Inflation Still a Top Concern Among Labor Shortages, New SHRM State of the Workplace Report Declares

ALEXANDRIA, Va. – SHRM, the trusted authority on all things work, today published its 2023-24 SHRM State of the Workplace Report, detailing the greatest organizational concerns of 2023 and the top three priorities for organizations in 2024. The report offers insights about how to best address these topics in 2024.

According to SHRM research, HR professionals indicated the four most pressing workplace concerns in 2023 were inflation, employee mental health, labor shortages and economic slowdown. In particular, inflation stood out as the greatest worry in 2023—with nearly 8 in 10 HR professionals (79%) reporting that it was a top concern within their organizations. These prevailing sentiments have shaped the expectations of U.S. workers, with 87% believing that fair compensation for current employees should be the highest priority for their organizations in 2024.

“SHRM has found that inflation and talent shortages are still significant workplace concerns among employees and employers alike,” said Johnny C. Taylor, Jr., SHRM-SCP, SHRM president and CEO. “As these factors influence employees’ standards for their organizations, as well as employers’ administrative capabilities, we urge all members of the world of work to maintain civility in 2024 and foster a culture of mutual understanding.”

Looking ahead to 2024, HR professionals say the top three priorities for organizations will be maintaining employee morale and engagement, retaining top talent, and finding/recruiting talent with the necessary skills. An important consideration for these top priorities is creating a civil workplace which in turn can result in the betterment of employees and the overall success of the company.

Key findings include:

• Despite the final months of 2023 bearing positive signs for the economy, such as low unemployment rates and rising GDP, organizations are still concerned about inflation going into 2024.
  • Although U.S. workers are longing for raises, 68% of HR professionals report that reducing costs and increasing efficiencies is a top priority for their organization in the new year. Meanwhile, only 39% of HR professionals claim that their organization was “very effective” or “extremely effective” at reducing costs and increasing efficiencies in 2023.
  • Despite 87% of workers believing fair compensation for current employees should be their organization’s top priority, only 27% of HR executives say they factor inflation into annual pay raises.
• Labor shortages were the third-most prominent worry for organizations in 2023. In response, HR departments are thinking more strategically about workforce management in 2024. Upskilling or reskilling the current workforce is a top priority for 53% of organizations.
  • About 58% of HR departments attribute talent shortages to a lack of qualified candidates, ranking this as their greatest challenge in acquiring talent in 2023. U.S. workers ranked talent acquisition as the area of work that HR departments were least successful with in 2023, collectively assigning it a grade of C-.
  • HR departments are taking several steps to improve recruitment in 2024 including leveraging underutilized talent pools (62%) and relaxing education requirements (28%).
• Artificial intelligence was integrated into workplaces all over the country in 2023, and this trend will continue. However, a degree of uncertainty remains about how it will be used and regulated.
  • About 25% of HR departments have started using AI. Of these organizations, 42% use AI in the talent acquisition process. SHRM’s research estimates that about 51% of HR departments will be using AI by 2025.
  • Despite the widespread use of AI, only 12% of HR professionals and 15% of U.S. workers believe their organization is using this technology effectively.
  • Although the usage of AI in the HR function continues to grow, only 20% of HR professionals view integrating AI into their work as a high priority for 2024.

To view the full 2023-24 SHRM State of the Workplace Report, click here. 

Methodology: 

A total of 2,028 HR professionals (22% of whom were at the executive level) and 599 U.S. workers employed in areas other than HR were surveyed in November 2023. The survey of HR professionals was fielded electronically using the SHRM Voice of Work Research Panel. The data was weighted so that respondents would reflect the distribution of U.S. HR employees. The survey of U.S. workers was fielded electronically using the Amerispeak Omnibus probability-based panel from NORC at the University of Chicago. All data was weighted to reflect the U.S. adult population.

About SHRM 

SHRM creates better workplaces where employers and employees thrive together. As the voice of all things work, workers and the workplace, SHRM is the foremost expert, convener and thought leader on issues impacting today’s evolving workplaces. More than 95 percent of Fortune 500 companies rely on SHRM to be their go-to resource for all things work and their business partner in creating next-generation workplaces. With 300,000+ HR and business executive members in 165 countries, SHRM impacts the lives of more than 115 million workers and families globally. Learn more at SHRM.org and on Twitter @SHRM.