Organizations are facing a number of macro challenges, such as economic uncertainty, geopolitical conflicts and rapid technological advancements, particularly in artificial intelligence and automation. Employees’ expectations are shifting, and companies continue to feel pressure from unionization/labor activity.
Meanwhile, the labor market remains fragmented, grappling with skill demand-supply mismatches and demographic shifts. Labor costs remain a key focus area for businesses going into 2024. Salary budgets continue to be above norms compared to the past two decades and global healthcare cost increases hit a historic high of 10.7% in 2023, with similar projections for 2024.
In light of these market challenges, total rewards leaders are prioritizing five key areas in 2024.
Lean into the change
They say, “With change comes opportunity” and the current environment is certainly no different in this regard. Total rewards leaders will seek to capitalize on change in 2024 in various ways. AI will become more prominent in total rewards discussions as new technologies are adopted to improve employee and business outcomes. Leaders will seek cost efficiency by eliminating underutilized total rewards programs while simultaneously addressing employee wellbeing, financial resilience, the governance of transparency and reimagining their career ecosystem.
There's an upside for those who lean into the wave of change. Organizations that adapt quickly will gain a competitive advantage in attracting and keeping top talent, fostering a more productive and engaged workforce and optimizing labor costs to create value for their business, effectively turning new challenges into new opportunities.
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