August 8, 2024 – Fifty-two percent of U.S. companies plan to add new permanent hires in the second half of the year, according to a new study from talent solutions and management consulting firm Robert Half. Another 43 percent plan to fill vacant positions, and 57 percent said they plan to increase the number of contract professionals on staff, a decrease of 10 percentage points from the first half of 2024.

“Today, employees are more selective when it comes to career moves,” says Dawn Fay, director of operations at Robert Half. “Employers should have a strategic hiring plan and remain flexible to attract in-demand talent and keep projects on track and workloads under control. While hiring remains a priority, employers should not lose sight of their current workforce. Qualified talent remains in high demand, so it’s critical to prioritize retention strategies to keep your best employees on board.”

According to the survey, the most important factors influencing hiring decisions are company growth (57 percent), employee turnover (47 percent), and project-based work that requires skilled talent (42 percent). However, most employers (86 percent) report hiring challenges. Their main concerns are: lack of candidates with the required skills (48 percent); hiring quickly to attract the best talent (48 percent); and meeting candidates’ salary expectations (48 percent).

Given these challenges, Robert Half found that nearly two-thirds (62 percent) of managers would be willing to rely on years of experience if the candidate has the skills required for the open position.

Attracting talent requires a strategic approach

Job growth has remained stable year-on-year, with companies hiring over 5.5 million new employees each month. The unemployment rate is around four percent, and voluntary resignations have leveled off at levels similar to pre-pandemic levels. Despite this, Robert Half found that 86 percent of managers are struggling to find qualified talent—three in 10 (30 percent) said it is very difficult.

To attract the best talent and stand out from the competition, hiring managers have implemented proactive strategies and made the following offers, according to Robert Half:

• Hybrid jobs where employees can spend time at home and in the office (41 percent).
• Time slot work, which allows teams to work outside of normal business hours (41 percent).
• Higher starting salaries (38 percent).

Global outlook

A separate report from ManpowerGroup recently showed that global hiring intentions for the third quarter of 2024 remain strong with a Net Employment Outlook (NEO) of 22 percent, although the outlook has been weakening since the third quarter of 2023, according to ManpowerGroup’s latest Employment Outlook survey. The survey, which collected data from over 40,000 employers across 42 countries, shows that while the NEO remains unchanged from the previous quarter, it represents a decline of -6 percent compared to the same period last year. This year-on-year decline shows that economic uncertainties continue to impact hiring plans.

In addition, the survey found that employers are beginning to recognize the impact of artificial intelligence (AI) and machine learning (ML) technologies. More than seven in 10 employers (72 percent) believe AI and ML will have a positive impact on business performance, particularly in the IT, finance and real estate industries. Most (70 percent) plan to use AI to drive upskilling, reskilling and training efforts.

Related: Hiring confidence weakens as employers navigate economic headwinds

“While labor markets remain resilient in many markets, ongoing economic uncertainty continues to give employers pause for thought,” said Jonas Prising, Chairman and CEO of ManpowerGroup. “Most are incrementally more cautious than they were this time last year, prioritizing hiring people with the core skills they need. At the same time, the promise of AI advances is top of mind for companies across all industries. This data shows that companies are focused on upskilling their current workforce and maximizing the potential of AI to drive efficiency and increase productivity.”

Trust in top management falls to three-year low

In the three years that Russell Reynolds Associates has been tracking executive confidence, the world has faced a relentless cycle of numerous, conflicting and often unpredictable issues. From the conflicts in Ukraine and the Middle East and their destabilizing impact on the world, to inflation, rising interest rates and the launch of ChatGPT, which has sparked massive interest in generative AI, the executive landscape has been anything but calm. In addition, the firm notes that nearly half of the world’s population will head to the polls in what many are calling a super election year. “Executives are taking note,” says a recent Russell Reynolds report. “At all levels, executive confidence in their leadership team has been progressively declining, meaning the leadership team’s ability to deal with this ongoing uncertainty and ever-increasing complexity is eroding.”

“Leaders are not only faced with a multitude of problems, but must also deal with rising expectations and scrutiny from an increasing variety of stakeholders,” said Constantine Alexandrakis, CEO of Russell Reynolds Associates. “This places an enormous cognitive and emotional burden on today’s leaders.”

While North American employers remain the most optimistic, with a 27 percent forecast for the third quarter, hiring intentions have declined – eight percent from the third quarter of 2023 and four percent from last quarter. Employers in the United States (30 percent) reported the strongest hiring intentions, although the forecast declined five percentage points year-over-year. U.S. employers report one of the strongest global forecasts for the information technology sector, at 50 percent.

Current job report

According to the latest report from the US Bureau of Labor Statistics, employment increased by 114,000 in July, while the US unemployment rate rose to 4.3 percent. The number of unemployed in July was 7.2 million. Employment continued to rise in the health care, construction, and transportation and warehousing sectors, while jobs were lost in the information sector.

“Temperatures may be hot across the country, but there is no summer heat for the labor market,” said Becky Frankiewicz, president of employment services firm ManpowerGroup. “The general slowdown has caused us to lose most of our gains from the first quarter of the year.”

“The latest snapshot of the labor market points to a slowdown, not necessarily a recession,” said Jeffrey Roach, chief economist at LPL Financial. “However, early warning signs point to further weakness.”

“Although the labor market has been remarkably resilient over the past two years of high interest rates, it is important for the Federal Reserve to preempt a further weakening of the labor market by proceeding with the rate cut expected in September,” said Clark Bellin, chief investment officer at Bellwether Wealth.

Related: How to get ahead in the hiring waiting game

Contributions by Scott A. Scanlon, Editor in Chief and Dale M. Zupsansky, Managing Editor – Hunt Scanlon Media