Article: Turning Great Attrition into Great Attraction: Decoding hiring and retention strategies for 2024

Recruitment

Turning Great Attrition into Great Attraction: Decoding hiring and retention strategies for 2024

In anticipation of the 2024 hiring surge, challenges related to compensation, retention, and AI are evident. Nupur Ray from Bajaj Allianz Life Insurance, Kamaljeet Kaur from Gensol Group, and Deepti Sagar from Deloitte shared pragmatic solutions and strategies for these issues.
Turning Great Attrition into Great Attraction: Decoding hiring and retention strategies for 2024

In India's dynamic job market, tackling employment challenges stands out as a key concern for policymakers. Despite notable advancements in literacy, education, and vocational skills, the pursuit of fulfilling and enduring employment opportunities remains a lingering issue. This persists even as India cements its status as one of the world's fastest-growing economies, supported by a youthful and energetic workforce ready to contribute to its progress. Nevertheless, the swift evolution and innovation bring forth substantial challenges for both employers and employees in keeping pace with the changes.

The workforce is currently in search of more than just jobs; they are looking for opportunities that provide favourable work environments, stable employment, and enhanced compensation. Regrettably, the development of such employment opportunities has not matched the increasing number of job seekers. Concurrently, it is projected that the Indian job market will undergo a 22 per cent turnover in the next five years, with the most prominent roles emerging in AI, machine learning, and data segments.

Moreover, on a global scale, the job market turnover is anticipated to be around 23 per cent, as per the World Economic Forum's latest Future of Jobs report, with projections indicating the creation of 69 million new jobs and the elimination of 83 million jobs by 2027.

Which sectors are likely to see the maximum growth?

61 per cent companies believe that the broader applications of ESG (environment, social, and governance) standards will lead to job growth. This is closely followed by the increased adoption of new technologies at 59 per cent and the expansion of digital access at 55 per cent. The key roles driving industry transformation in India are expected to be AI (artificial intelligence) and machine learning specialists, along with data analysts and scientists.

Globally, the manufacturing and oil and gas sectors exhibit the highest level of green skill intensity, with India, the US, and Finland ranking at the forefront for the oil and gas sector. Conversely, India is among the seven countries where job growth in social jobs has been slower compared to non-social jobs.

The WEF highlighted that macro trends, such as the green transition, ESG standards, and the localisation of supply chains, are the primary catalysts for global job growth. Meanwhile, economic challenges like high inflation, slower economic growth, and supply shortages pose the most substantial threat. The widespread adoption of technology and the escalating trend of digitisation will lead to significant disruptions in the labour market, ultimately resulting in an overall positive impact on job creation.

The surge in technology and digitalisation is propelling the fastest-growing roles, with big data leading the list of technologies anticipated to generate jobs. The employment of professionals like data analysts, big data specialists, AI machine learning specialists, and cybersecurity experts is projected to increase by an average of 30 per cent by 2027.

In terms of the largest absolute gains in jobs, the education and agriculture sectors take the lead. Reports predict that jobs in education will experience about a 10 per cent growth, resulting in an additional 3 million jobs for vocational education teachers and university/higher education teachers.

India stands on the brink of the Great Attrition

In 2024, professionals in India are set to prioritise their careers, with the majority expressing a desire for change. LinkedIn's research reveals that 88 per cent of professionals in the country are actively seeking new job roles in the coming year. But what are the driving factors behind this trend?

  • Challenges in keeping pace with swiftly evolving job skills, driven by rapid advancements in AI technology.
  • A strong inclination towards achieving a better work-life balance (42%).
  • The pursuit of higher wages (37%).
  • Concerns related to fair treatment, respect, job security, and overall work engagement.
  • Issues surrounding effective management, supportive leadership, resource accessibility, and equal opportunities.
  • Satisfaction with the current managerial situation and the consistent promotion of equal opportunities consistently stand out as top factors linked to employee attrition.

What can be done? 

A rising number of employees are contemplating job transitions. Organisations that invest time to comprehend the reasons behind this trend and respond considerately will gain a competitive edge in attracting and retaining talent. The question remains: How can they achieve this?

To guide you in strategising for the future workforce, People Matters recently conducted its first Big Questions session of the year, focusing on the expected surge in hiring in 2024. The discussion delved into significant challenges related to retention, compensation, and attrition. Industry leaders, including Nupur Ray from Bajaj Allianz Life Insurance, Kamaljeet Kaur from Gensol Group, and Deepti Sagar from Deloitte, joined us to share insights on transforming the anticipated Great Attrition into the Great Attraction.

IT, BFSI, and EV: What’s driving the growth? 

Electric Vehicles

The thriving green economy is poised to introduce 3.7 million jobs by FY25, supplementing the current 18.5 million positions, as revealed by the Green Industry Outlook report by TeamLease Digital. The demand for skills in renewable energy, environmental health safety, solar energy, corporate social responsibility, and sustainability is soaring. Consequently, there will be a rise in jobs, particularly in sectors like waste and wastewater management. Companies are actively expanding their workforce to support their green initiatives, emphasising the significance of green business expansion and the surge in demand for electric vehicles.

Kaur, the Chief People Officer - Gensol Group, emphasised that the green sector in India is projected to experience a 20% increase in jobs. Among these, renewables are anticipated to constitute 30% of total jobs, followed by green construction at 18%.

She stated, "The expansion in the green business aligns with the ongoing hiring trend. Consequently, the green sector actively seeks talent from reputable institutions and international markets based on project requirements. Notably, India is witnessing a rapid surge in demand for EVs, autonomous and connected cars, fostering the need for a skilled workforce. Additionally, the clean energy and green hydrogen sectors are set for substantial growth, with a notable surge expected between FY24 and FY25, driven by extensive government investments and initiatives such as the National Green Hydrogen Mission."

Banking, Financial Services, and Insurance

In 2023, the banking, financial services, and insurance (BFSI) sector accounted for over one-third of data science and analytics jobs in India, as per a report by edtech firm Great Learning. The adoption of emerging technologies such as artificial intelligence, machine learning, and big data analytics has driven this growth, especially in areas like risk management, fraud detection, and customer service. 

Notably, this growth is geographically widespread, with job openings in cities like Ahmedabad, Vadodara, and Kolkata witnessing increases of 145%, 72%, and 49%, respectively. Ray, the Head Talent Management, Employee Experience & OD, Bajaj Allianz Life Insurance, emphasised that this upward trend is expected to continue in 2024.

“The BFSI sector is likely to lead the charge with a robust 25% hiring intent, indicating a strong focus on industrial expansion and talent acquisition in the financial domain. This will be further boosted by great leadership, providing additional impetus to hiring and retention practices and incorporating values to shape the sector's culture over time," highlighted Ray.

Information Technology

The Indian IT sector, which experienced a contraction in hiring due to the global economic slowdown and funding winter, is expected to see a positive turnaround with an 8-10% increase in hiring in 2024. Although some of the largest tech companies in the world, such as Facebook (Meta group of companies), Amazon, Apple, Microsoft, Netflix, and Google (Alphabet), registered a 90% decline in active job postings in India in 2023 compared to 2022, hiring activity is expected to pick up in 2024.

"The current job market's ongoing growth is driven by optimism and prosperity, expected to continue in the coming years, and the significant impact of technology, particularly generative AI. The growth is marked by stability in the market, moving away from replacement-driven hiring to growth-led hiring. Job seekers are now focused on stability, seeking opportunities where they can contribute value and grow with the organization. Additionally, the evolving job market is strongly influenced by the demand for specific skills," stated Sagar, the Chief People and Experience Officer, Deloitte.

Gen AI: To take or alter the jobs?

Concerns about automation have persistently loomed over the future of work. The introduction of Generative AI sparked both apprehension and hope. While AI is expected to enhance jobs, there's a counterargument suggesting that job enhancement for some could result in job replacement for others. Simplifying a worker's tasks by a factor of 10 might render the supporting positions obsolete. A report from McKinsey in June 2023 projected that Generative AI could automate between 60% to 70% of employee workloads.

In the context of India, during the World Economic Forum summit in Davos, Switzerland, Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF), emphasised that 40% of jobs worldwide are vulnerable to the impact of AI. Nevertheless, this percentage varies among countries, with the United States facing a higher risk at 60%, while India encounters a comparatively lower risk at 30%. This difference is primarily attributed to a substantial workforce engaged in the agricultural sector in India, which is less affected by AI.

"In the evolving landscape, the concept of super jobs is reshaping traditional roles, emphasizing a shift in job dynamics. Contrary to the fear of job loss due to generative AI, the reality is that jobs are undergoing fundamental changes, and an influx of routine tasks is being automated, paving the way for more complex and fulfilling super jobs," explained the Chief People and Experience Officer at Deloitte, highlighting some of the significant transformations linked to AI and jobs in India:

Reskilling - Professionals will actively seek niche skills to adapt to the changing job market. The trend will extend beyond technology-centric roles, encompassing various professions and industries.

Super jobs - Super jobs are intertwined with the influence of generative AI, shaping organisational strategies. The transformation will extend beyond technology-centric roles, impacting business models across industries.

Growth in Data and Analytics - Data science skills will become crucial as organisations rely on data-driven decision-making. Security and cybersecurity expertise will play a critical role in safeguarding digital landscapes.

Specialised skills demand - Specialised skills will become increasingly sought after in the evolving job market. Foundational understanding of emerging technologies will become crucial across various roles and levels of management.

Green Jobs: Challenges in reskilling and retention persist

The battle against climate change stands as one of the most critical global agendas today. To reach the net-zero target by 2050, a paradigm shift is required in our economic model, aligning it with the principles of sustainability. Encouragingly, glimpses of these transformations are already emerging in our global economy. 

The green transition is anticipated to generate 30 million jobs in clean energy, efficiency, and low-emission technologies by 2030. The top ten fastest-growing roles on LinkedIn in the past four years include less conventional positions such as sustainability analysts, sustainability managers, power engineers, and more.

As a result, the transition to greener economies and industries will significantly impact the labour market. While certain jobs may vanish, others will undergo transformation, and a multitude of new positions will emerge. The majority of job creation potential is linked to sustainable practices, including renewable energy production, housing renovation, repair and reuse, zero-emission transport, and organic farming. Often, these "green" jobs are more labour-intensive than the activities they replace.

On the other hand, the emergence of AI, especially generative AI, has become crucial in influencing the course of organisations dedicated to adopting environmentally friendly practices. Numerous ways have already been envisioned by experts in which artificial intelligence can contribute to our battle against climate change through innovations such as transport management. The possibilities for AI in the mobility sector are nearly boundless, encompassing alterations in traffic flow based on particulate matter emissions to enhancing the resilience and efficiency of public transport systems, consequently reducing carbon emissions.

Providing another illustration, the Chief People Officer at Gensol Group mentioned, "In the consumer technology sector, our customer experience team is experiencing a transformative phase. It extends beyond simply addressing customer queries; the emphasis is now on delivering an enhanced customer experience. The incorporation of generative AI technology is considered a catalyst in reaching this objective. This shift in paradigm underscores our dedication to remaining at the forefront of technological advancements, ensuring a competitive edge in the market."

“Simultaneously, in our role as a provider of ride-hailing services with a significant investment in EV infrastructure, the demand for technical skills is evident. The continuous evolution of technology requires our workforce to stay adept in areas such as data analytics, understanding data science, and navigating the intricacies of security and cyber aspects. These technical skills are indispensable not just for today but as building blocks for the future,” she added. 

Yet, as the discussion on AI's influence on employment gains momentum, a nuanced viewpoint comes to light. Although AI may alter certain technical roles, it cannot substitute essential human skills. "Attributes like resilience, complex decision-making, stakeholder management, and relationship building are recognised as indispensable elements of the workforce. As HR leaders and hiring managers, our approach underscores a harmonious fusion of technical expertise and human-centric skills to nurture a thriving organizational culture," expressed Kaur.

Turning our attention to talent retention, a multi-faceted strategy is imperative. This can be accomplished by: 

  • Craft a clear and compelling employee value proposition to communicate the organization's unique benefits.
  • Offer competitive compensation packages that align with industry standards and reflect the value employees bring.
  • Provide dynamic career advancement opportunities to encourage continuous growth and development.
  • Embrace diversity and inclusivity, actively participating in initiatives to expand the talent pool.
  • Collaborate with external partners, such as the recent collaboration with SEC, to demonstrate commitment to gender diversity.
  • Utilise data-driven insights for HR decisions, tailoring personalized journeys for employees based on their unique needs.
  • Adapt to the evolving nature of the workplace by redefining spaces to foster an enabling and progressive culture.
  • Focus on attracting, retaining, and nurturing a diverse and skilled workforce through these collective initiatives.

Employee Retention: The necessity and significance in 2024

Addressing the issue of retention in more detail, Nupur Ray emphasised that with unprecedented rates of job turnover during the Great Resignation, many companies struggled to retain employees. As a result, employee retention has become even more crucial in today's rapidly changing workplace. Some of the benefits of retention include cost savings, increased productivity, stronger customer relationships, higher employee engagement, improved trust and collaboration, a more positive workplace culture, preservation of institutional knowledge, narrowed skill gaps, higher employee morale, reduced stress and burnout, more effective recruitment, and more. Ray also outlined strategies to enhance retention, irrespective of the sector or organisation:

Shift to retention focus

  • Organisations are transitioning from a primary focus on hiring to prioritising the retention and development of talent.
  • Acknowledges the importance of nurturing and retaining skilled employees for long-term success.

Emphasis on internal growth

  • Prioritise internal growth for knowledge transfer, fostering an understanding of the organisational ecosystem, and developing qualities such as empathy and accountability.
  • Recognises the value of internal career progression as a key component of talent retention.

Key role of internal mobility

  • Internal mobility, especially for managers, plays a crucial role in enhancing engagement and contributing to organisational goals.
  • Shifts from a top-down approach to engagement strategies to a bottom-up approach, empowering managers to actively contribute.

Focus on Employee Value Proposition (EVP)

  • Recognises the critical role of a well-crafted Employee Value Proposition (EVP) at both macro and individual experience levels.
  • Considers sensitisation towards the quality of work, respectful treatment, and overall positive employee experience as integral to effective retention strategies.

Bottom-up engagement strategies

  • Shifts engagement strategies from a top-down approach to a bottom-up approach, enabling managers to play a significant role in achieving organisational objectives.
  • Empowers managers to actively contribute to engagement strategies and foster a positive work environment.

Soft skills' growing significance

  • Acknowledges the increasing importance of soft skills alongside hard skills for effective talent retention.
  • Highlights the necessity of skills that go beyond job descriptions, emphasising adaptability, communication, and problem-solving.

"The current workforce is characterised as diverse, young, empowered, and enthusiastic. Unlike previous generations, today's employees are not just looking for a job but a workplace aligned with their values, lifestyle, and passion for excellence. Questions about an organisation's purpose and values have become critical for attracting talent. To be an aspirational employer and a talent magnet, it's essential to emphasise the need to balance high performance with the right culture and flexibility. Striking a delicate balance between pushing for growth and caring about well-being is considered crucial. Both soft skills and hard skills are deemed equally important," said Deepti Sagar.

Talent strategy in the age of AI

AI has become an integral component of the talent acquisition process today, assisting in various tasks such as answering candidate questions, scheduling interviews, and optimising job posts. Recruiters also leverage AI's support in candidate sourcing, as many platforms provide features to improve resume screening and identify suitable candidates based on their fit score. The significance of AI in recruitment is already apparent, and the current emphasis is on exploring additional meaningful applications. Nupur, Kamaljeet, and Deepti stated the importance of AI in HR.

Reskilling of recruiters

  • AI facilitates the training of recruiters, enhancing their ability to evaluate candidates effectively. 
  • Particularly advantageous for recruiters with traditional training in conventional languages.

Productivity enhancement

  • AI handles tasks such as CV parsing, interview scheduling, and initial interviews through a bot.
  • Drastically improves efficiency and effectively manages high task volumes.

Complex decision making

  • AI identifies unconscious and implicit biases in decision-making processes.
  • Supports comprehensive skill assessments for a more thorough candidate evaluation.

Real-time insights and engagement

  • Utilises AI for real-time insights, backend analysis, and engagement strategies.
  • Sustains connections, especially with less engaged or passive individuals.

Comprehensive employee experience

  • Focus extends to the entire employee experience, covering onboarding, pre-onboarding, and ongoing support.
  • AI-powered platform offers customized 24/7 solutions directly to employees, reducing dependence on managers.

Learning and development

  • Addresses the demand for skilling and reskilling through AI.
  • Offers employees tailored learning paths and career choices within the organisational ecosystem.

Focus on Key Qualities 

  • Highlights the importance of qualities like empathy, complex decision-making, relationship management, creativity, and innovation for both employers and employees.

To learn more from leaders about some of the burning questions in today’s world of work, stay tuned to People Matters' Big Question series on LinkedIn.

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Topics: Recruitment, Compensation & Benefits, #Hiring, #Retention, #BigQuestions, #Outlook2024

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