While hiring outlooks remain solid for the second half of 2024, budget concerns may be hitting hard at some companies, according to a July 24 report from Express Employment Professionals.
Continuing trends observed during the second halves of 2022 and 2023, about 60% of hiring managers said they plan to increase the number of employees during the last half of 2024, while 32% said they would maintain status quo and 6% said they would be reducing employee count, “on par with previous waves,” the report said.
In a survey of 1,003 U.S. hiring decision-makers, companies that plan to add to their workforce cited increased volumes of work and newly created positions.
On the other hand, among those that plan to decrease their numbers, 71% emphasized the need to reduce costs. About 25% said they’re reducing head count due to increased use of automation, technology or AI, up from 16% citing the same in the last survey done by the company.
Beyond that, a third of hiring managers who plan to maintain the status quo or decrease numbers said budget constraints play a major role in the reason not to hire or increase head count. In particular, they said their company doesn’t have enough money to hire right now or for the rest of the year.
In addition, 30% said they don’t need to hire more employees right now, and 22% said they’re waiting to see if the workload levels out before hiring additional people.
Employee retention increased during the second quarter of 2024, continuing a first-quarter increase and signaling the potential for lower attrition through the rest of the year, according to an Eagle Hill Consulting report. Retention numbers have reached the highest point in 18 months and surpassed previous highs seen during the first quarter of 2023, the report found.
At the same time, hiring has been pushed to the back burner for many companies due to budget concerns, according to data from HR Dive’s Identity of HR 2024 survey. In response, HR pros say they’re now more focused on “maximizing value within budgetary constraints” and meeting higher expectations for their spending choices.
Companies cut salary budget increases to 3.6% during the first quarter of 2024, seeing more stability compared to the job churning observed during the Great Resignation, according to a Mercer report. Companies also said they planned to promote 8% of their workforce in 2024, as compared with 10% in 2023, budgeting 9.2% pay increases for promoted employees, down from 9.4% in 2023.