How HR Leaders Can Thrive in a Complicated Job Market

In this article, we discuss:

• Industry Highlights
• The Internal Mobility Advantage
• High-Potential Employee Attrition on the Rise, Promotion Rates Rebalancing
• Engagement Is Rising, with Some Exceptions
• How Employers Can Thrive in Today’s Landscape
• Methodology

The job market is complicated. Workers feel stuck. Even with more open jobs in some industries, recession fears loom large and people are feeling uncertain about the economic future.

What’s really going on?

We dug into the data from millions of actions (approving a request or PTO, etc.), events (each hire, promotion, or employee transfer), and employee surveys. Here’s what we found:

• High-potential employees are leaving. Time to double down on key talent retention.

• The total number of both applications and jobs has grown compared to 2023, likely resulting in more stress in the working lives of already harried recruiting professionals.

• Internal candidates have a much better chance of getting a job than external candidates. 

• Employee engagement is stabilizing . . . kind of. But there are big differences among industries.

Want to keep your business moving forward in this complex job market? Prioritize keeping your best people, help them grow, and clearly communicate your business goals.

In our midyear 2024 report, job applications were growing 4x faster than job openings. Now, the gap has narrowed slightly, as our latest data shows that applications are growing 3.8x faster. The bottom line is that while employers can afford to be very choosy about who they hire, this makes for a challenging environment for people actively looking for jobs.

Here are the global workforce trends by the numbers. All percentage changes show the full calendar-year 2024 growth rates compared to full-year 2023:

• Workday customers created 38 million jobs: up 7% year-over-year

• Candidates submitted 356 million applications in Workday: up 26% year-over-year

• Workday customers created 28 million offers/employment agreements: up 9% year-over-year

Globally, almost 1 million applications a day were processed on the Workday platform in 2024. In the U.S., based on numbers from the Bureau of Labor Statistics, we see that in Workday, customers processed approximately 30% of all job openings in the country last year.

The graphic shows that hiring increased in every industry except energy and utilities, creating a more competitive job market.

Industry Highlights

• Tech: This industry saw the largest increase in job openings (21%) and offers (13%) despite industry restructuring. Competition for these jobs is high due to tech layoffs, leading to a 41% increase in applications. Almost half (49%) of open tech roles were filled internally. Many tech companies are reorganizing for an AI future, a common reason for layoffs.

• Transportation: A 4% decline in job openings and a 5% decline in offers points to a slowdown despite a 13% increase in application volume. According to Smart Trucking, supply chain disruptions, economic instability, and a reduction in the number and availability of truck-driving jobs has put the brakes on this sector. Freight demand has also decreased, contributing to the overall slowdown in the industry.

• Healthcare: This sector is booming, with strong gains across the board: job openings are up 14%, but competition for roles is increasing with applications up 32% and offers up 20%. 

• Energy and Utilities: A potential talent shortage may be brewing with offer rates up 21%, outpacing modest gains in job openings (6%) and applications (9%). 

• Hospitality: Minor gains in job openings (4%) and flat offer rates contrast with a 24% surge in application volume, leading to greater competition. The increased application volume might seem like a benefit to employers, but minor gains in job openings reveal that organizations are not capitalizing on this influx of applicants. The high volume of applications is a symptom of people needing work, but the fact that offer rates are flat and that people are still leaving those jobs shows that the core employee retention challenges within the hospitality industry have not been solved.

The Internal Mobility Advantage

While open roles increased, one-third were filled internally. Data from customers using HiredScore shows a significant advantage for internal candidates. They represent 6% of applicants but get 32% of jobs.

Internal candidates are 5x more likely to be hired, showing that companies focus on internal hiring and that these candidates have a much higher success rate.

Our data reveals that in-demand roles in industries such as healthcare and sales were filled more quickly in general over the course of the year (12% and 11% faster, respectively), and the time-to-hire for internal candidates was notably faster than the already shortening time-to-hire window. 

For other job types—accounting, manufacturing, and customer support—time-to-fill is not much different between internal and external candidates (less than 1% quicker for accounting and manufacturing, 2% for customer support). This may be because these roles are commoditized and the knowledge an internal candidate brings isn’t more extensive than the knowledge an external candidate would have.

Engineering is a job type where time-to-hire for internal candidates is slowing. From 2022 until 2024, internal candidates were hired 8% quicker but in 2024, this dropped to 4%. This could indicate the commoditization of certain jobs in engineering, or that AI is now able to complete more engineering tasks. Another reason could be the increase of engineers in the job market given widespread tech layoffs.

Organizations are weighing the benefits of hiring internally against the benefits of bringing on new talent, especially in orgs where roles are commoditized. And, with organizations not growing as quickly as in recent years, internal candidates are still seen as a safer bet. With AI’s potential to impact the labor landscape, how long internal candidates have the edge remains to be seen. 

High-Potential Employee Attrition on the Rise, Promotion Rates Rebalancing

Looking at customers who use Workday People Analytics, metrics show that high-potential/high-performer employee attrition continues to rise. In 10 out of the 11 industries with enough data, we’ve seen an increase in this type of attrition.

In 2023, promotion rates plummeted in most industries. This happened alongside record-low employee turnover and a decline in internal movement—a reversal from the emphasis in 2022 on internal mobility. The resulting lack of movement may have led to employees feeling trapped within their roles due to fewer advancement opportunities. 

Looking at 2024, we’re seeing a mixed picture: half of the industries are experiencing a rebound in promotions, while the other half continue to see declines.

Overall headcount growth in 2024 declined from 2023 in 7 out of 9 industries tracked. The two industries showing a positive headcount trend in our data changed very little, with retail median growth up just 0.1% YoY (to 1.9%), and technology showing just 0.2% overall headcount growth, a rebound from -1.5% median value seen at the end of 2023—far from the growth seen in prior periods.

Engagement Is Rising, with Some Exceptions

Looking at metrics from Workday Peakon Employee Voice, we found that 35% of employees globally are highly engaged. This means that these employees had an overall average score of 9-10 derived from key engagement drivers—company recommendation, loyalty, belief, and satisfaction—and influenced by 14 engagement drivers including reward, strategy, recognition, and organizational fit.

As global engagement levels improved slightly, the proportion of highly engaged employees rose by 3 percentage points in APAC (Asia-Pacific), 2 points in North America, and 1 point in EMEA (Europe, Middle East, Africa). And, while Latin America experienced a 1-point decline, 50% of employees in the region remain highly engaged. 

The percentage of highly engaged employees increased across most industries compared to the previous year with the exception of professional and business services, which experienced a notable 8 percentage point decline.

See the chart below for an industry snapshot of highly engaged employee rates in 2023 and 2024:

While highly engaged employees have increased by an average of 3 percentage points in frontline industries—energy and utilities, healthcare, retail, manufacturing, and transportation—in knowledge industries, high engagement either lost or barely gained ground: communications, media and tech (unchanged), financial services (+2), and professional and business services (-8%). Furthermore, areas such as reward, recognition, and strategy continue to be the lowest-scoring drivers of engagement across both sectors, with a steeper decline in knowledge industries.

Our research also shows that leadership needs to focus on clarity and trust: scores measuring how well employees understand their organization’s strategy have dropped, especially in knowledge-based industries. These low scores may reflect uncertainty about how organizations are handling macro trends and AI’s impact. Employees may need clearer communication and alignment with leadership’s long-term goals. More details about employee engagement will be in our upcoming “Global State of Engagement Report 2024.”

How Employers Can Thrive in Today’s Landscape

With 91% of industries showing a significant increase in high-potential workers leaving their employers, business leaders urgently need to stop the bleeding. As our Chief Learning Officer Chris Ernst says in our recent study on skills-based organizations, “AI is reshaping the workplace, but the human element has never been more essential. Organizations that embrace a skills-first mindset will not only unlock AI’s potential but will also harness human ingenuity in new and transformative ways.”

Here are some best practices for keeping high-potential workers and increasing your organization’s business impact:

• Collaborate with HR. Identify and implement targeted retention strategies, ensuring that top talent remains engaged and motivated. This could include competitive compensation, career development opportunities, and recognition programs. 

• Make work matter. Our research has found that making sure your employees experience “meaningful work” should be a top priority. That’s because workers who believe they are doing meaningful work feel 37% more accomplished than those who don’t, even under workloads employees describe as “challenging.” 

• Create the AI future you want to see. HR leaders need to shepherd in and promote the smart use of AI throughout the organization to create business impact and elevate human potential.

• Communicate your business goals clearly and often. Addressing concerns about leadership and strategy can help with employee morale and confidence, leading to more high-potential employees sticking around.

• Use people analytics tools to make data-driven decisions about talent management and workforce planning. In uncertain times, good data and solid HR fundamentals go a long way toward creating a workforce that’s agile and productive, and helps the business meet its goals. 

• Finally, supporting internal mobility is crucial. As we show in the table below that lists some of the steps we took to boost internal mobility (taken from page 15 of our report), leaders can ensure faster onboarding and secure candidates who are already a good fit for the company. Take a hard look at the career progression pain points particular to your organization and invite feedback from across the business on how to address them.

Methodology

The data in this Workday Global Workforce update comes from several Workday sources, including aggregated customer data from the use of Workday Recruiting, Workday Peakon Employee Voice, Workday People Analytics, and/or HiredScore (a Workday company). These sources provide insights into millions of actions, events, applications, survey responses, and employee data. Note that the data does not include Workday employee information and that some movement in metrics is due to customer go-lives and turnover. The analysis was conducted by a team of Workday experts: Greg Anderson, Jeremy Grynpas, Vishnu Mohan, Ernest Ng, and Brad Reaume.