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Analysts predict employee experience ‘recession’ in 2024

Analysts foresee an Employee Experience ‘recession’ in 2024. Forrester predicts a decline in Diversity, Equity & Inclusion programs and employee engagement. Despite the gloomy outlook, the rise of AI might hold the key to a brighter future, relieving employees of repetitive tasks. How organizations navigate this shift will determine the trajectory of employee satisfaction and business success. (scroll down to read the full article)

Analysts predict employee experience ‘recession’ in 2024

Organizational leaders will take a “less employee-centric viewpoint” next year that “won’t be doing anyone any favors,” one Forrester researcher said.

Published Nov. 14, 2023

By: Ryan Golden

Dive Brief:

  • Employee experience, or EX, investments will take a significant hit in 2024, continuing a trend seen throughout 2023, according to a recent Forrester report. The advisory firm predicted an “upcoming EX recession” affecting areas such as diversity, equity and inclusion programs in the next year.
  • Forrester said that the share of companies funding DEI functions “with an endorsed strategy and personnel” fell from 33% in 2022 to 27% this year, and the firm predicted this will drop further to 20% by the end of 2024. It anticipated similar trends for employee engagement and “culture energy,” both of which declined globally this year.
  • However, the growth of artificial intelligence could boost employee experience by taking rote and predictable work off employees’ plates, J.P. Gownder, VP and principal analyst at Forrester, said in a video posted to the firm’s site.

Dive Insight

A number of factors have been implicated in the decline of employee engagement this year, with mismatched work expectations and flexibility debates among the most frequently cited examples, sources previously told HR Dive. Employee experience is also affected by issues such as pay, time off and understaffing, all of which were cited in recent labor strikes.

Employee happiness has, perhaps not coincidentally, declined steadily over the past three years, according to software vendor BambooHR. The company joined other observers in naming the current workplace moment the “Great Gloom,” in which many workers are struggling.

Forrester’s findings are noteworthy given the reported connection between employee experience and customer experience. Gownder said the firm specifically anticipates that organizational leaders will seek strategies that do not address employee experience.

“It’s going to be a time when leaders fail to see the benefits of a great employee experience like higher productivity, lower attrition among your employees and an increase in customer experience,” he said. “Instead they will disinvest, they will take a less employee-centric viewpoint, and it really won’t be doing anyone any favors.”

Others believe HR teams will have their hands full in 2024 working on tasks like reinventing their DEI strategies. Specifically, there may be a need to devise methods for overcoming DEI opposition in the workplace, according to a speaker at the Society for Human Resource Management’s Inclusion conference held last month.

AI is set to impact both talent management and recruiting going into next year, Forrester said, a message that others in the industry have increasingly voiced. Gownder said he believes that embracing AI’s potential is a “win-win” in the sense that it could improve employee experience while driving business growth, and “smart organizations will start that journey.” Generative AI applications such as OpenAI’s ChatGPT present both risks and opportunities for job seekers, employees and employers.