What will 2024 hold for HR?

As we look forward to 2024, we expect an increased focus on proving the returns from HR technologies, more fallout from company missteps in remote and hybrid work policies, and more investment in health and economic wellbeing for employees.

A key area myself and my analyst firm, Valoir, will be watching is skills and skills-related technologies.

Skills will become a crucial currency in the future of work as organizations look to maximize returns and reduce risk from one of their largest budget line items, their people.

Skills get real

In my view 2024 will see organizations get real about skills and look to technology to support their evolution to a skills-based – as opposed to job-based – recruiting, training, and career planning approach.

Although HR and leadership have been talking about skills-based organizations for some time, there are a number of emerging factors driving adoption of new skills-focused processes and technologies:

• The rise of artificial intelligence (AI) and expectations that AI will replace all or part of many employees’ jobs.
• The growth in investments in skills-focused HR applications driving more product maturity, as well as sales and marketing efforts driving greater awareness.
• The falling cost and effort associated with building and maintaining effective skills ontologies that make what  were once cost-prohibitive efforts now accessible to more organizations.
• The impact of the ‘Great Resignation’ on career and succession planning.

AI will change the skill requirements of most jobs

The arrival of AI for many roles will mean AI-driven automation will completely replace some jobs and, for others, significantly reduce the time needed to complete daily work.

Valoir’s 2023 global AI study found that automation is already underway in many industries and job roles. Plus, that automation will accelerate in 2024 with 40% of the average worker’s work day ripe for AI-driven automation.

In general, AI-driven copilots and digital assistants will change the skill requirements for many jobs.

Let’s take customer service roles as an example.

Valoir found that early adopters of AI in the contact center could reduce the time needed to train agents by an average of 30%, because automated recommendations and guidance enabled them to resolve more complicated customer cases.

However, the overall skill profile of agents shifted as well, requiring them to have more critical thinking and soft skills (such as the ability to judge whether an AI-provided recommendation was logical) rather than specific product or technical knowledge.

Customer service is just one example.

As AI transforms the nature of many jobs, having a complete and dynamic skills ontology will become more important for organizations to grow and remain competitive with their existing employees.

It’ll also help companies redeploy employees whose jobs are being partly or completely replaced, and effectively recruit and train employees to meet the organization’s skills demands of the future.

HR will need to be looking at what components of their employees’ skills profiles have the potential to be replaced by AI, and what adjacent skills those employees should be learning to reach their fullest potential and remain productively employed.

Market awareness has reached the tipping point

This fall, at UNLEASH World 2023, skills were a very popular topic.

At the show, many existing and emerging vendors were touting their capabilities to analyze, track, and recruit and train work forces based on skill (not job) requirements on an ongoing basis.

Venture capital investment in skills-focused HR applications is contributing to both accelerated product development and larger sales and marketing budgets for many of these vendors. This is driving market education and awareness of the benefits of skills-focused HR technologies.

Europe and other markets have historically been ahead of North America in developing and adopting skill-based talent management and development systems.

This is largely because of the nature of the European job markets.

But North America is starting to catch up because increasingly the numbers make sense: building and maintaining dynamic skills ontologies has gotten easier and cheaper, with the help of natural language processing (NLP) and AI.

The ‘Great Resignation’ exposed skills gaps

Although skills and talent are always a challenge, the ‘Great Resignation’ exposed how many organizations didn’t have an adequate understanding of their internal skills requirements and coverage, nor the ability to rapidly understand the impact of a business or workforce change on skills coverage.

In many cases, outdated skills profiles or overly-generic job descriptions didn’t accurately reflect the skills departing employees took with them that were actually needed for the job.

This was exacerbated by remote work, because informal network-driven skill identification and development decreased significantly.

HR is still dealing with the skill-related fallout.

My 2023 conversations with HR leaders in North America and Europe found that skills and talent top their list of challenges.

What HR should be looking for

In the skills domain in 2024, we’ll see more organizations move toward not just talent marketplaces or regularly updating talent profiles but a much more contextual and view of job roles and skills.

Thought leaders in HR need to move toward:

• Not just skills data but skill affinities, with taxonomies that understand what skills employees excel at or need to learn as well as what they enjoy doing. This will help upskill employees for company needs while increasing employee engagement. As a result, the average employee will be spending more of their day in work activities they like doing – or learning skills they want to learn.
• Evidence-based skill approaches, particularly in technology and professional roles that require a granular understanding of the level of expertise in a particular skill – and where a degree or certification may not be the best indicator of skill level. Skills profiles that incorporate data from internal sources such as GitHub or Jira, and external sources such as publications, SEC filings, or patent records can help to both broaden a talent pool and gain a more specific understanding of a candidate’s relative strengths.
• More visualization tools that enable HR leaders to quickly understand how changing scenarios will impact skill coverage and what business areas are in greatest need of skill development or redeployment.
• A more composable approach to skills and job roles that enables more fluid skill-to-job mapping and the more rapid composition of new job roles that reflect the increasing impact of AI and automation.
• An increased focus on skills development in areas such critical thinking, communication, situational awareness, and other skills that will help employees to leverage AI and automation for the greatest benefit while minimizing risk exposure.