In the quest for sustainable and renewable energy sources, hydrogen is a key player poised to revolutionize industries worldwide. As countries and companies seek to reduce carbon emissions, the hydrogen industry is a beacon of hope for environmental sustainability and a catalyst for profound transformations in the global labor market. But what does the hydrogen economy mean for workers worldwide, and how will it affect the future of employment across sectors?

In this blog post, we aim to explore the extensive impact of hydrogen across multiple industries and spheres in 2024, highlighting its crucial role in the global energy transition and efforts toward achieving a more sustainable and cleaner energy future.

Hydrogen versatility and potential to decarbonize sectors where reducing emissions is particularly challenging make it a crucial element in the global energy transition.

Key industries and spheres impacted by hydrogen:

• Oil and Energy. Hydrogen, a game-changer in the energy industry, is primarily utilized in oil refining, ammonia, methanol, and steel production, which heavily rely on fossil fuels. The transition to clean hydrogen in these sectors holds immense potential for substantial emissions reductions, paving the way for a greener industrial future.
• Transport. The transport sector presents a vast horizon for hydrogen-based fuels, including hydrogen fuel cell cars, trucks, shipping, and aviation. In the automotive industry, the focus is on reducing fuel cell costs and expanding refueling infrastructure. Trucks prioritize reducing hydrogen’s delivered price, while shipping and aviation, with limited low-carbon fuel options, stand to gain significantly from hydrogen-based solutions.
• Construction. The potential for hydrogen in construction includes blending it into existing natural gas networks, which could significantly affect multifamily and commercial buildings, especially in dense urban areas. The direct use of hydrogen in boilers or fuel cells for heating presents a longer-term opportunity.
• Power and heating. As a storage medium for renewable energy, hydrogen offers a way to balance the variability of sources like solar and wind. It can also be used in gas turbines and coal-fired power plants to increase flexibility and reduce emissions.

The impact of hydrogen is felt worldwide, with regional focuses highlighting the tailored applications and benefits it can offer across different geographic areas. From Africa to North America, initiatives are underway to implement hydrogen’s potential, reflecting its global importance and versatility.

Let’s consider the possibilities of using hydrogen in the examples of the companies listed below:

• Advanced Energy
• DTE Energy
• Energy Harbor
• Global Energy Interconnection Research Institute Europe GmbH
• Hitachi Energy 
• Puma Energy
• Siemens Energy
• Shell Energy
• The African Energy Chamber (AEC)

A notable hydrogen-related project for Advanced Energy is the Advanced Clean Energy Storage (ACES) project in Delta, Utah. This initiative is poised to become the U.S.’s largest renewable hydrogen energy hub. The project aims to produce up to 100 metric tonnes of hydrogen per day using water and renewable energy sources. The hydrogen generated will be stored in two vast solution-mined caverns within the only salt dome in the Western U.S., offering a substantial 300 GW energy storage capacity. These efforts support the transition of the Intermountain Power Plant from coal to a combined cycle power system that will utilize a mix of hydrogen and natural gas, aligning with clean energy targets and innovation in hydrogen storage and generation.

The Advanced Clean Energy Storage (ACES) project in Delta, Utah, significantly impacts the local labor market and workforce through its development and operation. Up to 400 local jobs are expected to be created during the project’s three-year construction cycle. Once operational, approximately 25 full-time operators and technical staff will maintain the facility’s 24/7 operation. These jobs are critical to the local economy, creating new opportunities in the emerging clean energy sector.

In addition, the project will contribute to the local economy through property tax revenue collected by Millard County, Utah. These funds are expected to support essential services, including law enforcement, emergency response, infrastructure, and other public services.

DTE Energy made significant strides in hydrogen technology through its Hydrogen Technology Park in Southfield, Michigan. This demonstration facility park includes a hydrogen electrolyzer, compressed hydrogen storage, a dispenser, and fuel cells. An analysis of the park’s operating data and costs indicates that while the facility provides valuable insights into hydrogen technology applications, its current demonstration-stage technologies and costs still need to be competitive in commercial hydrogen, utility-scale energy storage, or hydrogen vehicle markets.

Although the primary function of DTE Energy’s Hydrogen Technology Park is technology demonstration and validation rather than commercial production, it’s a critical step toward understanding and increasing the competitiveness and practical application of hydrogen technologies. The park’s economic analysis highlights the high costs of hydrogen production and the future challenges to make such technologies commercially viable and competitive in the energy market.

As hydrogen technology continues to develop and these initiatives move toward commercial viability, there will likely be increasing effects on the labor market and workforce development, particularly in sectors focused on renewable energy, engineering, and environmental sustainability.

Energy Harbor is actively involved in developing and implementing zero-carbon hydrogen production initiatives. They collaborated with the Department of Energy (DOE) on a pilot project at the Davis-Besse Nuclear Power Plant using carbon-free nuclear energy to produce hydrogen through low-temperature electrolysis (LTE) using polymer electrolyte membrane (PEM) technology. This initiative aims to demonstrate hydrogen production’s feasibility and economic viability for large-scale commercialization.

One study highlighted that the hydrogen sector could create 675,000 jobs by 2035, significantly impacting US employment. These jobs span various sectors of the economy, from manufacturing to construction, supporting the energy economy, and providing jobs for Americans in industries that are making a real difference to the world.

In addition, Energy Harbor is part of the Great Lakes Clean Hydrogen Partnership (GLCH), which partners with Linde, GE Aerospace, Cleveland-Cliffs, and the University of Toledo. This coalition aims to transform the Midwest into a leading center for low-carbon fuels by developing a hydrogen hub that leverages regional resources such as carbon-free nuclear power and a skilled workforce. GLCH’s efforts focus on using clean hydrogen for various applications, including manufacturing, power generation, and transportation, which can significantly benefit the region’s economy and environment.

Global Energy Interconnection Research Institute Europe GmbH (GEIRI Europe) is a subsidiary of the Beijing-based Global Energy Interconnection Research Institute, engaged in research and development related to new energy technologies and smart grids. They are active in the hydrogen sector. They had an opening for a Hydrogen Technology Research Engineer, which involves ongoing research and development of hydrogen-related technologies, including production, storage, distribution, and end-use.

The position requires significant experience and knowledge in the field, as evidenced by the requirement for a Ph.D. in electrochemistry or chemical engineering and experience in hydrogen technology.

GEIRI Europe’s focus on hydrogen technologies can be seen as part of a wider movement towards decarbonization and the energy transition. This movement will likely affect the labor market and workforce in the energy sector by creating specialized jobs requiring a degree and expertise in new energy technologies.

Hitachi Energy has been actively developing hydrogen technology, as evidenced by their recent unveiling of the HyFlex Hydrogen Power Generator. This innovative solution, developed in collaboration with PowerCell Group, is designed for locations where conventional power sources are impractical. The HyFlex generator is a scalable, plug-and-play solution for temporary and permanent installations, providing a clean, emission-free power alternative. It suits various applications, including construction sites, remote venues, data centers, and hospitals. It is expected to be available for temporary deployment by late 2024, with a permanently deployable variant following in 2025. The initiative underscores Hitachi Energy’s commitment to supporting the green hydrogen value chain and advancing a sustainable energy future.

Additionally, Hitachi Energy has played a significant role in Finland’s landmark green hydrogen plant project, underscoring its commitment to green hydrogen technology and potential contributions to Finland’s climate and energy goals. The project aims to strengthen the operational security of Finland’s electrical grid and help maintain competitive electricity prices, further bolstering the country’s industrial competitiveness.

Hydrogen technology, including developing and implementing solutions such as Hitachi Energy’s HyFlex Hydrogen Power Generator and participation in a green hydrogen plant project in Finland, is expected to have significant implications for the labor market. The push for clean hydrogen as part of the future’s decarbonization can create jobs across sectors.

Given Hitachi Energy’s active role in developing hydrogen solutions, such initiatives will positively contribute to job creation and workforce development in their operating regions.

Puma Energy is linked to a major hydrogen project at its former site in Milford Haven, which is expected to be converted into a 20MW hydrogen plant. The project, managed by H2 Energy Ecosystem UK Limited, aims to produce approximately five tonnes of hydrogen daily using clean electricity from UK wind farms. This initiative, planned to be completed as early as 2025, highlights the growing focus on renewable energy solutions and the role of hydrogen in the clean transition. The hydrogen produced is destined for various applications, including industrial use and environmentally friendly transport, which is a significant step towards sustainable energy practices in the region.

With government support, the initiative is expected to create 17 permanent high-skilled jobs, indicating the project’s potential to contribute to the local economy by offering new employment opportunities. In addition, the project’s focus on clean hydrogen production aligns with the global push for clean and sustainable energy solutions, promising local and national economic benefits. The UK’s energy security secretary has highlighted the potential for hydrogen to create over 12,000 jobs and up to £11bn of investment by 2030 across the UK, further highlighting the significant economic opportunities presented by projects such as the Milford Haven project.

The broader impact of hydrogen on the labor market and workforce, including Siemens Energy initiatives, indicates a transformational phase driven by the transition to sustainable energy solutions. However, the direct links between Siemens Energy’s specific hydrogen projects and their impact on the labor market and workforce development, especially in the context of Siemens Energy’s operations, require further investigation.

Siemens Energy’s involvement in hydrogen projects is extensive and global. It aims to revolutionize energy systems with environmentally friendly hydrogen solutions. The projects mentioned, such as the clean hydrogen plant in Wunsiedel, Germany, and collaborations in China, the USA, South Korea, and Air Liquide, represent significant investments in developing and implementing hydrogen technologies. These initiatives are key because of their technological advances and potential to impact labor markets by creating new jobs and skill requirements.

The implications of the hydrogen sector for the labor market in general highlight the growing need for specialized skills and training. The US Department of Energy’s investment in training the next-generation hydrogen workforce and its focus on unions in the $7 billion Regional Clean Hydrogen Hubs program indicate a strategic approach to workforce development in this emerging sector. These efforts aim to ensure that the transition to a hydrogen-based economy includes creating high-quality, sustainable jobs aligned with economic recovery and growth goals in environmental technologies.

Although direct links between Siemens Energy’s hydrogen initiatives and specific labor market outcomes were not detailed in the information provided, the overall growth of the hydrogen sector, supported by public and private investment, suggests a positive impact on job creation and workforce development. Being at the forefront of this transition, Siemens Energy will likely play a significant role in shaping the future labor market by focusing on innovation and sustainability in the hydrogen sector.

Shell Energy is actively involved in various hydrogen projects, reflecting a significant interest in hydrogen’s role in energy transition and decarbonization. Notably, Shell has partnered with Bloom Energy to explore large-scale hydrogen production. They aim to develop solid oxide electrolyzer systems that could significantly affect decarbonizing challenging industry sectors. Shell Energy’s commitment also covers several important areas, including the construction of Europe’s largest renewable hydrogen plant, Holland Hydrogen 1, underscoring the scale of their investment in clean hydrogen production. This initiative is key as it demonstrates Shell’s efforts to meet the growing demand for renewable hydrogen in hard-to-decarbonize sectors such as heavy industry, shipping, and aviation.

In addition, Shell has outlined ambitious plans in its Energy Transition Strategy 2024, highlighting a strategic shift towards more sustainable energy solutions, including significant investment in hydrogen. This strategy is part of their goal to achieve zero emissions by 2050, reflecting the company’s commitment to environmental sustainability and the transition to a low-carbon economy.

Specific figures for employment or job creation are directly because Shell’s hydrogen projects are not available, and the scale and ambition of these projects suggest a significant potential impact. Investments in new technology and infrastructure, such as the construction of large-scale hydrogen plants, inherently create jobs at various stages, from research and development to construction, operation, and maintenance. In addition, Shell’s aim to invest up to £25 billion in the UK energy system, focusing strongly on low-carbon and renewable energy products and services, points to a broader trend towards creating job opportunities in the green energy sector.

This transition to hydrogen and other renewable energy sources supports environmental goals and transforms the energy sector’s workforce needs. As Shell and other companies invest in these technologies, we can expect a growing demand for skills related to renewable energy production, engineering methods, and sustainable development practices, potentially leading to a more diversified and sustainable energy sector job market.

The African Energy Chamber (AEC) is significantly impacting the workforce in Africa through its initiatives, particularly in Namibia, where it’s fostering local content development and capacity building across the energy value chain. Establishing an AEC office in Namibia aims to promote local content and capacity building, a crucial step given the country’s potential for rapid transformation in its energy sector due to recent oil and gas discoveries. The office’s mission includes working with various stakeholders to scale up local talent and capabilities, creating a globally competitive workforce in Namibia.

The AEC’s efforts in Namibia are extensive. They aim to prepare the workforce for the demands of the oil and gas sector and the burgeoning green hydrogen market. The organization works on a supplier development and registration database to ensure that Namibian businesses and service providers are identified, registered, and funded. Furthermore, it is scaling up oil and gas courses, seminars, business mentorship, and partnership programs to foster credible local partnerships.

Beyond hydrocarbons, Namibia’s ambition to become a global green hydrogen hub presents significant opportunities for businesses and service providers across the green energy industry. The AEC is poised to support this through courses, seminars, and partnership programs covering the renewable energy space, positioning the domestic workforce at the forefront of the country’s green hydrogen expansion.

Additionally, the AEC has unveiled a new energy jobs portal for the African workforce, aiming to assist in recovering African energy markets after the COVID-19 crisis. This portal is designed to help local and international companies attract local talent across various skill sets in the oil & gas, power, and renewable energy sectors. It allows all energy companies operating in Africa to post job offers for free, ensuring the offers’ credibility and reducing entry barriers in the job market.

These initiatives underscore the AEC’s commitment to developing a competitive workforce and local content in Africa’s energy sector, contributing to sustainable economic growth and the transition towards green energy solutions.

With the Labor Energy Partnership at the helm, there’s a strong, unified push to accelerate the region’s clean energy economy. This leadership is preserving jobs and economic performance and significantly reducing greenhouse gas emissions. It demonstrates how technology and innovation can be leveraged to save jobs, strengthen communities, and protect the planet, all while prioritizing workers’ rights and quality employment opportunities.

The hydrogen workforce 2024 is seeing significant growth and development, driven by initiatives across various sectors to foster the clean energy transition. Notable developments include the establishment of hydrogen hubs and targeted education and training programs to prepare the workforce for emerging opportunities in the hydrogen sector.

Establishing hydrogen hubs, like the Mid-Atlantic Clean Hydrogen Hub (MACH2), is set to be a game-changer, creating many jobs across the United States. These hubs are about integrating hydrogen production, consumption, and distribution and fostering workforce development in collaboration with academic institutions and industry partners. For instance, the University of Delaware is leading in workforce development for MACH2, working alongside other universities to develop academic programs that cater to the clean energy sector’s needs.

Moreover, the U.S. Department of Energy has allocated funding to support training for the next-generation hydrogen workforce. This includes grants for projects that advance clean hydrogen technologies and educate science and engineering students, particularly at Minority-Serving Institutions. These projects aim to reduce costs in the hydrogen production and usage sectors while exposing students to groundbreaking research and practical experiences in the field.

This attention is driven by its potential as a clean alternative to fossil fuels, offering a promising path to a more sustainable and low-carbon energy future.

Pros

CCS technology, for instance, is designed to capture carbon dioxide emissions at their sources, such as power plants and industrial sites, thereby mitigating greenhouse gases’ impact.

Cons

However, the transition to hydrogen energy and the integration of CCS technology are not without challenges. These include:

• High production and operating costs
• The energy-intensive nature of current hydrogen production processes
• Extensive infrastructure development is required to support widespread adoption.

Despite these obstacles, the growing focus on hydrogen as a critical component of future energy systems highlights its potential role in contributing to global environmental sustainability goals. As research and technology advances, hydrogen power becomes vital in transitioning to a cleaner and more sustainable energy environment.

The world is experiencing an unparalleled increase in hydrogen projects, with an astounding 1,418 initiatives announced globally. Among these, 1,011 projects are set to undergo complete or partial deployment by 2030, reflecting a significant change towards cleaner and more efficient energy sources.

Investors demonstrate their unwavering confidence in hydrogen, as evidenced by the substantial USD 570 billion in direct investments announced for hydrogen projects through 2030. This represents a significant 30% increase, with USD 39 billion already reaching the Final Investment Decision (FID) milestone, a clear indication of the firm commitment to the hydrogen revolution.

The potential of clean hydrogen is further underscored by the ambitious goals set for hydrogen supply. A staggering 45 million metric tons per year (Mt p. a.) of clean hydrogen supply was announced for 2030. What makes this commitment even more compelling is its environmental impact, with 70% of the announced supply being renewable and the remaining 30% designated as low carbon, a significant step towards global efforts to combat climate change.

As we reflect on the current state of hydrogen adoption, it’s noteworthy that 2022 marked a crucial moment with 1,020 hydrogen refueling stations in operation worldwide. Nations like Italy, Germany, and Spain led the charge, signaling a global shift towards embracing hydrogen as a viable energy alternative.

According to insights from the European Commission, the European Hydrogen Value Chain is projected to generate approximately 1 million highly skilled jobs by 2030 and an astonishing 5.4 million by 2050. This underscores hydrogen’s economic potential and highlights its role in fostering a workforce revolution that aligns with the demands of a sustainable future.

To provide a clearer understanding of the workforce implications arising from the surge in the hydrogen trend, let’s explore the specific case of hydrogen’s influence on the chemical and pharmaceutical industry job market. The insights presented below are derived from an analysis of over 450,000 global job advertisements conducted by HRForecast in cooperation with Bundesarbeitgeberverband Chemie (BAVC) and Industriegewerkschaft IGBCE.

Examples of hydrogen in the chemical & pharmaceutical industry

The push for green chemistry and the integration of hydrogen illustrates a commitment to care for the environment while maintaining profitability. The push for blue and green hydrogen as alternatives to carbon-intensive gray hydrogen reflects a broader shift toward sustainable and circular economy practices in the chemical sector.

The pharmaceutical industry is using green chemistry to innovate while reducing environmental impact. Adopting principles of green chemistry, such as the atom economy principle, is helping pharmaceutical companies such as Merck and Amgen develop more efficient and less wasteful production methods. For example, Merck’s development of molnupiravir for the treatment of COVID-19 significantly reduced solvent waste and increased yields, demonstrating the practical benefits of integrating environmental chemistry into pharmaceutical research and development.

Hydrogen’s versatility extends beyond chemical feedstocks, finding applications in various industrial sectors. Because of its low density and high thermal conductivity, it serves as a coolant in large electrical generators, acts as a tracer gas for leak detection, and plays a crucial role in producing methanol by converting carbon dioxide. Furthermore, it contributes to hydrogen peroxide production using more environmentally friendly methods. These diverse applications underscore hydrogen’s critical role in enhancing industrial processes, promoting energy efficiency, and fostering environmental sustainability.

The slight decline in job demand indicates that the primary demand is in industries other than chemical and pharmaceutical companies. Positions important to this trend, such as maintenance and manufacturing, require skills such as catalysis, CAD software, and corrosion control — roles typical in other industries (e.g., automotive).

Let’s take a closer look at each functional area, exploring how the hydrogen trend affects different aspects of business operations:

Administration (0.37%)

Although administration shows a moderate impact, this suggests the need for managerial and logistical support to accommodate the changes associated with hydrogen integration. This may include:

Regulatory compliance. Admin teams may need to comply with new hydrogen production, storage, and distribution regulations. The responsibilities may include documentation, reporting, and ensuring compliance with safety standards.

Organizational changes. As companies integrate hydrogen technologies, administrative roles may be involved in organizational changes, including creating new departments or teams focused on hydrogen-related initiatives.

HR (0.20%)

Human resources may experience relatively little impact, indicating that the hydrogen trend may not significantly change HR practices. However, HR professionals need to support the hiring and training of personnel with specific hydrogen technology skills:

Skill development. Although the impact on HR is modest, HR professionals may need to facilitate skills development programs. This includes identifying and nurturing talent with experience in hydrogen technologies and processes.

Recruitment strategies. HR teams can adapt recruitment strategies to attract people with experience in sustainable technology and the emerging hydrogen sector.

IT (0.22%)

IT departments can implement and manage software solutions related to hydrogen production, storage, distribution, and cybersecurity of hydrogen infrastructure.

Software implementation. IT departments may implement and manage software solutions for hydrogen-related processes. This could include data analytics, control systems, and cybersecurity measures to safeguard hydrogen infrastructure.

Integration with existing systems. IT professionals may need to integrate new hydrogen technologies with existing IT systems, ensuring seamless communication and data exchange.

Maintenance (1.08%)

There is a critical need for skilled personnel to ensure the maintenance and reliability of hydrogen-related infrastructure, including hydrogen production facilities, distribution networks, and related equipment.

Equipment upkeep. Maintenance teams play a critical role in ensuring the reliability and safety of hydrogen infrastructure by conducting regular inspections, performing preventive maintenance, and swiftly responding to operational issues.

Training programs. Given the specialized nature of hydrogen-related equipment, maintenance personnel can undergo special training programs to enhance their skills in handling and servicing hydrogen technology.

Marketing (0.30%)

Marketing has a moderate effect, suggesting that companies may need to adjust their marketing strategies to emphasize their involvement in hydrogen-related projects. The message of hydrogen’s environmental benefits and sustainability aspects can become more prominent in marketing campaigns.

Sustainability messaging. Marketing efforts can highlight hydrogen’s environmental benefits, positioning the company as a leader in green practices.

Educating stakeholders. Marketers could play a role in educating customers and stakeholders about the benefits of hydrogen solutions, promoting a positive perception of the company’s commitment to sustainability.

Procurement (0.55%)

Procurement sees a moderate impact, indicating that there may be changes in sourcing materials and technologies related to hydrogen production.

Supplier relationships. Procurement teams can establish and strengthen relationships with suppliers that offer hydrogen-related components, such as electrolyzes, storage tanks, and specialty materials.

Sourcing sustainability. The focus may be on finding materials with a low environmental impact that aligns with the sustainable development goals associated with the introduction of hydrogen.

Production (1.09%)

Manufacturing will be significantly impacted, highlighting hydrogen’s transformative impact on manufacturing processes. The integration of hydrogen into production processes, especially in industries such as chemicals and pharmaceuticals, requires adjustments to ensure efficiency and sustainability.

Process optimization. Production teams will likely need to optimize manufacturing processes to incorporate hydrogen, ensuring efficiency and reducing carbon emissions.

Integration of hydrogen technologies. Companies may invest in upgrading production facilities to accommodate hydrogen-related technologies, requiring collaboration between production and R&D teams.

R&D (1.05%)

Research and development has a significant impact, highlighting the critical role of research and development teams in advancing hydrogen-related processes and applications. This underlines the increased emphasis on innovation and the development of new hydrogen-related technologies.

Innovation in hydrogen technologies. Groups of researchers and developers will be at the forefront of innovation, developing new technologies and methodologies related to hydrogen production, storage, and use.

Collaboration with production. R&D specialists can work closely with production teams to integrate new technologies into production processes.

Sales (0.27%)

Sales show a relatively modest impact, suggesting that while the hydrogen trend may influence sales strategies, it may not be the primary driver for sales teams. However, companies may need to emphasize the benefits of hydrogen solutions to potential customers.

Highlighting benefits. Sales departments should highlight the benefits of hydrogen solutions to potential customers, emphasizing how these technologies meet sustainability and efficiency goals.

Adapting sales strategies. Sales strategies can be tailored to demonstrate the competitive advantages of the company’s hydrogen-related products and services.

Supply chain (0.85%)

The supply chain will be significantly affected, indicating the need for optimization to ensure the supply and distribution of hydrogen-related materials and products.

Optimizing logistics. The supply chain should be optimized to ensure efficient supply and distribution of hydrogen-related materials and products.

Sustainability in sourcing. Supply chain professionals can prioritize suppliers with green practices, contributing to a more sustainable supply chain.

Interest in hydrogen technology is growing, as seen from the listed professional roles and required skills.

Positions such as process, mechanical, and electrical engineers involve complex participation in the design, operation, and maintenance of hydrogen production and utilization systems.

In addition, R&D engineers, chemists, and research scientists point to significant investments in scientific discovery and innovation to optimize hydrogen processes.

Positions such as laboratory manager and production technician require close supervision and execution of hydrogen-related operations.

Regarding skills

The relevant skills underline the technical breadth required in the hydrogen sector. Mastery in catalysis and electrolysis focuses on the chemical production of hydrogen, while proficiency in CAD software is essential for designing these complex systems.

Knowledge of computational fluid dynamics (CFD) and energy systems indicates the need to model and optimize hydrogen flows and related energy transformations.

Skills in corrosion control and familiarity with hydrogen fuel cells are also critical, highlighting the challenges of material durability and the push for sustainable hydrogen energy solutions.

This article examines the complex interplay among these three areas, highlighting how their alignment can catalyze profound organizational change, promote sustainability, and unlock new opportunities for innovation and competitive advantage.

Strategic financial planning and management are distinguished because they holistically integrate financial aspects into all business decisions, ensuring alignment between financial and strategic goals. Unlike traditional financial planning, which can occur in isolation, this approach requires financial information to inform every aspect of business strategy, from goal setting to execution. It highlights the dual role of finance in managing costs and driving strategic initiatives that drive profitability and growth.

The strategic planning process is how a business determines how to achieve its short- and long-term financial goals. Strategic management aims to ensure a high ROI (return on investment) for the business and its stakeholders in the future.

Strategic financial management is a long-term game. Leaders who embrace this approach may experience losses in the short term, but they are setting the stage for success that can be realized two, five, or even ten years later. This perspective fosters optimism for the future.

A good strategic plan is critical to a business’s direction and success. It is a road map detailing the business’s desired future state and strategies for achieving those goals. The plan should include S.M.A.R.T. (Specific, Measurable, Attainable, Realistic, and Time-bound) goals and potential F.A.S.T. (Frequent, Ambitious, Specific, Transparent) goals, depending on the business context.

However, creating a strategic plan is only one part of the equation; understanding your employees is also critical. Research shows that employees usually don’t fully understand their company’s strategy. For example, less than 33% of senior managers understand the connection between corporate priorities, and most employees have differing views on their company’s strategic initiatives. In addition, many enterprises don’t achieve their strategic goals, and many don’t tie financial budgets to strategic priorities.

An organization’s financial planning use case using an ROI calculator, like the one provided by HRForecast, typically involves assessing the return on investment for specific business initiatives or investments, such as implementing new technologies, hiring strategies, or training programs. Here’s a detailed example focusing on the investment in a new employee training program.

• The primary actor is ABC Corp, a mid-sized enterprise in the technology sector.
• The goal is to assess and maximize the return on investment from a new employee training program that enhances skills and productivity.

Preconditions

• ABC Corp has identified the need for a new training program to keep up with technological advancements and market demands.
• The company can access HRForecast’s ROI calculator and relevant financial and operational data.
• ABC Corp is committed to data-driven decision-making for its investment strategies.

1. Identification of training program and objectives

ABC Corp identifies a specific training program designed to enhance the skills of its software development team. The primary objectives are to improve productivity, reduce errors, and foster innovation.

2. Data collection

The company gathers all necessary data, including:

• Current productivity levels
• Error rates
• Employee salaries
• Training costs
• Projected improvements.

3. Using the ROI calculator

ABC Corp inputs the collected data into HRForecast’s ROI calculator to estimate the potential financial return from the training program.

4. Analysis and decision-making

The company analyzes the ROI calculator’s output, considering the projected financial benefits against the training costs. Based on this analysis, ABC Corp decides whether to proceed with the investment, considering the financial return and strategic benefits.

5. Implementation and monitoring

If the decision is positive, ABC Corp implements the training program, closely monitoring its execution and the initial effects on productivity and performance. The company continues to collect data post-implementation to validate the initial ROI projections.

6. Post-implementation review

After a defined period, ABC Corp reviews the program’s outcomes, comparing actual results against the ROI projections.

The company assesses whether the training met its objectives and delivered the expected financial return, adjusting future training investments accordingly.

As the cornerstone of strategic business decisions, the HRForecast team is critical in providing leadership with data-driven insights. We specialize in using advanced analytics to improve financial planning and analysis (FP&A) outcomes for finance professionals.

We offer state-of-the-art solutions that address the nuanced needs of financial experts, allowing them to explore financial data with unparalleled accuracy deeply.

With HRForecast’s robust analytics suite, financial planners can use real-time data and sophisticated forecasting methodologies. It enables them to provide more detailed analysis, increasing the clarity and impact of information presented to key stakeholders such as board members, CEOs, and CFOs.

Here are some key features the HRForecast solution can help you with.

Planning and budgeting

HRForecast’s innovative approach to using market intelligence significantly improves financial planning and budgeting processes, offering financial advisors a reliable solution for building more informed and dynamic financial strategies.

An example of this strategic foresight is their work with Deutsche Bahn AG, where understanding labor market analytics and future job profiles facilitated proactive financial planning, demonstrating the value of aligning workforce information with financial strategies.

Allowing advisors to model different market conditions and assess their potential impact on financial plans helps reduce risk. It facilitates strategic investment and resource allocation decisions, increasing the adaptability and resilience of financial strategies to market dynamics. Based on the HRForecast project with Deutsche Bahn AG, you can see the practical application of market intelligence solutions in directing budget allocations to essential areas such as workforce development and training, ensuring that organizations are well prepared for future market conditions.

Scenario planning

Scenario planning is a crucial element of the HRForecast toolkit, offering a strategic approach that enables financial advisors and HR professionals to anticipate and prepare for various future opportunities. This ability is vital in human resources and financial planning, where market dynamics, regulatory changes, and strategic investment decisions are critical.

This level of foresight is critical for organizations seeking to maintain resilience and adaptability today.

HRForecast’s smartWork, for example, is a robust and versatile application that facilitates strategic workforce planning and skills management. It includes modules such as smartPlan for strategic workforce planning, smartPeople for skills management, and smartLibrary for information storage, which are integrated into a comprehensive framework. Organizations can use these advanced solutions to align their HR strategies with broader business goals, providing a coherent and flexible approach to addressing future challenges and opportunities.

Cash-flow forecasting

Integrating HRForecast’s advanced analytics and HR strategic planning methodology can significantly improve cash flow forecasting in financial management.

This integration enables financial advisors to make data-driven decisions, benchmark against industry standards and anticipate market changes, optimize cash flow strategies, and support informed investment, spending, and debt management decisions. Understanding workforce dynamics, such as the evolution of job roles and skill requirements, is critical to forecasting long-term financial commitments, ensuring that financial planning is strategic and aligned with broader business goals.

In addition, the techniques demonstrated by HRForecast for analyzing labor market trends and future skills can be directly applied to improve the accuracy of financial forecasting. By combining financial strategies with workforce planning, organizations can more effectively manage payroll, training costs, and investment in new skills, thus maintaining liquidity and promoting sustainable growth.

Benchmarking financial performance against industry peers and integrating strategic workforce information enable companies to identify potential risks and opportunities, ensuring that financial management is proactive and responsive to market dynamics.

Integrating these comprehensive analytics and planning solutions into cash flow forecasting ensures that organizations are better equipped to make strategic decisions by aligning financial management with business and workforce trends.

Cost reduction

Cost reduction in a firm can significantly benefit from strategic workforce management, where the focus shifts from simply cutting costs to aligning cost savings with organizational growth and employee well-being. Sustainable cost reduction strategies can include optimizing workforce planning, improving skills management, and integrating technology to streamline processes without compromising operational efficiency or employee satisfaction.

Additionally, understanding the financial implications of workforce decisions, such as costs associated with vacancies or the return on investment in employee development, can guide more informed strategic actions. It involves leveraging data-driven insights, which could mean analyzing employee performance metrics, tracking cost trends, or studying market dynamics. By focusing on long-term sustainability and making decisions based on these insights, companies can achieve significant cost reductions that support both near-term financial goals and the organization’s future sustainability.

Find out what cost reduction solutions we have offered for:

• Banking
• Aviation
• Automotive
• Transport
• Chemical and pharmaceutical
• Construction
• Telecom
• Insurance

and other industries.

Succession planning

HRForecast provides data-driven insights that are invaluable for business continuity planning. By integrating market intelligence, HRForecast helps these companies identify and develop future leaders by aligning talent strategy with the organization’s long-term goals. It helps evaluate internal and external talent, ensuring diverse and competent leadership. HRForecast can enhance strategic financial planning by offering insight into the financial implications of talent, assisting in risk management, and ensuring business continuity and success.

Expansion plans

A manufacturing company might have a strategic plan to expand its operations into a new market. The financial plan, using the data provided by HRForecast, could include estimating the costs of expansion (building or leasing a new facility, hiring new staff, marketing, etc.), forecasting potential revenues from the new market, and outlining funding sources for the expansion (internal funds, loans, equity financing, etc.).

For example, HRForecast helped IAVs exemplify a meticulous approach to site selection for a strategic software initiative. By analyzing labor market conditions, costs, and competitor areas in potential locations, IAV received comprehensive insights, enabling a fact-based decision to establish a new business location. This approach clarified labor market dynamics and associated costs and offered a comparative perspective on adversaries’ and industry’s presence in the selected locations, fostering a strategic advantage.

Merger and acquisition (M&A)

If a company plans to acquire or merge with another firm, strategic financial planning with HRForecast data can include:

• A thorough valuation of the target company
• Determining the financing method for the acquisition (cash, stock, or debt)
• Forecasting the financial impact of the merger
• Planning for integration costs.

HRForecast stands out in the market with its advanced AI and analytics capabilities. It leverages these technologies to streamline M&A success, offering deep workforce insights for informed decision-making. It identifies skills gaps, aids in talent strategies, and enables scenario planning to foresee integration outcomes. Additionally, its predictive analytics anticipate future workforce trends, helping firms prepare strategically. Thus, HRForecast enhances M&A outcomes through focused, data-driven HR interventions.

Reporting and analytics

Providing finance professionals with advanced reporting and analytics, HRForecast increases the clarity and accessibility of financial data through intuitive visualizations and interactive dashboards. It not only simplifies the delivery of complex information to clients, promoting better understanding and engagement, but it also provides professionals with tools for customized reporting and tracking of key performance indicators, facilitating informed decision-making and strategic planning.

In 2024, the labor markets in Middle Eastern countries such as Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates represent crucial sectors of their economies, mirroring and adapting to global and regional economic fluctuations, labor regulations, and migration policies. These markets are notably influenced by various socio-economic factors, government policies, and especially by the distinct characteristics of the kafala sponsorship system. This system, which predominantly governs labor migration and employment practices in these nations, has specific impacts. For instance, it ties the legal status of migrant workers to their employers, affecting their mobility and rights within the labor market.

Amidst ongoing reforms, the kafala system continues to shape the labor environment in the Middle East significantly. For instance, in recent years leading up to 2024, Saudi Arabia has been at the forefront of significant labor reform initiatives to improve the kafala system. These reforms have a direct impact on over 10 million foreign workers. Similarly, Qatar has also implemented significant reforms to its labor laws, particularly before the 2022 FIFA World Cup. These reforms included the introduction of a minimum wage and eliminating the requirement for migrant workers to obtain exit permits, marking a significant shift in the labor market.

The economic contribution of expatriate workers in the Gulf Cooperation Council (GCC) states is substantial and pivotal to the functioning of these economies. They constitute a significant workforce and play a crucial role in various sectors. For example, in the UAE, expatriates comprise over 80% of the population and are critical in construction, hospitality, and services. In Qatar, migrant workers account for over 90% of the workforce, highlighting their indispensable role in the labor market.

Furthermore, these countries’ labor participation rates and unemployment figures reflect varied economic dynamics. For instance, Saudi Arabia has been working to lower its unemployment rate, which stood at approximately 11% in 2023, by implementing various initiatives under its Vision 2030 program aimed at economic diversification and job creation for nationals. Meanwhile, countries like the UAE maintain relatively lower unemployment rates, buoyed by robust economic diversification strategies and a significant influx of foreign labor.

These dynamics underscore the complex interplay between labor market forces and regulatory frameworks in the Middle East, demonstrating how these markets are intricately tied to broader socio-economic and policy fields.

We’ll discuss this in detail below. First, let’s examine the labor market in some leading industries.

An analysis of the labor market in the Gulf Cooperation Council (GCC) countries shows diverse dynamics in different sectors. Of course, the Kafala system, a sponsorship framework crucial to the region’s labor market, has had a significant impact on labor dynamics, especially regarding migrant workers. The private sector’s dependence on cheap migrant labor, particularly in the construction, hospitality, and transport industries, has established certain expectations among citizens and employers about the nature of work considered acceptable for citizens and not migrants.

In a more specific sector, Saudi Arabia plans to create up to 250,000 new jobs by 2030, focusing on developing its tourism sector to increase its contribution to GDP significantly. This move indicates a strategic shift toward diversifying the economy, reducing dependence on oil, and creating new jobs for citizens.

These industries in the Middle East continue to play a key role globally, with significant activities in oilfield services. For instance, contracts awarded by Abu Dhabi National Oil Company (ADNOC) to increase production capacity indicate ongoing investment in the energy sector. Similarly, agreements between Weatherford International and Saudi Aramco underscore the importance of the oil and gas industry in the region, reflecting an active market with ongoing demand for oilfield services.

In the context of broader economic strategies, Saudi Arabia, in line with its Vision 2030 plan, seeks to diversify its economy to avoid oil dependence. It includes stimulating non-oil sectors of the economy, such as tourism and hospitality, through significant investment in infrastructure and local industries. Saudi Arabia’s financial strategies include emphasizing domestic growth and supporting non-oil sectors of GDP despite fluctuating oil revenues.

Energy sector

The Middle East’s strategic shift towards sustainable development, in anticipation of COP28, clearly illustrates the region’s commitment to environmental responsibility. Countries like the UAE, Saudi Arabia, Oman, and Bahrain have set ambitious net-zero carbon targets. These initiatives impact the energy sector and potentially influence labor markets as they pave the way for new skills and job opportunities in renewable energy and sustainable practices.

10 most demanded job roles in the energy and oil industries in the Middle East

The top 10 most demanded job roles in the energy and oil industries in the Middle East, specifically in the UAE for 2024, include a range of engineering, management, and technical positions reflecting the industry’s focus on innovation, efficiency, and environmental considerations. These roles, along with their monthly salary ranges in UAE Dirhams (Dh), are:

1. Technology expert in robotics and automation
2. Energy engineer
3. Production engineer
4. Data-driven supply chain management professional
5. HR leader
6. Engineering leader
7. Project manager
8. Senior reservoir engineer
9. Senior drilling engineer
10. Senior process engineer

The Middle East’s construction industry is not just experiencing substantial growth and transformation, but it’s also grappling with unique challenges that vary across different countries. For instance, Saudi Arabia strives to adopt sustainable construction practices and attract international expertise to fuel its growth. Adopting technologies like building information modeling BIM is rising, boosting efficiency and planning. However, the industry is not without its share of common hurdles:

• Skilled labor shortage. There’s a critical demand for skilled professionals in engineering, architecture, and construction trades across the region.
• Infrastructure needs. Many countries require substantial investments in basic infrastructure like roads and utilities to support further development.
• Financing. Securing funding for large-scale construction projects is challenging, necessitating innovative approaches like PPPs.

Considering the information from the HRForecast report “Future job roles and skills in Norwegian construction,” the future of the construction sector is increasingly linked to technological progress and skills development. Like its Middle Eastern counterparts, the Norwegian construction industry recognizes the importance of investing in human capital and technology to remain competitive.

Despite its smaller size, Jordan’s construction sector is a powerhouse for its economy, making significant contributions to the GDP and employment. The country boasts a robust domestic construction scene and exports materials globally, showcasing its competitive edge. The Jordan Build trade fair in Amman is a game-changer for the Middle East’s construction industry, serving as a hub for innovation, investment, and collaboration. It exhibits the latest construction technology, fosters partnerships, attracts investment, and facilitates knowledge sharing, playing a key role in the region’s construction industry and economic advancement.

10 most demanded job roles in the construction industry in the Middle East

Based on the recent job listings and industry insights from Bayt.com and Maxim Recruitment, the most demanded job roles in the Middle East construction industry in 2024 include a variety of positions across different sectors of construction.

1. Construction worker
2. Quantity surveyor
3. Senior quantity surveyor / project quantity surveyor
4. Site commercial manager
5. Contracts advisor
6. MEP quantity surveyor
7. Commercial manager
8. Project manager
9. Senior project manager
10. Design manager

Learn about the future of the aviation workforce, including changing roles and emerging trends. Find out how the working environment around the world has changed and how it has affected the aviation sector.

The aviation sector in the Middle East has undergone significant transformations, with major players like Airbus, Boeing, and Lockheed Martin making their mark. Recent developments include substantial aircraft orders from airlines such as Qatar Airways and strategic agreements like the UAE’s acquisition of F-35 jets. Moreover, the emergence of cargo airlines underscores the region’s increasing focus on logistics and connectivity between Asia and the Middle East.

While the commercial aviation sector faces challenges and transformations, the industry’s diversification — spanning full-service airlines, budget carriers, and general and military aviation — presents varied implications for the workforce. Adaptation to new market realities, evolving skill requirements, and the potential for sector-specific growth will shape the employment situation in the Middle East aviation industry.

Despite each country and industry having unique prospects and challenges, the Middle East is witnessing a general trend toward diversification and growth across key sectors. Policymakers and businesses strategically focus on sustainable development, expanding beyond traditional sectors to embrace technology, tourism, and advanced manufacturing. This shift aims to create a more resilient and diversified economic industry, underscoring the region’s adaptability and resilience.

10 most demanded job roles in the aviation industry in the Middle East

Based on the information gathered, here are the top 10 most demanded job roles in the aviation industry in the Middle East in 2024:

1. Cabin crew
2. Pilot
3. Aircraft maintenance engineer
4. Aviation maintenance officer
5. Quality assurance engineer
6. Flight attendant
7. Air traffic controller
8. Aerospace engineer
9. Airport service agent
10. Aircraft engineering technology instructor

The chemical industry in the Middle East is undergoing substantial transformation and expansion, driven by various factors and trends. A key trend is the industry’s heightened emphasis on digitization and artificial intelligence (AI). The sector views investments in digital technology and AI as critical to its future, enhancing productivity, fostering innovation, refining decision-making, and strengthening customer relationships. Despite a minor setback in digital investment in 2023, the industry is projected to bounce back, leveraging AI for research and development, process optimization, and discovering new uses for existing products.

These projects are designed to increase the region’s capacity and capabilities in chemical production, positioning it for the world market.

Furthermore, the Middle East chemical industry is set for a faster growth trajectory than other regional sectors. This is attributed to strategic investments and the expansion of exports, especially in key markets such as China. Technological advancements and the shift towards higher-value chemical production further fuel this growth, positioning the industry for global competitiveness.

Despite these positive trends, there are challenges ahead. Saudi Basic Industries Corporation (SABIC)’s CEO predicted a challenging year for the chemical industry in 2024, hinting at the complexities and uncertainties the sector may face.

While the Middle East chemical industry is poised for growth and transformation, thanks to technological advancements and significant investment, it should also navigate potential challenges and market dynamics. Check out what the demand for jobs and skills directly related to sustainability is developing within the chemical industry. See what you can learn about your industry according to your location.

10 most demanded job roles in the chemical industry in the Middle East

Based on the information gathered from the chemical industry trends and recent job listings, here are ten job roles that could be in high demand within the Middle East’s chemical industry:

1. Chief Scientist, Research, Development, and Innovation (RD&I) center
2. Health, Safety, and Environment (HSE) engineer
3. Sales Engineer
4. Maintenance mechanic – plumbing
5. Engineering manager
6. Process control systems specialist
7. Deputy material manager
8. Specification engineer
9. Senior maintenance engineer – instrumentation & controls
10. Water treatment engineer

In 2024, the hospitality and tourism industry in the Middle East is growing and booming with significant growth and innovation. The scale of these developments is staggering, with new resorts like the Four Seasons at Triple Bay AMAALA and unique projects like NEOM’s Gidori featuring 200 exclusive villas. Saudi Arabia’s $11.2 billion tourism initiative alone is creating 120,000 jobs, and they’re also opening heritage hotels in Jeddah’s Historic District. The UAE aims to welcome 140 million passengers through its airports, and Egypt reported a 6% increase in tourist arrivals. Oman is planning a $2.4 billion mountain destination, indicating robust regional investment in tourism infrastructure.

These efforts are instrumental in enhancing the region’s appeal as a premier travel destination and contributing significantly to its economic diversification and employment generation, positioning the Middle East at the forefront of global tourism.

10 most demanded job roles in the hospitality and tourism industry in the Middle East

The hospitality and tourism industries in the Middle East are undergoing significant transformations and growth, driven by technological advancements, demographic shifts, and economic development strategies. While specific job roles in high demand for 2024 aren’t listed explicitly in the sources I accessed, we can infer the types of roles that would likely be in demand based on industry trends and regional developments:

1. Digital transformation specialists
2. Sustainability managers
3. Tourism marketing specialists
4. Hospitality management
5. Event planners and managers
6. Customer experience managers
7. Cultural heritage tourism experts
8. Health and wellness tourism professionals
9. Adventure tourism specialists
10. Travel tech developers

HRForecast is a key business and workforce partner, offering advanced analytics and strategic insights to transform how industries anticipate and manage human resources challenges. We’ve worked with companies like Siemens, Deutsche Bahn, Lufthansa, Continental, and Merck KGaA by providing innovative applications and data analytics services. We focus on analyzing global market data and strategically planning the workforce. These initiatives address current labor market dynamics and prepare organizations for future changes, helping to create a more adaptive, skilled, and inclusive workforce.

To tie in HRForecast’s potential contributions:

For example, HRForecast implemented predictive modeling solutions for Stadtwerke Düsseldorf, a municipal utility company in Germany, tackling various HR challenges. They efficiently planned the spatial distribution for a new head office, identifying potential savings and optimal space usage. Additionally, the HRForecast performed strategic workforce planning, translating business scenarios into workforce requirements to mitigate risks. The predictive modeling also forecasted labor market trends for specific apprenticeships, aiding recruitment and workforce planning.

• For CMS (law and tax company), HRForecast developed a strategic workforce architecture model, identifying key roles and establishing recruitment and development goals to enhance strategic alignment.
• Kramp (a company that manufactures spare parts and accessories for the agricultural industry) benefited from HRForecast’s optimization of workforce planning, integration of external market data to refine recruitment strategies and workforce distribution, and addressing regional skill shortages.
• HanseWasser (responsible for the wastewater disposal in Bremen) leveraged HRForecast’s big data analytics for long-term planning, identifying future competency gaps, and optimizing recruiting strategies to ensure sustainable workforce development amidst significant retirements.

For example, HRForecast enhanced Wacker Chemie AG’s HR practices by identifying future job profiles and labor market trends, aiding strategic workforce planning. Additionally, for BASF (one of the largest chemical producers in Europe), HRForecast developed a model to predict gender diversity outcomes, enabling targeted initiatives to improve gender balance. These examples demonstrate HRForecast’s capability to leverage data analytics to inform and improve HR strategies, particularly in areas like diversity and inclusion.

A1 (a leading telecommunications company in Central and Eastern Europe) implemented AI-driven learning experiences, offering personalized learning pathways to enhance employee development. For Deutsche Telekom, HRForecast helped develop AI-powered learning journeys that align with individual skills and business needs and foster continuous learning and development in technology-focused areas.

The UK faces an acute technical skills shortage with a gap of 91% and Europe at 44%, which has worsened over the past 4-5 years, exacerbating the challenge of attracting talent. It costs an average of $4,425 to onboard an entry-level employee, and hiring mistakes can cost up to 30% of an employee’s salary. The hiring process takes an average of 42 days, with agencies charging 15 to 30% of an employee’s annual salary, emphasizing businesses with vacant positions.

Obtaining digital skills becomes a near-universal requirement for employees, whatever industry and roles we’d talk about. Digital skills include a vast range of competencies: from using the internet, computers, and software, working with social media and communication tools, to online security, data privacy management, information search skills, and more. 

The demand for digital literacy is unsurprisingly skyrocketing. For instance, in the UK alone, digital skills are listed in 82% of online advertised openings. Openings that require digital skills represent a variety of sectors, including manufacturing, where machining and engineering software skills are in high demand. 

Apparently, while workforce digitalization is essential for organizations, it also breaks new ground for employees: job roles requiring digital literacy are paid higher, help promote career development, and even avoid the risk of automation. For instance, specific digital skills such as design, writing, or communication are difficult to automate and remain critical for business. 

Let’s calculate the cost associated with an empty chair using the example of a tech company based in Germany with annual revenue of €150 million and a talented workforce of 2,500 employees specializing in various tech roles. In calculating the cost associated with an empty seat, Employee Value Cost (EVC) is a key metric used to determine the daily value each employee adds to the company’s bottom line. Let’s break down the calculation and the role of Average Daily EVC in assessing the financial Impact of vacant tech positions.

*The calculations presented below are illustrative examples that offer a general idea. Actual values may vary based on specific circumstances, and the figures should be interpreted as approximations rather than precise representations of individual cases.

In the case of the Tech company example: Average daily EVC = €150,000,000 / 2500 ÷ 230 = €282.61

It indicates that, on average, each employee at the tech company contributes approximately €282.61 to the company’s daily revenue.

Let’s assume that among the 30 tech positions, 50% are currently unfilled. Thus, the cost of an empty seat is calculated as €282.61 × 0.50 ≈ €141.30.

In addition to the immediate visible cost of €141.30 per day for each empty tech seat, there are other indirect financial implications for the tech company, especially when the vacant position requires specific, hard-to-find skills.

The vacancy of specialized positions in the organization can significantly undermine its efficiency and increase costs. Such vacancies disrupt workflow, delay project implementation, increase the workload of existing staff, and require additional hiring and training costs, ultimately affecting the bottom line.

• Lost productivity and efficiency. The absence of essential skills can slow down processes and tasks, reducing productivity and financial losses for the company. Many companies recognize the urgency of closing these skills gaps and implement various strategies to mitigate the problem. Reskilling programs are becoming increasingly popular because they help develop important skills in high demand, such as critical thinking, decision-making, and leadership.
• Project delays, quality impact, and customer satisfaction. When specialized roles are fulfilled, it can prevent project timelines from stretching and jeopardize the output quality. It can lead to additional costs for correcting issues and harm the organization’s reputation, possibly resulting in client dissatisfaction. Skilled professionals often directly impact customer satisfaction and loyalty, especially in roles that interact with clients or influence product/service quality. A vacancy in such positions can lead to diminished customer service, affecting satisfaction and potentially leading to customer loss, impacting revenue. For example, research indicates that businesses that prioritize customer satisfaction can see a significant increase in revenue, with 83% of companies that focus on customer satisfaction also seeing an increase in revenue.
• Training costs for replacement. Hiring new staff for specialized roles often incurs significant training costs to bring them up to the required competency level. This includes formal training programs and the time it takes for the new hires to become fully productive. Comparing, hiring new employees can be costly, with the Society of Human Resource Management estimating the expense to exceed $4,000 per hire, while training an existing employee averages around $1,111 annually.
• Impact on innovation and competitiveness. Skilled professionals are essential for fostering innovation and ensuring an organization’s competitive edge. Their adaptability and response to market shifts are crucial, especially when critical roles are vacant, severely affecting an organization’s innovation and market reactivity. McKinsey highlights the difficulty organizations encounter in hiring and retaining top talent, noting that a vast majority doubt their recruitment efficacy and retention strategies. This talent deficit, particularly in key roles, may lead to innovation stagnation and financial losses as firms struggle to adapt to market alterations. Moreover, comprehensive people development strategies, like effective onboarding and continuous learning, are vital for retaining and nurturing skilled professionals, ensuring organizational resilience and sustained competitiveness.
• Employee morale and turnover costs. Research indicates that increased workloads and responsibilities on existing employees due to the absence of key team members can lead to burnout, decreased morale, and higher turnover rates, which incurs significant costs for organizations regarding recruitment and training. Additionally, such conditions negatively impact team cohesion and performance, exacerbating organizational challenges. These findings underscore the importance of balanced workloads and adequate support to maintain employee well-being and organizational efficiency.

Finding the right candidate requires not only a clear understanding of the role but also the application of innovative strategies that meet the expectations of today’s job seekers. Below, we’ll explain the concepts of “time to hire” and “time to fill” and help you learn about practical methods, from detailed data analysis to state-of-the-art recruitment practices. In the end, you will receive useful information that will significantly increase your hiring efficiency. But first, let’s demystify the difference between time to hire and time to fill and why getting it right can make all the difference for your organization.

“Time to hire” and “time to fill” are pivotal metrics in gauging a company’s recruitment efficiency, illuminating different facets of the hiring process. Though often conflated, understanding their nuances can significantly enhance recruitment strategies.

Time to hire focuses on the candidate’s experience within the recruitment journey. It measures the interval from when a candidate submits their application to when they accept a job offer, providing insight into the speed and efficiency of the hiring process from the candidate’s perspective. On average, in the U.S., this duration is approximately 24 days, as reported by the AIHR. However, some jobs take longer and might take up to 3 months. You might also find the blog post about jobs hard to fill in 2024 insightful.

Time to fill, however, offers a broader view of the recruitment process. It begins when a job requisition is approved or received by a recruiter and concludes when the new hire starts their position. This metric is vital for understanding the overall timeline and efficiency of filling organizational vacancies. The SHRM’s talent acquisition benchmark report shares that the average time to fill in the U.S. is 36 days.

The relationship between these metrics is crucial; time to hire is a component of time to fill, with the latter encompassing the end-to-end recruitment process, including the candidate’s experience and the administrative and procedural timeframes involved in hiring.

• Efficiency and organizational planning. It reflects the effectiveness of recruiting operations and aids in business and workforce planning.
• Talent pool management. Indicates the organization’s capability to attract and maintain a qualified talent pool, impacting overall business success.
• Candidate experience. Offers insights into the recruitment process from the candidate’s viewpoint, highlighting the efficiency of recruitment technology and methodologies.
• Employer branding. A swift hiring process can enhance an employer’s brand, attract top talent, and maintain market competitiveness.

Recruitment dynamics vary widely across different roles and locations. For example, an analysis featured on HR Forecast highlights how tech roles in Silicon Valley might experience a shorter time to hire due to the dense talent pool. In contrast, similar roles in other regions may see extended hiring timelines due to a need for more qualified candidates.

This disparity underscores the importance of a tailored recruitment approach. Strategies that work in one location or for one role might only be effective in some places. Companies in tech-sparse regions might focus more on developing in-house talent or offering remote positions to widen their talent pool.

HanseWerk, an energy network operator, revolutionized its recruitment process by focusing on advanced analytics and targeted recruitment to optimize time-to-hire and time-to-fill metrics. Key to their strategy was enhancing their employer brand and streamlining candidate experiences, significantly shortening the hiring cycle. Their investment in training HR on new recruitment technologies and methodologies further streamlined the process, demonstrating the impact of a strategic, tech-savvy approach on recruitment efficiency.

Understanding and optimizing both time-to-hire and time-to-fill is crucial for achieving recruitment excellence. These metrics reflect the efficiency of your hiring process and impact your ability to plan for growth, manage recruitment costs, and maintain a competitive edge in the talent market.

To accurately calculate the time required to fill a position, begin by identifying the start and end points of the hiring process. The starting point can be when a job application is approved, or a job ad is published. Conversely, the endpoint is marked either by the candidate’s acceptance of the job offer or by the candidate’s first day on the job. To determine the time required to fill a position, simply subtract the start date from the end date, making sure you count the total number of calendar days. Maintaining consistency in tracking these dates is critical to obtaining reliable and comparable data across hiring cycles.

Measuring the time to fill enhances recruitment planning, helps identify process inefficiencies, and realizes potential cost savings. This metric enables organizations to:

• Plan their hiring efforts with greater precision
• Fine-tune onboarding processes for efficiency
• Minimize the financial impact of vacancies.

However, neglecting time-to-fill metrics can burden organizations with significant hidden costs, as long-term vacancies not only reduce apparent savings, but also result in lost productivity, innovation and competitive advantage. Additionally, not having the necessary skilled personnel can impair team effectiveness, project quality, and customer satisfaction, risking a cycle of increased turnover and lost revenue.

Benchmarking your organization’s time to fill against industry or regional averages provides valuable insight into your staffing efficiency. It’s essential to recognize that various factors, including the complexity of the role and the specific industry, can significantly affect the time it takes to fill positions. So, when comparing your performance against these benchmarks, consider these variables to ensure a fair assessment.

Benchmarking time to fill at a more micro level requires a detailed and nuanced data collection and analysis approach. To accurately assess and compare time-to-fill metrics across different roles and locations, you should consider the following data points and factors:

Role-specific data:

• Job title and description: Clearly defined roles and responsibilities help in making accurate comparisons.
• Skill level required: Differentiating between entry-level, mid-level, and senior-level positions.
• Industry and sector: Time-to-fill can vary significantly between industries (e.g., tech vs. healthcare).
• Specialization: Roles requiring highly specialized skills often have longer time-to-fill metrics.

Location-specific data:

• Geographical region: Urban vs. rural areas and specific cities or regions.
• Labor market conditions: Local unemployment rates, skilled professionals’ availability, and talent competition.
• Economic factors: Cost of living, average salary levels, and employment rates influencing job attractiveness.

Recruitment process data:

• Sourcing channels: The effectiveness of different sourcing methods (e.g., job boards, social media, recruitment agencies).
• Application numbers: The number of applicants for the role can influence the length of the screening process.
• Screening and interview process: Number of interview rounds and assessment methods, which can extend the time-to-fill.

Historical data:

• Past benchmarks: Historical time-to-fill data for similar roles within the organization or industry benchmarks.
• Trends over time: How time-to-fill metrics have evolved due to technological changes, recruitment practices, or market conditions.

Outcome data:

• Quality of hire: Tracking the success and retention of hires can provide insights into the effectiveness of the time-to-fill metric as a performance indicator.
• Offer acceptance rate: The ratio of offers made to acceptances can indicate the competitiveness and attractiveness of the offer.

Here’s the forward-looking approach we offer from HRForecast. Understanding and integrating prospective job profiles into your hiring strategy can significantly improve your ability to attract and select the best talent. Here’s how organizations can make the most of prospective job profiles at different stages of the hiring process using HRForecast solutions:

Cultivating an awareness of future skills and adopting a strategic approach to recruitment is critical for organizations seeking to stay ahead in a rapidly changing workforce. By leveraging insights from future job profiles, hiring managers can shift their focus from past requirements to future growth needs, disrupting the traditional hiring cycle. Encouraging a mindset shift to consider potential role evolution aligns talent acquisition with strategic business goals. This approach attracts the right talent and builds the sustainable and forward-looking workforce needed to meet future challenges and achieve the organization’s long-term success. Below, the illustration shows how smartData can help to hire managers to explore future jobs.

Relevance and clarity are key; tailor job posts to highlight technologies and skills critical for the future. For instance, if a future job profile for a data scientist highlights the importance of Salesforce, and your company uses this technology, make it a focal point in your job description. Moreover, aim for conciseness and focus. Since future job profiles may list extensive skills and duties, prioritize those most relevant and attainable in the current job market to ensure your job postings are realistic and targeted.

Job post structure:

• Company overview. Clearly state your mission and values.
• Role description. Detail the responsibilities and required skills.
• Benefits. Highlight what candidates gain by joining your team.

Below we’ve given an example of building a skills taxonomy. To create it, we can break down the key elements mentioned in a structured format that outlines important job components, specifically for the Salesforce-focused data scientist role. Here is an example of how this taxonomy might be structured:

Efficient selection, by focusing on candidates who best match the future job profile, streamlines the recruitment process and improves the quality of hires. This is complemented by skill fit analysis, which identifies candidates with the best alignment to the required skills and future job needs, optimizing the fit between the role and the talent.

Integrating internal staffing allows organizations to maximize the use of resources and reduce costs through existing workforce capabilities. This strategy promotes employee retention and accelerates recruitment because internal candidates are familiar with the company’s culture and procedures.

Strategic use of job libraries is key to creating a structured repository of current and future job profiles, thereby standardizing job descriptions and expectations across the organization. This initiative is key to maintaining alignment and ensuring all roles align with organizational goals and market realities.

An important aspect of this strategy is a thorough analysis of key performance indicators (KPIs), including time to hire and salary benchmarks, further broken down by job title and location. Such metrics offer invaluable insight to set realistic expectations and competitive bids in the job market. Additionally, understanding the nuances of salary trends, job complexity, and specific job demand dynamics is essential to developing competitive and attractive offers that ensure the organization remains an employer of choice.

Defining the necessary digital skills for future roles is becoming increasingly crucial as digital transformation accelerates. This foresight and a proactive approach to workforce planning significantly enhance staffing efforts, enabling organizations to navigate and thrive amid changing industry demands.

Adopting a predictive perspective inspired by HRForecast analytics empowers recruiters to move beyond traditional hiring paradigms. This enriched knowledge base makes it easier to attract and select candidates who can adapt to future challenges and improves recruitment strategies. By skillfully managing job libraries and deploying detailed KPI analytics, organizations can build a workforce that is ready for tomorrow’s challenges and reflects strategic foresight and adaptability, thanks to HRForecast’s expertise.

The journey begins with setting clear objectives for the benchmarking process, such as reducing hiring times and improving the quality of hires. This clarity in goals enables a focused approach to gathering comprehensive data that encompasses all relevant aspects of the role and location. Through meticulous statistical analysis, organizations can identify trends, outliers, and areas ripe for improvement, thereby gaining a deeper understanding of their time-to-fill metrics on a micro level. This granular insight is pivotal for devising more targeted strategies that cater specifically to the nuances of different roles and geographic locations.

Moreover, adopting data-driven recruitment strategies, including integrating artificial intelligence and machine learning, marks a significant advancement in streamlining candidate sourcing and selection processes. By building robust talent pipelines and enhancing employer branding, companies can attract and retain top talent more effectively, thus significantly reducing time-to-fill. These innovative strategies are not mere one-time adjustments but part of a continuous monitoring and improvement cycle, ensuring that recruitment practices remain agile and responsive to the evolving job market.

The essence of these efforts lies in understanding the micro-level nuances of time-to-fill, from industry and role-specific variations to geographic and international considerations. This nuanced understanding enables organizations to fine-tune their recruitment strategies, leveraging detailed data analytics and strategic practices to attract talent within optimal timelines.

Citigroup’s ambitious restructuring strategy, Project Bora Bora, marks a key shift in the bank’s operating paradigm under CEO Jane Fraser. This transformational initiative is characterized by large-scale job cuts, simplifying management structure, exiting several consumer banking markets, and investing in technology upgrades. We’ll take a closer look at the ins and outs of the Bora Bora project, comparing it to industry standards. Ultimately, we will provide analysis and solutions to shed light on the strategic imperatives in the banking sector.

Project Bora Bora signifies a radical overhaul for Citi, entailing the possible reduction of 20,000 positions, strategic withdrawal from specific consumer banking markets, a streamlined management structure, and significant technology investments. These changes reflect Fraser’s vision to mold a more robust and agile Citi, poised to orient in the complexities of modern finance and reclaim its competitive edge. The initiative underscores a broader industry narrative of adaptation and recalibration in response to market demands and regulatory pressures.

It’s not the first time Citi has decided to make big sacrifices. For example, in March 2023, Citi made a significant move by exiting consumer banking in India, transferring 3,200 employees to Axis Bank. This decision reflects the broader strategy under Project Bora Bora to streamline operations and exit less profitable or non-core markets. Such strategic decisions, while potentially beneficial for the bank’s focus and financial health, underscore the challenges of global banking operations and the need for careful management of transitions for both clients and employees.

In principle, Citi is not the first company that dared to make such drastic cuts. Among the big companies were Amazon (cut 18,000 jobs), Google (cut 12,000 jobs), Microsoft (cut 10,000 jobs), Spotify (cut 1,599 jobs), Bosch (cut 1,200 jobs), Sony (cut 900 jobs) in 2023- beginning of 2024. These examples don’t indicate that big cuts are the only solution; they indicate a widespread restructuring environment. They highlight the need for firms to adapt to slower growth and changing market dynamics, with significant implications for employment and corporate strategy.

Below, we’ll review Morgan Stanley’s example.

The ramifications of Project Bora Bora extend beyond mere numbers; they signify a profound transformation in Citi’s organizational ethos and market strategy. While the initiative aims to enhance profitability and market responsiveness, it has sparked internal debates and industry skepticism.

On the contrary, Morgan Stanley’s strategic pivot under James Gorman emphasized wealth management and stable revenue streams, showcasing an alternative path to resilience and growth in 2017.

While both institutions aimed to bolster their market positions and ensure long-term growth, their chosen paths reflect differing priorities and operational philosophies.

• Citi (Project Bora Bora). Citi’s strategy under CEO Jane Fraser, characterized by substantial job cuts and market exits, signifies a sharp pivot towards operational efficiency and cost reduction. The initiative emphasizes streamlining the organizational structure, investing in technology, and focusing on core, high-margin business areas. This approach aims to enhance profitability and stock performance, yet it affects employee morale and corporate culture.
• Morgan Stanley (Under James Gorman). Conversely, under James Gorman, Morgan Stanley adopted a strategy that concentrated on diversifying income sources and stabilizing revenue through an expanded focus on wealth management. By investing in and growing this less volatile business sector, Morgan Stanley aimed to create a more resilient revenue base, less susceptible to the fluctuations of investment banking and trading sectors.

• Citi: The extensive job reductions and structural overhauls at Citi likely led to significant internal uncertainty and morale challenges. While such changes can drive efficiency and financial improvement, they also require careful management of employee perceptions and engagement to prevent a decline in productivity or talent attrition.
• Morgan Stanley: Morgan Stanley’s emphasis on wealth management was less about drastic cost-cutting and more about growth and investment in a sector that promises steady, long-term returns. This approach presented a more stable employment environment and fostered better employee morale and retention, contributing to the company’s overall resilience.

• Citi: Project Bora Bora aims to boost Citi’s market valuation and appeal to investors by demonstrating decisive action to improve margins and profitability. However, the success of such strategies often depends on their execution and the market’s response, particularly regarding how effectively the bank can translate these changes into sustained performance improvements.
• Morgan Stanley: Morgan Stanley’s strategy has been positively received regarding its financial stability and growth in wealth management. This approach has diversified Morgan Stanley’s revenue streams and enhanced its reputation for strategic foresight and prudent risk management, likely contributing to stronger investor confidence and stock performance.

Within Citi, the absence of a permanent investment banking head and upcoming changes in the equities and wealth management divisions signal a period of uncertainty and transition. Fraser’s approach —realigning senior banking roles and maintaining key personnel — aims to stabilize and stimulate market share expansion amidst these shifts.

Considering the findings of HRForecast opens a critical view of labor market dynamics and strategic personnel management in the banking sector. For example, the analysis of risk management in banking outlined in March 2023 highlights the need for careful risk management and strategic workforce planning during turbulent times. HRForecast advocates for a holistic HR strategy that responds to organizational change, focusing on communication, talent retention, and adaptive leadership.

For a bank like Citi, this transformation is underscored by its significant investment in advanced technology infrastructure, a key step toward a more efficient and data-driven operating model. Integrating Generative AI (GenAI) technologies into Citi’s data processing system is particularly noteworthy. GenAI frees data professionals to spend more time on strategic analysis and innovation by automating routine tasks like data cleansing and preparation. This automation extends to predictive analytics, which enhance the bank’s predictive and decision-making capabilities and are critical to risk management and customer engagement.

While Citi focuses on profitability, integrating technologies such as GenAI opens up the opportunity to mitigate significant job cuts while offering a more sustainable approach to restructuring. Emphasis on incremental technology adoption, market orientation, and employee engagement can shape a more holistic strategy, improving Citi’s operational efficiency without compromising workforce stability. This approach aligns with the broader need for strategic reskilling and workforce optimization, where automation serves as a cost-cutting solution and a catalyst for organizational evolution and talent development.

• Automation potential across jobs. HRForecast has analyzed over 4,500 jobs, identifying specific automation percentages, like how lawn mowing in gardening can be automated by 10-20%.
• Department-specific automation. Different departments can leverage automation to varying extents, offering nuanced integration strategies.
• Workforce optimization. Detailed automation data aids in addressing workforce shortages, demographic shifts, and strategic hiring, pinpointing areas where automation can replace or augment human efforts.
• Strategic reskilling. Identifying roles at risk due to automation enables strategic upskilling-reskilling-cross-skilling or transitioning employees to areas less susceptible to technological displacement.

Adopt these insights if you want to refine your strategies to balance market participation with technological integration, focusing on sustainability and employee retention.

Companies are trying to establish job libraries and align them with corresponding skills. In addition to constructing skill libraries, which involve developing a common language for discussing skills, these companies encounter challenges filling specific vacancies. The swift changes in technology, the economy, and society further complicate this task. A Business Insider article shed light on the jobs predicted to be the hardest to fill this year, highlighting the urgent need for companies to adapt their hiring strategies. We also analyzed the HRForecast database and looked at which vacancies will be difficult to fill this year. Contrary to the common belief that only blue-collar or truck driving positions are hard to fill, management and specialized roles are also increasingly difficult for staff.

In the following sections, we’ll review the roles identified by Business Insider as particularly challenging to fill. We expand our analysis with hard-to-fill jobs sourced from the HRForecast database. We will also explore strategies for improving recruitment pipelines, cost optimization, and strategic workforce planning. But first, let’s see why there are challenges in filling specific job roles for 2024.

Thus, the recruitment area for companies in 2024 is likely to be influenced by several key factors, each with the potential to impact their strategies and plans significantly. Here are some of the most pivotal elements:

• Economic conditions. Economic conditions significantly impact recruitment strategies, with growth, inflation, and unemployment as key drivers. During economic expansion, some companies may increase hiring to meet rising demand. However, high inflation requires adjustments in salary offerings to maintain the attractiveness of positions, compensating for the diminished purchasing power. Conversely, high unemployment rates can lead to a larger pool of job seekers, but overhiring in optimistic times can force layoffs during downturns. Therefore, organizations should navigate these economic uncertainties with agility, employing flexible work arrangements, investing in employee skills development, and regularly adjusting salaries to remain competitive and resilient in varying economic climates.
• Technological advancements. The rapid pace of technological advancement, particularly in artificial intelligence (AI), machine learning, cybersecurity, and data analytics, is reshaping the labor market and demanding that companies adapt their workforce to remain competitive. A McKinsey report highlights significant occupational shifts and projects’ continued change because of digitization and healthcare demand. It suggests that roles requiring advanced digital skills may be hard to fill due to a shortage of qualified candidates, leading companies to invest more in sourcing talent with necessary tech skills or upskilling their current employees.
• Diversity, equity, and inclusion (DEI). In 2024, the emphasis on Diversity, Equity, and Inclusion (DEI) in the workplace is set to intensify, with companies recognizing its critical role in fostering innovation and mirroring the diverse global customer base. The challenges in implementing DEI strategies for specific job roles are multifaceted, encompassing the need to adapt to changing societal norms and legal requirements and ensuring a workforce that reflects global diversity. Addressing these complexities necessitates innovative recruitment, retention, and workplace culture practices to ensure equal opportunities for all candidates.
• Sustainability and corporate social responsibility (CSR). Sustainable development and corporate social responsibility (CSR) pose challenges in filling specific positions for 2024 due to the increasing complexity and specialization of skills required in these areas. For example, the chemical industry is evolving into sustainable practices; there is a growing demand for professionals with expertise in environmental chemistry, environmental regulations, and sustainable supply chain management. This demand exceeds the current supply of qualified candidates, making it difficult for companies to find the right talent to meet their sustainability goals.
• Changing demographics. The aging workforce in many countries, coupled with the entry of Generation Z into the job market, is shifting the demographics of the labor pool. Companies should adapt their recruitment strategies to appeal to a broader range of candidates, considering differing values, expectations, and working styles.
• HR challenges and talent scarcity. HR is evolving, with talent, economic, and supply chain issues continuing to present challenges. The phenomena such as the Great Resignation and the need for talent development highlight the importance of strategic talent management. This environment suggests that roles critical for talent acquisition and development may be particularly challenging, emphasizing the need for organizations to adapt to the changing framework.
• Workplace transformation. Gallup’s research indicates that workplace engagement and well-being are more influenced by how employees are managed than their work location. This shift in work dynamics, coupled with increased job responsibilities and restructuring, indicates that roles requiring adaptable management and leadership skills may struggle to fill as employers and employees navigate these new expectations.

A recent Business Insider analysis highlighted ten jobs expected to be particularly difficult to fill in 2024. These roles cover various industries, highlighting the diverse knowledge and skills in demand. From skilled social workers who provide critical support in communities to cybersecurity experts tasked with protecting digital assets in an increasingly online world, the list reflects today’s workforce’s changing priorities and challenges.

10 roles employers may struggle to fill in 2024 according to Business Insider

1. Qualified social workers
2. Multi-skilled maintenance engineers
3. Quantity surveyors
4. Cyber security experts
5. Energy/carbon managers
6. Engineering project managers
7. Special educational needs teaching assistants
8. Credit controllers
9. Newly-qualified accountants
10. Supplier relationship managers.

The HRForecast team analyzed job vacancies presented by Business Insider to determine their difficulty filling them. We aimed to establish a correlation with the results published above. Based on the research results, the hiring process for the above vacancies can last up to three months, making them difficult to fill in the company. These roles are spread across different sectors, illustrating the dynamic nature of employment needs in the current labor market. In addition to the ten occupations identified by Business Insider, we’d like to highlight additional careers that are expected to be in high demand:

• Project engineer
• Accountant
• Social worker.

These professions are expected to be pivotal in meeting the evolving demands of the workforce, underscoring the importance of adapting recruitment strategies to address these critical needs.

Our findings reveal an average hiring timeframe of about three months for these positions in the United States, aligning with external sources and underscoring the accuracy of our data.

The insurance industry stands at the forefront of global economic stability, offering crucial services that protect individuals and businesses against financial loss. HRForecast has identified a list of roles within the general sector and the insurance industry that employers are likely to find difficult to fill. This difficulty stems from a combination of factors, including the need for niche expertise, the competitive nature of the job market, and the specific demands of these roles. The following analysis provides a deeper dive into these roles, offering insights into why they are in high demand and the implications for the industry.

This synchronization between our data and external sources underscores the reliability of our findings:

1. Investment analyst
2. Risk management specialist
3. Investment risk analyst
4. Investor relations manager
5. Legal specialist
6. Underwriter
7. Investment manager
8. Actuarial specialist
9. Trading analyst
10. Insurance claims specialist

Particularly, positions such as investment risk analyst, actuarial specialist, and insurance claims specialist are projected to be particularly challenging to fill, with hiring durations extending beyond three to four months. It highlights the specialized nature of these roles and the critical need for skilled professionals in the insurance sector.

The analysis of these lists reveals critical insights into the evolving job market and the sectors that are anticipated to face talent shortages in 2024. It underscores the need for strategic actions from multiple stakeholders, including employers, educators, and policymakers, to address these gaps through targeted training, recruitment strategies, and policy adjustments. As the job market continues to evolve, staying ahead of these trends will be crucial for maintaining economic stability and growth.

For stakeholders looking to understand the intricacies of hiring trends and challenges within the insurance sector, HRForecast offers an invaluable resource. By leveraging our data, industry professionals can better prepare for the demands of the labor market, ensuring their companies remain competitive and resilient in the face of change.

Organizations should adopt a comprehensive and strategic approach to excel in challenging job roles. It involves diversifying the talent search, enhancing the employer brand, optimizing job descriptions, offering competitive compensation, refining the interview process, committing to talent development, fostering diversity and inclusion, leveraging external expertise, embracing the global talent pool, and maintaining engagement with candidates. Here’s how to do it effectively:

• Commit to talent development. smartPeople provides a platform for skills management and talent mobility, enabling you to develop internal talent for hard-to-fill roles. By offering continuous learning opportunities and upskilling initiatives, you attract candidates interested in growth and ensure your workforce is future-proof.
• Expand your talent search. Use smartData to gain insights into global workforce trends and identify the best locations for sourcing skills relevant to your business. This allows you to expand your talent search more strategically, leveraging data-driven insights to post job openings in channels most frequented by your ideal candidates.
• Elevate your employer brand. Utilize the data from smartData to highlight how your organization is ahead in adopting future-oriented business and operating models and showcase your commitment to developing future-proofed skills within your team. Sharing success stories and testimonials can now include how data-driven decisions have positively impacted your workforce and organizational growth.
• Optimize job descriptions. Leverage insights from smartData to understand evolving job roles and required skills, ensuring your job descriptions reflect the true nature of the role and highlight the skills that are in demand. This makes your job postings more attractive and relevant to potential candidates.
• Offer competitive compensation. Use smartData to benchmark your compensation packages against global standards and industry trends. This helps in offering competitive compensation packages that are attractive to top talent, including benefits and flexible work arrangements aligned with future workforce expectations.
• Refine the interview process. Incorporate smartPlan automated gap-closing proposals to identify specific skills and competencies that candidates must demonstrate, making your interview process more focused and efficient. This ensures a thorough evaluation of both technical and behavioral aspects.
• Foster diversity and inclusion. Utilize smartData to understand workforce trends across different demographics and incorporate these insights into your diversity hiring initiatives. This ensures your job postings and overall recruitment strategy are inclusive and appeal to many candidates.
• Leverage external expertise. Use the insights from smartData and smartPlan to work more effectively with specialized recruitment services, ensuring these agencies are aligned with your strategic workforce planning and are targeting the right talent pools based on data-driven insights.
• Embrace remote candidates. smartData’s insights into global hot spots for specific skills and job profiles enable you to tap into a global talent pool more effectively, making the case for considering remote candidates stronger by highlighting the benefits of a diverse and globally distributed team.
• Engage and feedback. Employ smartPeople to inform candidates about their application status and provide constructive feedback. This platform can help create a positive experience for candidates by ensuring they are engaged and informed throughout the recruitment process.

By integrating smartData, smartPlan, and smartPeople into these strategies, your organization can enhance its recruitment and talent development efforts with a data-driven, strategic approach aligned with future workforce trends and requirements.

The integration of generative artificial intelligence (GenAI) into the labor market necessitates a dynamic approach to workforce management, highlighted by the February 2023 Global Labor Market Insights report. This report, leveraging the HRForecast database, examines the impact of technologies like ChatGPT on job postings worldwide, revealing year-on-year growth and variations across regions such as Europe and North America. Industries like healthcare and IT are pinpointed for high demand amidst a broader range of job types affected by shortages.

In response to these challenges, tools like smartLibrary emerge as essential strategic assets for workforce planning. Powered by real-time market data, smartLibrary offers comprehensive insights through accurate benchmarking data for time-to-fill job roles. It enables organizations to make informed decisions about talent acquisition, skills development, and future workforce needs. As businesses face the complexities of AI-induced labor shortages and surpluses, smartLibrary represents a critical advancement in adapting to the evolving labor market shaped by GenAI. But first, let’s consider the general situation in the labor market and GenAI.

The report predicts that GenAI will boost productivity and change job roles over the next 10 years. Still, this surge will come at the cost of short-term layoffs and a slowdown in hiring in many white-collar occupations as employers adjust to the new reality.

According to the report, early adopters of GenAI will see increased productivity through automation, expansion, or role transformation — a surge in production that will outstrip demand, leading to overstaffing in many industries.

While these disruptions will result in high human costs, they will likely be temporary. Corporate profits will increase due to lower wage costs, leading to new jobs to fill some of the lost jobs and lower prices for goods and services.

While GenAI may initially lead to job losses in certain sectors and occupations, other sectors will grow as the economy adapts.

Specific industries and roles likely to be affected include:

Administrative and support roles

Administrative and support roles are experiencing a decline due to automation, and GenAI anticipates further expediting this trend by automating and enhancing tasks within these professions.

Nevertheless, HRForecast data highlights the significance of the administrator role for operational efficiency in organizations demonstrating consistent job growth. Notably, there has been a 19% increase in demand for administrative roles over the past 12 months, primarily driven by integrating new skills that are still part of the automation wave. These roles continue to exhibit stable skill requirements and are positioned at a lower level of wages, ranking 144th in terms of compensation.

Among new skills you can find:

• Data entry
• Data analytics
• Data administration
• Database management
• Resource management

Financial services

Roles within this sector will substantially transform because of GenAI’s capabilities to automate complex, data-driven tasks.

For example, demand for finance specialist positions has increased by 5% over the past 12 months, indicating steady job growth in the finance and control sector. It ranks highly for hiring speed, ranking 9th out of 232, with an average time to hire reduced by 67% to 23 days, indicating an urgent need for these professionals. Despite steady job complexity and little shift in skill requirements, pay remains at the bottom, ranked 191 out of 232. This position offers fast-track employment opportunities for those entering the finance industry, albeit with a lower starting salary.

Among new skills you can find:

• Billing systems
• Finance management system
• Financial analysis
• Forecasting methods
• Business management

Business and legal services

Legal professionals, including those involved in contract review, litigation support, and other areas, may see their work automated or augmented by AI technologies.

Demand for the Legal Affairs Manager position, critical to ensuring an organization’s compliance with legal requirements, has grown by 52% over the past 12 months, ranking 20th out of 121 positions in the Legal & Compliance family. Despite slow skills growth and an 8% decline in digital skills requirements, this occupation remains vital, with an average hire time of 30 days. Regarding salary, it ranks lower, ranking 79th out of 121 jobs. The advent of GenAI opens up opportunities to improve the efficiency of legal research and document preparation, suggesting a future where legal managers can use technology to streamline operations while focusing on strategic decision-making and compliance.

Among new skills you can find:

• Legal tech proficiency
• Data privacy and security knowledge
• AI ethics and governance
• Digital literacy
• Analytical thinking and innovation

Marketing

Roles such as marketing researchers that involve data analysis and strategy formulation could be heavily impacted by AI-driven automation and augmentation.

Marketing research professionals are key in developing data-driven marketing strategies, focusing on customer and market analysis to guide business development. The position is ranked 81st out of 130 in demand in the marketing sector, with growth of 3% over the past year and an average hire time of 28 days. This position is undergoing dynamic changes, particularly with reduced job complexity and demands for digital skills. This shift has been largely driven by GenAI, which is revolutionizing the profession by automating data analysis and improving customer insights, requiring new skills to integrate AI and interpret data.

Among new skills you can find:

• Data collection
• Data-driven marketing
• Digital marketing
• Marketing research
• Marketing research tools

Writing and editing

GenAI’s ability to generate written content could transform the labor framework for writers and editors, automating some aspects of content creation.

Influenced by GenAI, the content designer role shows a nuanced job market within the art, design, and entertainment sectors. Despite a slight 4% decline in demand, ranking 75 out of 126 for job growth, it boasts a rapid hiring process (14th fastest with an average of 25 days) and a high salary (ranked 36th). The role’s skill evolution is slow, with a 14% change in the past year and a modest 7% increase in digital skill requirements, indicating a stable job complexity but a growing need for GenAI proficiency. This reflects a competitive yet lucrative field where adaptability to technological advancements remains key.

Among new skills you can find:

• GenAI literacy
• Technical proficiency
• Data literacy
• Ethical considerations and bias awareness
• Innovation and experimentation

Graphic design

The creative process in graphic design could be augmented by AI, affecting designers’ roles by automating routine tasks or enhancing creativity.

Despite a stable job market, the graphic designer job is ranked 77th out of 126 in demand for art and design, with a 6% drop in job demand over the past 12 months, with the hiring process improving significantly, now ranging from 7 to 62 days. Skill requirements and job complexity remain stable, indicating continued demand for digital design skills. The emergence of GenAI introduces new tools and techniques, offering opportunities for efficiency and creativity in design processes. Graphic designers should adapt to these technological advances to remain competitive and innovative in their field.

Among new skills you can find:

• Graphic design software
• AI literacy
• Technical proficiency with design software
• Color theory
• Sustainable design

Computer programming

While programming is a creative and complex task, aspects of code generation and testing could be augmented or automated by GenAI.

For example, the data engineer job has seen steady job growth, with demand increasing by 3% over the past 12 months, and is ranked 159th out of 284 in-demand IT jobs. Hiring is balanced, ranking 150th fastest in the IT sector, while skills requirements remain stable, indicating continued job complexity and the need for digital skills. Salaries for data engineers are high, ranking 77th out of 284 IT roles, reflecting the significant value and experience these professionals bring to managing large volumes of data.

Among new skills you can find:

• Data warehouse
• Big data
• Cloud Computing
• Data governance
• Data integration

HR

Human resources roles may transform completely, with GenAI automating routine tasks and reorienting HR professionals towards more strategic functions.

For example, the HR director has a 26% increase in demand over the last 12 months; the position ranks 27th out of 50 in the HR job group with the highest demand and 29th in the fastest hiring speed with an average time to hire of 28 days — a 49% decrease than last year. Despite the changing dynamics of the workplace, the skill set for HR directors has remained relatively stable, changing only 11% over the past year, highlighting the steady complexity of the job and the demand for digital skills. Ranked 4th out of 50 in the HR profession family, the high salary reflects the significant value that HR directors bring to their organizations.

Among new skills you can find:

• Employee Performance Management System
• HR analytics
• HR software
• Data interpretation
• AI-driven recruiting

Below, we focus more on the varying degrees of impact of AI on the workforce, distinguishing between strong, low, and moderate impacts on different job categories, particularly how AI can create a labor surplus in some areas while mitigating shortages in others.

The McKinsey report on the impact of GenAI on the German labor market highlights several key insights:

• Skilled labor shortages. Germany faces significant skilled labor shortages, exacerbated by a 5-fold increase in businesses reporting such shortages since 2009. Open positions have quadrupled between 2004 and 2022.
• GenAI’s role. GenAI is a pivotal solution, offering substantial productivity potential in manufacturing, workforce training, healthcare, business, legal, and STEM sectors. It promises to mitigate labor shortages by enhancing efficiency and innovation.
• Education and wages. The report identifies education (especially tertiary and high school levels) and high-wage areas as having the highest potential for labor shortage mitigation through GenAI adoption.
• Upskilling and talent attraction. Emphasizing the importance of upskilling and attracting the right tech talent is crucial for the public and private sectors to leverage GenAI effectively.
• Germany’s GenAI sphere. Germany has a promising marketplace for GenAI adoption, boasting many GenAI startups and a significant presence in computing power, academic publications, and patents, which positions it well for leadership in Europe.
• Operational and skill requirements. The success of GenAI adoption in mitigating labor shortages hinges on creating the right operating environment and ensuring the availability of necessary skills within the workforce.

Besides Germany, there is particular interest and demand for GenAI and ChatGPT-related roles in countries such as the United States and India, highlighting the gradual integration of this technology into the global labor market.

AI requires a closer look at how businesses and sectors can manage these changes. By leveraging benchmarking data, organizations can gain valuable insight into the dynamics of changing job roles, enabling them to make informed decisions about talent management, reskilling initiatives, and hiring strategies. Let’s look at how GenAI is changing the workforce, highlighting the importance of human skills in roles less affected by automation and the continued need for professionals in fields where AI enhances, not replaces, human experience.

In areas where GenAI has a high impact, there’s a noticeable creation of labor surplus. Professions like:

• Business and financial analysts
• Office and administrative support staff
• Web developers
• University professors
• Economists
• Writers
• Editors
• Journalists are experiencing a shift.

AI’s ability to automate complex tasks and analyze large datasets supplements human capabilities, reducing the need for HR in these roles. Benchmarking data on the time it takes to fill these positions can guide businesses in anticipating surpluses and planning for reskilling programs to redeploy talent where it’s needed most.

Mitigating shortages in specialized roles

Conversely, GenAI also mitigates labor shortages in certain specialized fields, such as information security, speech-language pathology, law, actuarial science, and data science.

Here, benchmarking data can help organizations understand the urgency of filling these roles and the competitive opportunity of the job market, ensuring that they allocate appropriate resources to attract and retain top talent.

Human skills remain indispensable in roles where AI has had a low impact.

• Construction workers
• Repair technicians
• Laundry and dry-cleaning workers
• Sewing machine operators.

These professions are insulated from AI effects primarily because they require manual dexterity, physical presence, or skills that AI cannot replicate. Despite the low impact of AI, these areas may still face labor shortages because of other factors, such as an aging workforce or lack of interest among younger generations. Precise benchmarking data is crucial for pinpointing shortages and developing targeted recruitment strategies.

Persistent shortages in essential services

• Healthcare practitioners
• Support staff
• Skilled tradespeople
• Social workers
• Childcare workers.

These professions remain in high demand, with shortages persisting despite technological advances. These roles often require high emotional intelligence, empathy, and human touch — attributes AI cannot fulfill. Accurate, role-specific, and location-specific benchmarking data for time to fill these positions can provide insights into the severity of shortages and help health services and other sectors prioritize recruitment and training initiatives.

The strategic planning for workforce development, identifying where AI can be leveraged to address labor shortages, and where human workers are still crucially needed. It also highlights the potential impact of AI on employment and the labor market, showing which sectors might see job reductions or require fewer new entrants due to AI adoption.

The crux of smartLibrary’s utility lies in its ability to provide a forward-looking analysis of profile evolution. As AI reshapes job functions, smartLibrary helps organizations anticipate how profiles will evolve and determine the upskilling needs of their workforce. It answers critical questions such as the potential for automation and where the biggest savings can be realized without compromising efficiency or quality.

smartLibrary is a database that stores a collection of jobs, skills, and training. It is a large and constantly updated library, making it a dynamic, market-driven source of information. All job, skills, and training records are cataloged and managed here.

The job standardization process allows for clear communication of job titles and responsibilities and having a single title for the same positions. Adding skills to a job in smartLibrary allows you to map the responsibilities of each position accurately. In turn, the educational library offers a rich selection of various training for smartPeople users.

In strategic workforce planning (SWP), smartLibrary provides organizations with the means to plan effectively using a common jobs and skills language. This shared lexicon facilitates better communication and alignment within the organization regarding workforce needs and strategies. Companies can use smartLibrary to:

• Analyze the company’s potential evolution of job roles, considering AI’s high or low impact.
• Identify upskilling needs to transform labor surpluses into productive assets.
• Locate areas where AI can mitigate labor shortages and align training programs accordingly.
• Assess the cost-effectiveness of different recruitment strategies in the context of AI’s influence on the labor market.

Integrating smartLibrary with benchmarking data for enhanced decision-making

When combined with accurate benchmarking data that provides time-to-fill metrics at a micro-level, smartLibrary’s insights become even more actionable. Organizations can predict how roles will change and how long it will take to fill these evolving roles in various locations. This integration allows for a comprehensive understanding of labor market dynamics’ qualitative and quantitative aspects.

A skills-based organization prioritizes the abilities and competencies of its workforce over traditional metrics such as tenure, job title, or education level. In these organizations, the emphasis is on identifying, nurturing, and deploying skills to align with their strategic goals.

Let’s start off with an example: Continental, a leading German automotive manufacturer, implemented the “Big Data for Best Fit” project to align its workforce’s skills with future business needs using machine learning and strategic planning. This approach enabled the company to dynamically adapt to market changes by evaluating and planning for key skills and prioritizing abilities over traditional metrics like tenure or titles.

This approach allows for a more dynamic and flexible response to market changes and organizational needs, fostering an environment where continuous learning and adaptability are at the forefront.

Skill-based organizations are usually characterized by:

• Dynamic workforce allocation. Skill-based organizations can match the right skills to the right tasks, regardless of the employee’s formal position. This fluidity allows for a more responsive and adaptable organizational structure.
• Continuous learning and development. There is a strong emphasis on upskilling and reskilling employees to meet the evolving demands of the market. Learning opportunities are tailored to individual skill gaps and career aspirations, promoting a culture of lifelong learning.
• Performance metrics focused on skills. Evaluation and advancement consider skill acquisition and application in addition to traditional performance metrics. This shift encourages a growth mindset and incentivizes skill development.
• Inclusive hiring practices. Skill-based organizations foster a more diverse and inclusive workforce by focusing on skills and potential rather than credentials. This approach helps break down traditional barriers to employment and leverages a wider talent pool.

Companies often say they have one “data scientist” job in their architecture. The architecture defines salaries offered to new hires and those who develop and progress within the company.

Therefore, we thought it was time to reverse engineer this role and see how skill value determines market salaries. The result is the skills pyramid, which structures job value into three levels. And we will explain it with an example of a data scientist’s skills.

For example:

• Basic ability. It emphasizes the fundamental layer of ability that underpins more complex skills like ‘I can program.’
• Concrete skillset. It’s refined to rusty vs. modern and highlights the range of skills from time-honored or outdated methodologies to cutting-edge, modern techniques.
• Skills proficiency within the skillset. It evolves into a mastery level within the skills spectrum (beginner vs. expert) to accommodate the continuous nature of skill development, from initial learning stages to complete expertise.
• Focus & application area of skills. It underscores that the value and compensation for skills are greatly influenced by how effectively they are applied in real-world scenarios, industries, or projects.

How much will the market pay for someone who can ‘program code’?

Here, the base skill-knowledge level determines the data scientist’s programming language knowledge and the market value for this language. For example,

• Legacy and rusty languages like VBA have lower skill value than thriving languages like Java or Python.
• Modern languages with a well-established developer community command higher skill value.

When exploring different fields, one can consider the value of programming languages such as Java or Python, as shown in the figure above. About spoken languages, questions arise about the comparative value of English and German or other languages. Similarly, in the area of tool knowledge, the capabilities of Microsoft Excel and Adobe Photoshop can be compared. The importance of interaction styles, including basic versus cross-cultural communication and openness, also comes into play.

How much more is ‘expert’ knowledge rewarded than ‘beginner’ knowledge for any skill like Python?

Here, we break down the skill into different proficiency levels and see how the skill value grows as the software developer’s experience grows. We can see nearly a 21% pay rise regarding skill value growth based on experience gained.

How much does the skills application area decide, and how much am I being paid?

Expertise in a specific skill area makes you a ‘hard-to-lose’ employee or a ‘hard-to-find’ candidate. And thus, the skill value for expertise increases its skill value. For example, IBM has implemented a progressive shift in its compensation strategy to value expertise in specific skill areas. Moving away from a performance-only model, they adopted a multifactorial approach. This change reflects the recognition that skills change over time, with a “half-life” for any acquired skill of around five years. This strategy is consistent with the evolution of technology and the need for continuous upskilling and retraining of the workforce.

Here are some main findings we’d like to share with you. The value across the pyramid from base skill to expertise level shows the following and answers to the previous questions:

• How much does the application area of a skill impact the value of the skill? You can earn up to 31% and more.
• How much does experience/proficiency matter? You can earn up to 21% and more.
• How much do the skills I know within programming matter in terms of value? The answer is up to 53% (41k for VBA vs 66k for Python).

The combination of skills and experience results in vast differences ranging from 41k (VBA basic programmer) to 135k (expert Python developer with MlOps knowledge).

Knowing or having programming skills can sometimes get you the highest salary. Still, the most significant impact on your maximum salary depends on which programming language you specialize in. You can see from the pyramid that Python and Java earn considerably more than VBA. The following reasons can cause this:

• Developer community support / Language power. Python Package Index (PyPI) hosts over 300k packages.
• Migration from legacy systems. With companies moving towards improved performance and maintainability, enhanced security, and access to a broader ecosystem, migration towards modern languages like Python, JavaScript, and Golang is on the rise.
• Cross-platform compatibility. Many modern languages are designed to be cross-platform, which means applications written in these languages can run on multiple operating systems with minimal modifications. It can be a significant advantage for companies targeting a broad user base, increasing their value.
• Future-proofing skills. Companies often want to ensure that their software systems remain relevant and adaptable in the long term. Migrating to a modern language can future-proof their applications by taking advantage of technological advancements.

Just like we saw that proficiency and expertise impact salaries, this also differs from country to country. It can also differ from region to region within a country.

Most interesting is how skill value rises between pyramid levels in different countries.

For a clearer perspective, consider this: mastering a particular programming language in the UK can lead to a substantial 53% increase in value. Conversely, the same achievement in India translates to a modest 14% increase. It shows that mere possession of programming skills, regardless of the language, doesn’t substantially impact earnings in India. This likely reflects the region’s abundant talent pool.

However, as you grow in experience and expertise, we see salary growth of up to 83% compared to 21% in the UK. It shows that as you grow in experience, the market value will also increase significantly.

• Evaluate the value of candidate skills to avoid overpaying or underpaying rather than the roles or past experiences.
• Implement policies and procedures on handling compensation for skills within the organization’s organizational level, like common roles or across hierarchies.
• Provide retention of top talent by understanding and offering appropriate compensation based on experience and expertise.

• Plan for skills rather than for job families or roles – planning tools nowadays allow you to cope with the complexity that comes along when planning on a skills level. This will add more value to your organization and make connecting business drivers with workforce strategy easier.
• Improve decision-making about building or buying strategies. Decide which skills you should build and which ones you should acquire externally based on their value. There are huge savings potentials if your organization relies on a contingent workforce.
• Evaluate how valuable your workforce assets are and quantify the return of the processes across your employee life-cycle (e.g., how much skills value have my learning & development investments generated).

Skill values can also point to certain trend areas in which businesses invest.

• For example, the high value of NLP in the pyramid shows that with the rise of ChatGPT and other language-based AI tools, companies are now ready to spend more in this area of research.
• Another example is MLOps, a paradigm that organizations are adopting. It can also be seen in the skill value.
• With this, you can understand the latest trends, hire upskilled internal talents to stay abreast of the market, and incorporate this into your L&D and recruiting processes.

• Track how L&D investments translate into skill value and measure ROI to make more value-focused decisions.
• Ensure that skills are developed with high value. To stick with the example above, there is a much smaller ROI for building VBA skills within the workforce than for building MLOps expertise.

• Improve the flexibility of a job-grade-based system with a skill-based component. It will enable you to reward specialized skills, increase retention, foster future skills learning, and attract talented talents.
• Plan and integrate L&D options for specializations within the organization. It would help you upskill your talents in the latest market trends and solutions.
• It will be challenging if you are a tariff-based organization, as tariffs don’t compensate for skills yet.