intelligence on the workplace.  

The new year brings with it new challenges and opportunities for the talent mobility industry. Global conflicts, supply chain disruptions, and the double-edged sword of technological advances continue to impact economies worldwide, though some countries are showing positive signs of growth.  

The U.S. labor market, for one, started the year with 353,000 jobs added in January. The average hourly wage increased 0.6% from December, the fastest monthly gain in almost two years. The unemployment rate, meanwhile, stayed at 3.7%, just above a half-century low. These numbers point to a strengthening economy, so why has the rate at which Americans are quitting jobs slowed to pre-pandemic levels? 

Americans quit 6.1 million fewer jobs in 2023 compared to the previous year, a 12% decrease according to data from the U.S. Department of Labor. This marks a stark reversal from the years just after the pandemic emerged, when resignations surged and companies faced labor shortages. During the height of the pandemic, employers went above and beyond to attract and retain talent, offering big raises, signing bonuses, and perks to boost employee wellness.

More recently, the media has been reporting mass layoffs at major companies, with predictions of more to come, plus smaller pay increases and hiring slowdowns in certain sectors. Workers may be growing less confident in finding a better job elsewhere. Employers, as a result, may be less likely to feel pressure to raise wages to keep them or offer benefits to attract and retain them.

What Corporate Chiefs Are Saying About RTO

Will full-time return to office (RTO) mandates increase in 2024? Not likely, at least according to a handful of studies. The Conference Board surveyed more than 1,200 executives across the United States, Latin America, Japan, and Europe. Conducted in October and November 2023, they found that only 4% of U.S. CEOs said they’ll prioritize bringing workers back to the office full time. Globally, 4% said the same. Meanwhile, a survey of chief financial officers in the United States, Canada, and Mexico, conducted by Deloitte in November 2023, found that 65% of respondents expect their company to offer a hybrid arrangement this year.

Research by virtual coaching company BetterUp found that RTO policies can be a major disruption to workers’ routines, and expensive to boot. A survey of 1,400 full-time U.S. employees who were required to return found they had higher turnover intentions. They also had lower trust in their organization, engagement, and productivity levels. The average employee returning to the office spent $561 per month on transportation, additional child and pet care, and domestic assistance, BetterUp found, comparable to the average two-person household’s grocery bill for an entire month.

As more workers are asked to return to physical office spaces, it’s possible that an increased need for mobility will follow—in particular if such requirements are well-received. To prevent employee discontent, employers should implement strategies that maximize talent and business outcomes. Gartner has identified best practices to consider, including motivating employees to return to the office—rather than requiring it—by designing office space and hybrid policies to make employees feel empowered and connected. 

Gartner also found that companies mandating a minimum number of in-office days per year rather than per week achieve greater employee performance. Enabling employees to shape the RTO policy, meanwhile, displays that their input is valued. Offering transparency about the policies and their reasoning has positive impacts on engagement and retention.

The 4-Day Workweek Gains Steam

While the hybrid work schedule looks like a mainstay for hiring and retention in 2024, others may wonder whether the four-day workweek will emerge as another. The largest-ever trial of a four-day workweek, which involved 2,900 employees from 61 firms in the United Kingdom, took place between June and December of 2022. Now, more countries are considering it.

In February 2024, 45 companies and organizations in Germany will introduce a four-day workweek for half a year, under an initiative led by the consulting firm Intraprenör in collaboration with the nonprofit organization 4 Day Week Global, which helped coordinate the U.K. trial. The Dominican Republic also just announced that it is set to start a six-month pilot program for a four-day workweek, the first such nationwide effort in Latin America and the Caribbean.

More Countries Embrace the Digital Nomad

The digital nomad trend is likely to continue as well, as countries such as Japan, South Korea, and Spain look to capitalize on long-distance workers to boost their economies. 

VisaGuide.World, a free online information guide to worldwide visas, created the Digital Nomad Visa Index, which ranks countries based on factors such as active visa availability, taxation policies and tax-free length, income requirements for visa applications, and cost of living. Spain was ranked as the top overall country for digital nomads this year, with a score of 4.5 out of 5. Argentina ranked as the second-best country, with Romania, the UAE, and Croatia filling out the top five.

As this trend gains momentum, companies hiring digital nomads must be aware of their compliance duties. One of the first compliance decisions when hiring globally is to determine whether the worker is a contractor or an employee. Another key aspect is taxation. There are also issues related to social security and pensions payments for staff that keep a home in a different jurisdiction from where they are employed.

Technology-related issues require addressing as well. With more workers using their personal technology for work, companies must understand the laws and regulations that apply to their jurisdiction when it comes to what and how they can track and store personal employee data. 

Employers need to understand the intellectual property, privacy, and data security regulations in each jurisdiction where they hire and work. “It is crucial that you protect yourself contractually with strong contracts (for both employees and contractors) that lock down your partnership agreements, confidentiality, non-competes, and other terms vital to safeguarding your company’s intellectual assets,” Miranda Zolot, general counsel at Oyster HR, writes.

What’s Different This Year?

The biggest trend to watch may be artificial intelligence (AI). A recent analysis by the International Monetary Fund (IMF) estimated that almost 40% of global employment is exposed to AI. 

“Historically, automation and information technology have tended to affect routine tasks, but one of the things that sets AI apart is its ability to impact high-skilled jobs,” Kristalina Georgieva writes in an IMF Blog post. “As a result, advanced economies face greater risks from AI—but also more opportunities to leverage its benefits—compared with emerging market and developing economies.” In advanced economies, about 60% of jobs may be impacted by AI, the IMF analysis estimated.

A new report from the nonprofit Burning Glass Institute and the Society for Human Resource Management (SHRM) confirms these numbers, suggesting that generative AI (GenAI) will have its biggest impact on white-collar workers with high-paying jobs in industries like banking and tech. While not saying outright that the technology will do away with large numbers of jobs, the report stresses that workers need to prepare for a future when AI is king. The report highlights the need for increased training to prepare workers to adapt to a fast-arriving technology, said SHRM CEO Johnny C. Taylor Jr.

GenAI will also impact the mobility industry directly. It could “free up mobility professionals to focus on more strategic tasks like developing and implementing innovative mobility programs and providing critical trends and insights for business decisions,” according to Deloitte, which engaged with talent mobility leaders on the topic of GenAI during the WERC Global Workforce Symposium. The engagement included in-person Inspiration Labs comprised of representatives from over 40 different corporations, who brainstormed how GenAI will affect the industry.

Many ideas were voiced, falling into three main categories. GenAI “can be used to create personalized and engaging experiences for employees at every stage of the mobility process, from pre-deployment to ongoing assessments and metrics,” Deloitte suggested. It can also automate “many of the time-consuming and repetitive tasks associated with global talent mobility, including applications, document processing, and compliance tracking.”

Mobility Expands Despite the Challenges

Despite the challenges posed by political and economic factors, RTO, and AI, global hiring looks strong, according to HR company Deel’s State of Global Hiring Report, which examined data from global worker contracts throughout 2023 and found reasons to be optimistic in terms of global, domestic, and remote hiring, all of which are on the rise. The fastest growing hiring regions last year were Europe, the Middle East and Africa, along with the Asia-Pacific region, followed by North America and Latin America. Most regions saw salaries increase or stay flat on average, while involuntary terminations, although up in the U.S., were on their way down globally by the end of the year.

Samuel Dahan, chair of Deel Lab, summed up 2024’s hiring landscape, noting that the optimism carries with it a caveat: the state of economies around the globe. “Current market dynamics reveal a paradox, he said. “Despite some indicators of global economic slowdown, we are entering 2024 with cautious optimism, as hiring trends remain strong.”

The talent mobility industry will continue to adapt to an ever-changing landscape. Job opportunities abound, and more markets are welcoming global workers. While there are many uncertainties, there is much room for optimism that hiring and retention will again be a top priority for companies around the world.