It’s an employer’s market globally, the Workday Inc new global report reveals, with AI transforming hiring practices as applications outpace job openings.

Despite these odds, top performing employees are quitting their jobs to look for better opportunities elsewhere. At the same time, organisations are turning to AI to transform how they find and keep their best people.

The report found that the surge of job applications (31%) far outpaces job growth, which rose 7% in the first half of 2024 compared to the first half of 2023.

However, jobs are struggling with retainment, as voluntary turnover of high-potential employees is up in 75% of the industries tracked in the report.

In the UK specifically, job growth since the first half of 2023 was 8%, with job applications increasing 22% in the same period.

Competition on the Rise

While the job market grew, its becoming increasingly competitive for employees, a trend that will become more pronounced if job growth slows and unemployment keeps edging up globally.

While the UK market is not as fiercely competitive in recent years, it still presents challenges. Economic slowdown and forecasts of rising unemployment suggest increased competition for available positions. In fact, the data revealed there were only 458,000 offers/employee agreements – a 1% decrease compared to the first half of 2023.

“The findings from the report show that the market now favours employers rather than employees,” said Daniel Pell, vice president and country manager, UKI, Workday.

“However, with the war for talent ongoing, leaders must still listen to what job seekers are searching for as the data shows they increasingly want to strike the right productivity‑flexibility balance and be offered career development opportunities alongside a fair salary,

“Wage growth in the UK is also expected to moderate in 2024, which may potentially impact negotiation power for job seekers.”

An Employer’s Market

With the flood of applications, employers are becoming more selective, with 72% of leaders raising the bar for qualifications and experience.

This trend shows no signs of slowing down, as 59% of leaders say this is likely to continue for the next year, creating a challenging landscape for job seekers, while employers struggle to find efficient and fair ways to hire the best talent.

Retainment Tensions

As companies start hiring again, their most talented employees may be leaving for better opportunities elsewhere. Even though overall employee turnover has been low, data shows that top performers are most likely to leave.

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75% of the industries tracked saw an increase in the loss of high-potential employees, creating a big challenge for the 50% of companies already struggling to keep their best people.

Globally and in the UK, the focus is now on retention with many employers turning to internal mobility programmes to help employees grow and develop within the company. And this seems to be paying off, with two thirds (67%) of leaders reporting a positive impact on their organisation.

AI in Hiring

More and more companies are turning to AI for hiring and are seeing real benefits. Most leaders (70%) say AI will make hiring more fair, and 89% believe it will make their hiring process more efficient.

It’s therefore no wonder that most companies (77%) plan to use AI in hiring even more in the coming year.

The most popular ways they are using AI now include testing candidate’s skills (26%), screening resumes and applications (26%), and automating repetitive tasks (24%).