Watch the video below to learn more about the role HR might play in 2025.
Recruiting and hiring statistics for HR
Now let’s focus on key HR trends and HR statistics 2023 to help you improve your hiring, recruitment and retention. Above all, studying recruitment marketing data and people analytics will help you attract and keep the right talent.
In today’s turbulent economic landscape, hiring top talent as well as engaging and retaining experienced employees are more important than ever.
Times are challenging for HR, especially due to the lack of the right talent and skills and radically different employee expectations. As a result, HR professionals need to adjust their approach.
US employers face the highest skills shortages in over a decade.
The reasons for the talent shortage:
Retiring baby boomers and not enough talent to fill job vacancies and close the talent gap. The majority of baby boomers are forecast to move out of the workforce by 2030. Younger generations aren’t necessarily interested in climbing the corporate ladder. Many millennials are burned out.
Not enough suitable candidates.
Changing needs and expectations of employees who want more from work than a paycheck.
After the pandemic, flexible working is crucial for attracting and retaining top talent. Additionally, workers want to be measured on the value they deliver, not the volume. They also expect to be given the autonomy and trust they need to do their best work.
HR statistics 2023: hiring and recruitment
43% of HR professionals are struggling to hire the right employees, primarily due to “competition from other employers” (SHRM).
Talent shortages in the USA have more than tripled in the last 10 years. 69% of employers are struggling to fill positions, up from 14% in 2010 (ManpowerGroup survey).
The number of applicants per job opening was 29 on average in 2018, 36 in 2017, and 52 in 2016 (Jobvite).
The global talent shortage can reach 85.2 million people by 2030, resulting in the loss of trillions of dollars in economic opportunity for businesses (Korn Ferry). Knowledge-intensive industries will be most affected.
76% of job seekers want to know how long it will take to fill out an application. Candidates don’t want to complete applications that will take longer than 20 minutes (Careerbuilder).
66% of job seekers are ready to wait only 2 weeks for a callback before considering the job a lost cause and moving on to other opportunities (Careerbuilder).
50% of jobseekers declined a job offer due to a poor experience during a hiring process (CareerPlug).
72% of hiring managers believe they provide clear job descriptions. Only 36% of candidates agree (HR Dive).
55% of jobseekers who have read a negative review have decided not to apply for a job at that organization (CareerArc).
For 86% of HR professionals, recruiting is more like marketing (Glassdoor).
The average cost of a bad hire is up to 30% of the employee’s earnings in the first year.
The Department of Labor
HR statistics 2023: salary projections
The current economic recession is challenging. According to a study published by Willis Towers Watson (WTW), many companies are considering layoffs and price increases to increase pay and retain top employees.
WTW’s study included 1,550 companies across various sectors in the USA. Around 28,000 sets of responses were received from companies across over 135 countries worldwide.
Key takeaways from WTW’s study:
Salaries are forecast to increase by 4.6% in 2023, mainly due to high inflation and a tightening labor market.
77% of companies react to inflationary pressures.
75% of companies are struggling to attract or retain talent (even after hiring freezes and mass tech layoffs). This number has tripled since 2020.
70% of companies spent more than expected in the past 12 months (pay budgets rose by 4.2% in 2022).
US wages may climb 4.6% in 2023 (the fastest increase in 15 years). Employers catch up with accelerating inflation and try to retain their employees amid a tight labor market.
Other salary projections and data:
In some industries, base salary increases may surpass 4.5% or even 5% (2022–2023 Salary Budget Survey).
48% of US employers are planning higher year-over-year salary increase budgets for 2023 (Salary.com's Annual National Salary Budget Survey).
Salary increase budgets in the USA rose to an average of 4.1% in 2022, a 20-year high (WorldatWork's Salary Budget Survey).
How to avoid costly payroll mistakes, assess your payroll and identify areas for improvement? Download our FREE guide to learn more!
Thanks to AI and cloud-based solutions, the value of HR software is expected to nearly double within the next decade. That’s why HR departments need to invest in HR technology.
Above all, HR tech and AI help solve multiple problems, reduce repetitive manual work and find talent. Remote work also benefits heavily from using HR software and modern video conferencing technology.
General HR tech statistics and HR data
Almost 60% of businesses use a specific performance management technology such as BambooHR, Kissflow or HR Cloud (HR.com).
44% of CEOs believe AI can help with employee acquisition and retention (Aptitude).
Over 50% of recruiters say AI helps them source, screen, and nurture candidates (LinkedIn).
63% of talent acquisition specialists say using AI has changed the recruiting process. 69% of recruiters report AI helps them find better candidates (Korn Ferry).
6% of companies use AI for recruiting to a “high degree”. 24% responded that they intended to use AI for recruitment to a high degree within the next 2 years (HR.com).
Hiring algorithms outperform humans by 25% (University of Minnesota).
Using hiring algorithms to screen applicants for character traits can drop employees’ compensation abuse by 68% (Richfield Management).
83% of early adopters of AI can expect an increase in return on investment (Deloitte).
45% of companies are still at the beginning of process automation (Forbes).
Only 16% of employers use technologies to monitor employee engagement (Gartner).
Lacking resources and skills is the biggest limitation to using AI technology (IBM).
36% of HR professionals say insufficient technology makes it challenging to automate and improve the organization of onboarding programs (Kronos).
AI technology can predict which employees will leave their jobs, even with 95% accuracy.
Today it’s essential to deliver better experiences for candidates and employees. Thus, HR teams are increasing the number of automations they use for talent acquisition, onboarding, and payroll.
Watch the video below about 11 HR trends for 2023 that will shape the future of HR, including combining automations with humans.
HR automation statistics & HR trends
Repetitive and mundane tasks negatively impact employee retention. Automation reduces manual work and helps with day-to-day employee experiences. It also helps boost employee engagement.
HR bots that can streamline numerous requests and approvals are the most common automation use case for managing employee experience. Additionally, health and wellness-related bots are gaining popularity.
The bottom line: HR automation is on the rise.
AI and automation can help HR and companies:
Improve employee morale and company culture
Predict when a person is likely to leave their job
Attract and keep the right talent
Delight employees and inspire them to produce their best work
HR automation stats (Workato):
HR automations have risen by 235% in a year (599% over the past 2 years).
HR automations make up 11% of the total automations at a company.
The current challenge for many businesses is finding talent who can leverage this technology.
Recruiting automation statistics
Recruiting automations help provide a best-in-class experience for candidates and recruiters by:
Allowing candidates to receive accurate offer letters quickly
Ensuring that interviewers come into interviews feeling prepared
Enabling recruiters to avoid manual, time-consuming tasks
Recruiting automation stats (Workato):
Recruiting automations have risen in adoption (YoY) by 316%.
Slack is usually used for recruiting automations.
Automated offer letter creation is the most common use case (33% share of all recruitment automations).
Interview scheduling saw the biggest YoY rise of any recruitment automation (1,000%).
Employee onboarding automation statistics
Onboarding automations make up 20% of all HR automations (Workato).
Onboarding automations (Workato):
Allow new hires to receive the equipment and applications by the beginning of their first day
Help new hires meet and connect with their team members
Provide new hires with company swag, and more
Payroll and benefits automation statistics
Your employees expect to get paid accurately and on time. Otherwise, no matter the rest of their experience with your organization, they’ll get frustrated and disengaged.
Doing payroll manually may be too risky due to the risk of payroll mistakes and errors. This is where automation can come to the rescue.
Payroll and benefits automation stats (Workato):
Automations around direct compensation make up 47% of all benefits and payroll benefits automations.
Payroll processing has risen the most in automation adoption (YoY), growing by 3,700%.
Nowadays, streamlined HR & payroll processes and a consistent employee experience are essential. Detailed bookkeeping and file tracking systems are important, and technology makes it easier.
First, consider the top 4 HR service providers worldwide (rankings from HRoot):
Randstad ($26.5 billion)
The Adecco Group ($26.2 billion)
Recruit Holdings (22 billion)
ManpowerGroup ($20.8 billion)
Second, consider the top four HR service providers for profitability (HRoot):
Paychex (36.3% operational profit margin)
Paycom Software (30.7%)
Most of these providers have a strong segment for HR management software. Operating profit growth among HR software companies sat at 103.1% on average, the highest compared to other types of HR businesses (HRoot). Many of them are payroll service companies.
To provide employees with greater flexibility and freedom, companies need more robust technology on all fronts, including HR & payroll.
HR & payroll software is necessary because:
There are more and more small businesses and teams.
Teams working independently need more flexibility and more effective HR solutions.
Effective HR & payroll software can help:
Smaller businesses running out of a basement to compete with larger companies.
Larger businesses manage widespread workforces and meet the demands of remote and hybrid work.
HR statistics 2023: employee engagement and retention
Poor employee engagement can result in employee burnout. It can be caused by the lack of:
Meaning at work
Strong leadership and management
The loud layoffs we hear about don’t represent the overall job market. Attracting and retaining the right talent is still challenging for many HR departments and businesses.
Consider these employment engagement statistics and HR data:
Only 36% of US employees (and 20% of global employees) are engaged with their workplace (Gallup).
Businesses with high engagement are 23% more profitable (Gallup).
Highly engaged businesses have 18% fewer turnovers in high turnover organizations (vs. 43% in low turnover organizations) (Gallup).
Over 70% of employees say the quality of the manager/team leader creates more engaged employees (Gallup).
Only 33% of employees are thriving in overall well-being. The remaining don’t find their work meaningful or don’t feel hopeful about the future (Gallup).
3 in 4 employees want more transparency from their company (Paychex).
37% of workers report that personal recognition would encourage them to produce better work (Fortune).
83% of workers prefer to be recognized with praise over a present (OfficeVibe).
84% of HR professionals report recognizing employees increases engagement. 82% say it boosts employee happiness and staff availability (SHRM).
Company culture matters to new hires. 32% of workers would be ok with a 10% salary reduction if they cared enough about their job (Jobvite).
63% of employees say business culture drives organizational success (Eagle Hill Consulting).
For 67% of employees, treating all workers with respect is very important - more important than compensation (SHRM).
Disengaged employees cost companies up to $550 billion per year.
Employee productivity statistics
To improve the company’s bottom line, HR must hire productive employees.
Employee engagement has a huge impact on productivity, customer satisfaction, and sales.
Therefore, engage your full-time employees but also make the most of the productivity that comes with the gig economy (freelance economy / digital platform work).
Freelancers don’t have the institutional knowledge historically held by regular employees, but they represent a new potential in certain tasks. Freelancers also tend to have more productive hours than standard employees.
Consider these employee productivity stats and HR data:
Top performers are 400% more productive than average ones. This gap rises to 800% in the case of more complex jobs (McKinsey & Company).
Engaged employees are 14% more productive. Highly engaged businesses get 18% more sales and 10% higher customer ratings (Gallup).
7% of employees feel productive during regular work hours (FlexJobs).
Freelancers are productive for 36 hours each week (Friday).
50% of employees consider meetings wasted time (Atlassian).
Big decision participation improves employee satisfaction and productivity (ResearchGate).
47% of employees say stress lowers their productivity (breeze).
Average employees are productive for 2 hours and 53 minutes each day.
Download our Gig Economy Guide to get ready for the future of work and new employment trends!
Employee retention is one of the biggest challenges for HR. 1 in 3 hires (33%) will quit within the first year. Among later employees, 3% of them will still quit.
The top reasons why employees quit their jobs include (Work Institute):
Lack of career development (22%)
Lack of support with work-life balance (12%)
Their manager’s behavior (11%)
Unsatisfactory compensation and benefits (9%)
Poor well-being (9%)
The top 3 contributors to employee burnout (Kronos):
Unfair compensation (41%)
Unreasonable workload (32%)
Too much overtime or after-hours work (32%)
Consider these employee retention stats and HR data:
47.2% was the average rate of turnover in all industries in 2021 (Bureau of Labor Statistics).
Organizations that focus on their culture see a 72% lower attrition rate (Gallup).
Almost 30% of new hires quit in the first 3 months of employment (Jobvite).
First-year employees have the highest turnover rate (33%) (Work Institute).
Almost 18% of those who quit say it’s due to the lack of growth, achievement, and security in their career. Other reasons include family or health issues or the lack of work-life balance (Work Institute).
49% of employees who plan to quit their full-time job in the next 5 years would change their mind with their employer if they received a higher salary. 29% would remain longer for better benefits (MetLife).
92% of employees say showing empathy can improve employee retention (Businessolver).
51% of employees would change jobs for one that offers flexible working (Gallup).
Businesses have incurred $223 billion in costs because of turnover linked to company culture over the past 5 years.
Management, performance and training statistics
1 in 5 US employees is uncomfortable when it comes to talking with their manager. (SHRM).
4 out of 10 employees claim their managers don’t frequently engage in honest conversations about work. 36% believe their manager is incapable of leading a team (SHRM).
1 in 4 employees dread going to work. They don’t feel respected and valued at work and don’t feel safe voicing their opinions about work-related issues (SHRM).
Only 60% of employees have a strong understanding of their boss’s expectations. Lack of clarity and communication leads to employee burnout. (Gallup).
89% of HR professionals believe that conducting performance management on an ongoing basis is more effective than yearly reviews (HR.com).
Over three-quarters of employees want to learn new skills (Mercer).
61% of new hires receive no training on company culture (TalentLMS).
68% of workers consider quitting their jobs without support from senior employees (Staples).
Only 34% of HR leaders are investing in workforce learning and reskilling (Mercer).
45% of Millennials say a job that speeds up their professional development is “very important” to them (vs. 31% of Gen Xers and 18% of Baby Boomers) (Gallup).
Organizations that excel at internal mobility (cross-functional training) are 2 times more likely to keep employees (LinkedIn).
58% of those who quit a job due to culture report that managers are the main reason they ultimately left.
Other employment statistics 2023: onboarding, remote work, the future of work
Now we’ll focus on HR trends and HR statistics 2023 on onboarding, remote work, and the future of work.
Onboarding statistics and HR data
53% of HR professionals say employee engagement increases when onboarding is improved (SilkRoad).
Only 1 in 4 companies rate their onboarding programs as “highly successful” (AlliedHR IQ).
Nearly 50% of companies find it hard to define success or failure in their current onboarding process (SHRM).
52% of companies see improved retention rates with good onboarding practices. 60% see better productivity. 53% see improved customer satisfaction (SHRM).
Only 12% of employees think their organization is good at onboarding (Gallup).
19.61% of new hires get no training on company culture (TalentLMS).
93% of workers think a good onboarding process is critical when deciding whether to stay with your company (CareerBuilder).
71% of workers that completed an onboarding process had a clearer understanding of their role (TalentLMS).
It takes new employees up to 8 months to become fully productive.
Remote work statistics and HR data
Over 20% of the American workforce will be remote by 2025 (Upwork).
36.2 million Americans will be remote by 2025 (Upwork).
68% of hiring managers say remote work is going more smoothly compared to the pandemic’s start. As time goes on, remote work is getting easier. Increased productivity and flexibility are key benefits of remote work (Upwork).
Remote opportunities jumped from around 4% of all high-paying jobs pre-pandemic to approximately 9% at the end of 2020 (to more than 15% today) (BLS).
Almost 75% of workers prefer the option of hybrid working to a 10% pay raise (BLS).
2 out of 5 white-collar workers prefer to work from home.
The future of work and new labor trends
77% of executives see the increasing role of contingent working (Mercer).
The labor force is forecast to increase by 8.9 million jobs from 2020 to 2030. However, due to the aging of the baby-boomer population, labor force participation is projected to decline from 61.7% in 2020 to 60.4% in 2030 (BLS).
The labor force participation rate for those 75 and older is expected to rise from 8.9% in 2020 to 11.7% by 2030 (BLS).
Employment in the leisure and hospitality sector will likely increase the fastest (BLS).
Wind and solar-powered jobs will likely be among the top 5 fastest-growing jobs (BLS).
Healthcare and social assistance will add the most jobs by 2030 (totaling around 3.3 million jobs between 2020 and 2030) (BLS).
The retail trade is forecast to lose 586,800 jobs between 2020 and 2030 (the most of any sector) (BLS).
34% of workers believe their jobs will disappear in the next 3 years.
HR statistics 2023: conclusion
Always stay on top of the latest HR and employment statistics and HR trends. HR data will help you:
Attract and retain top talent
Maximize efficiency and profitability
Evolve with the times and get creative
Stay on top of the fast-changing employment landscape
Ready to take your HR to the next level?
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I'm a non-fiction writer, content manager and a passionate digital content creator. I have a huge interest in topics related to employee experience and employment trends in the world of Payroll & HR. I'm also a well-travelled individual with international education and work experience gained in London, Scotland, Poland and Germany. In my spare time I buzz with creative content ideas, including funky rhyming poems.
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