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If we have learned anything from the past few chaotic years in the working world, we have learned that change is a constant. Learning how to adapt and even anticipate the next change is paramount to succeeding in HR.
As you figure out how to navigate the new world of work, it is time to look ahead to 2024. How can you best address your employees’ concerns?
Here at Mercer, we think about these questions every year. We have found the best resource to answer these questions is your employees. Our Inside Employees’ Minds study uncovers the most pressing needs for employees in the US and Canada.
Taking that intel, combined with the information we collect from employers and the insight from our broad experience with clients, we can identify what the top priorities for HR in 2024 should be and how to address them.
Let’s take a look!
In the Mercer 2023-2024 Inside Employees’ Minds study, we narrowed down 5 key areas where employers should focus for the coming year.
Finances remain the number one concern of employees overall, year over year. Financial pressures have eased slightly as inflation has come down and people have readjusted their lifestyles — with higher income employees recovering more quickly. But employees are by no means out of the woods. About 72% say that high inflation and market volatility have significantly increased their financial stress, down just slightly from 75% in 2022.
Concerns over short-term financial security, such as covering monthly expenses, remain the top concern of all employees, though concerns have declined from last year’s peak. Long-term financial security, focused on the ability to retire, is a close second. Concerns about personal debt have risen steadily since 2021. The Federal Reserve Bank of New York says credit card debt has been the primary driver of debt increases in the last few years.
The financial well-being of employees is also a growing concern for many businesses. In the 2023 Employee Benefits Research Institute Financial Well-Being Report, 39% of employers said they were concerned about their employees’ financial well-being. This was an increase of 10% over 2022.
To combat these financial concerns, businesses are offering more financial tools. Some of the top resources include:
One major area of financial impact for employers is in the healthcare realm. Healthcare costs can be a significant part of employees’ salary deductions. To combat this, employers can help employees keep more of their paychecks by using salary-based contributions, offering medical plans with no/low deductible, or offering larger HSA contributions to low-income workers.
Concerns about well-being continue to top the list for employees. Workload and life balance remain the top concern for employees outside of short- and long-term financial security.
Despite significant investment by employers in mental health benefits, and some relief from pressures such as inflation and labor shortages, employees again ranked mental health among their top 5 concerns in this year’s survey. Among young employees, LGBTQ+, Black women, people with disabilities, and the lowest earners, mental health concerns were more pronounced.
Employees most often point to changes in work practices as the type of support that would most benefit their mental health. These employees want their employers to offer more flexibility and sustainability.
The most popular benefits or actions in the study include:
While the overall feelings about work have improved dramatically in the last year — 3 in 4 employees report feeling valued, empowered, and connected, on a typical day at work — there are still significant pain points, including feeling overwhelmed and frustrated. These negative feelings are most present in lower income workers.
To address these wellness challenges and improve the employee experience, employers should consider offering their employees more flexibility when possible. This could mean a 4-day workweek or a hybrid work schedule. Employers can also give their employees more grace when it comes to needing time off to care for family members, attend doctors' appointments, participate in family activities, or deal with other personal issues.
Pay continues to be the top reason employees are attracted to the organization — and the top reason they stay. The good news for employers is that satisfaction with pay this year has rebounded after last year’s sharp decline. Cooling inflation and higher wage increases have boosted pay satisfaction to 69%, up from 61% in 2022. However, pay satisfaction remains low for lower income employees, at 54%.
One driving factor in the working world today is pay transparency, or sharing the salary range of a job. This has been pushed by various local and state legislative actions along with a push by the online job posting site Indeed. While some businesses are only sharing the information they are required to by law, others are going further and sharing pay ranges internally and externally in a more standardized way.
Pay transparency is crucial to attracting new talent, as nearly half of employees say they are unlikely to apply for a job if compensation information is not available in the job posting. This transparency can also help current employees. When employees feel they are paid fairly, they are more likely to be engaged and committed to their jobs.
In addition to pay transparency, businesses should consider career transparency. This would offer employees a basic outline of how they can advance in their careers and earn more pay.
With the explosion of generative artificial intelligence (GenAI) in 2023, nearly all employers are looking for ways to increase the productivity and efficiency of their workforce with GenAI. However, few employers feel prepared to succeed in the human-machine teaming era, as only 11% of North American employers say they are at least moderately prepared.
While some feel the existential dread of having their job be replaced by AI technology, the trust strength of AI is augmenting — rather than replacing — employees. Overall, employees are more optimistic than pessimistic about new technologies. Around 51% of employees say that new technologies will help them do their jobs more efficiently and effectively, while only 35% say these technologies will make their jobs more frustrating or difficult.
When asked how the emergence of Gen AI will impact the workforce, these were the top responses in the Mercer Real-time Insights Survey:
Supporting your employees through new technology will likely be one of the HR challenges in 2024. To support your employees as you introduce new technologies, be transparent about any changes that are coming. Recognize and address your employees’ fears by sharing how this technology can improve their workplace experience.
Employees are thinking about environmental, social, and governance (ESG) issues because they really matter to them. Most employees said it was important their employer clearly supports each of the following:
The support for living wages was the strongest, with 84% support across all demographics. In the Mercer Global Talent Trends study, 51% of US employers said their organization strongly supported living wages.
As you set your HR focus for 2024, consider leading with your values. Discover what is important to your employees and use your resources to support those causes.
Interested in gaining access to all aggregated data from this year’s study? Visit our 2023-2024 Inside Employees’ Minds Interactive Dashboard on Mercer’s Products and Solutions Shop to learn more.
Contact us or speak with your local Mercer consultant.