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DECEMBER 2024
This article explores two key themes: how our 2024 predictions for People leaders panned out, and what we see as the key forces that will shape leadership hiring in 2025.
From the increasingly key role of Chief Human Resource Officers (CHROs) to the rise of workforce planning and AI, here is a deep dive into our insights on leadership hiring trends – past and future.
In 2024, we noted how the CHRO was taking on a more strategic role in organizations, requiring leaders to master diverse competencies. Our forecast was accurate: the newest CHRO capabilities we identified are now must-haves for hiring companies.
Today’s CHROs are expected to excel at building employee engagement, navigating hybrid work models, designing innovative Total Rewards programs, and leading workforce diversity efforts. AI also emerged as a critical skill, with CHROs leveraging these tools to enhance organizational strategies.
The modern CHRO is no longer just an administrative leader but a strategic partner in shaping organizational success.
AI continued to influence HR in 2024, just as we anticipated. Recruiting teams benefited from automation tools that streamlined hiring processes, from resume screening to candidate engagement.
Still, per the Academy to Innovate HR (AIHR), HR remains one of the slow adopters of AI compared to other business functions.
Interestingly, candidates have quickly embraced a range of AI tools, using platforms like ChatGPT to craft compelling applications and CVs. This shift contributed to an unprecedented surge in job applications, which strained HR teams—a trend we’ll explore further in our 2025 predictions below.
Recent years saw an increase in both interim leader roles, and fractional leadership options for part-time expertise. Last year we predicted a continued rise in demand for interim.
However, while our team had experienced a 300% increase in interim searches from 2022 to 2023, in 2024 we saw fewer such requests. Economic uncertainty and inflation may have pushed more candidates to seek full-time roles.
Still, the gig economy is growing rapidly; for example, the number of people earning from platform gig work tripled from 2017 to 2021, per the University of Chicago. With this kind of growth continuing, interim, fractional, and gig work remained a major trend.
We forecasted growing demand for finance leaders due to M&A activity and economic challenges. According to the U.S. Labor Dept., jobs in finance overall are expected to grow faster than average over the next decade with CFO jobs growing 3%. Our own search practice saw about a 50% increase in finance leader searches in 2024, affirming this trend.
Chief Financial Officers (CFOs) and other finance leaders, alongside CHROs, are critical in navigating complex business environments, and the demand for these roles continues to grow.
The focus on Total Rewards as a key element of talent strategy persisted. As Gen Z entered the workforce in greater numbers, companies reevaluated their benefits, career growth opportunities, and workplace cultures to attract and retain younger talent.
Gallagher’s 2024 U.S. Workplace Trends Report: Organizational Wellbeing Report shows retaining and attracting employees were the #1 and #2 HR priorities in 2024 respectively, with Total Rewards a significant contributor to both (aspects such as base salary, variable comp, wellbeing initiatives and more increased in 2024 to support retention and hiring). We anticipate that this focus on Total Rewards will remain crucial as workforce demographics shift further.
AI has made it easier for candidates to apply for jobs and skillfully market themselves with a variety of generative AI tools, resulting in job applications in 2024 skyrocketing, according to non-profit news organization Marketplace. There has been a reported 31% increase in job applications in 2024 per Fortune.
While this benefits job seekers, it overwhelms recruiting teams unprepared for the sheer volume of resumes.
To navigate this challenge, one promising approach is to outsource the work of processing this quantity of applications that recruiting teams are not used to handling. An outside search expert can focus on sourcing top-tier talent through targeted, proactive strategies, in channels other than a job posting, to identify the best hire.
Companies should consider partnering with search firms to manage the influx, freeing up the recruiting team – so they aren’t flipping through resumes all day long.
AIHR reports that only 12% of HR departments have adopted generative AI, and 76% of HR professionals believe their organization risks falling behind in AI. Despite lagging adoption rates, 2025 can be a tipping point for AI in HR. A prime case is with the inefficiencies created by increased job applications, which will push HR teams to adopt AI tools for tasks such as resume screening and candidate evaluation. This is the year that we see HR catching up.
As HR functions become more strategic, leveraging AI will be essential for managing workloads and driving efficiency.
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With companies facing an increasing need to plan future talent requirements, we believe workforce planning will be a top priority in 2025. American Productivity and Quality Center (APQC) and Society for Human Resource Management (SHRM) report that many companies are now using workforce planning to tackle a wide range of talent planning.
Most HR leaders still are doing just short-term workforce planning; for instance, Gartner reports that 61% of HR leaders limit workforce planning to a one year horizon.
But organizations are now recognizing the need for multi-year strategies. We find that companies are talking with us more about multi-year planning.
Companies are also increasingly engaging executive search partners for long-term solutions, enabling them to fill multiple roles efficiently and strategically.
The traditional executive search model is evolving. Companies are exploring new ways to engage with search partners, such as the “all-you-can-hire” model above. These flexible arrangements enable organizations to respond to shifting leadership needs while maintaining readiness for future transitions.
Today, organizations are looking for more than just executive search—they need end-to-end HR solutions. Whereas a traditional leader search starts with “We need a specific executive,” with all the complexity of technologies, AI, and new requirements for workplace engagement and retention, organizations rapidly find other needs.
This includes adjunct services such as compensation benchmarking, system assessments, and succession planning. Search firms are becoming strategic partners, offering comprehensive services that address broader organizational requirements.
In addition to recruiting services, Frederickson, as a part of Gallagher Executive Search, has access to specific Gallagher Human Resources and Consulting services and tools to provide not just executive search, but other complimentary projects like compensation consulting, executive coaching, and much more.
We believe the ability to navigate change will define successful CHROs in 2025. Per recent research presented to Association for Talent Development (ATD), the pandemic drastically reduced people’s bandwidth to handle change. The average worker today experiences ten planned organization-wide changes a year, up from just two in 2016. Employees are steeped in “change fatigue,” and their ability to cope with change is at just 50% of pre-pandemic levels.
We hear continuously from CEOs that they need a CHRO who will know how to steer a company through change.
In the past, a CHRO needed to know core HR functions and implement a set of standard policies and procedures. In 2025, as a number one requirement, leaders must not only implement HR functions but also effectively guide organizations through technological disruptions, economic shifts, and evolving workplace models.
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Future leadership hiring will be shaped by AI, workforce planning, and a reimagining of how companies engage with search firms. For organizations, the key to success lies in adapting to these trends with strategic foresight.
For a search practice like Gallagher Executive Search, 2025 presents an opportunity to support clients in navigating these changes through innovative, tailored solutions.
The future of leadership hiring is dynamic and exciting—are you ready?
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Ben Taylor is Partner and Vice President, Business Development at Frederickson Partners, a Gallagher company. Ben held previous roles at Frederickson for eight years, first managing marketing and sales and more recently serving as Chief of Staff and Diversity, Equity and Inclusion (DEI) Lead, co-managing the DEI practice with the CEO. [View Ben's LinkedIn]
Frederickson Partners, a Gallagher company is a market leader in retained executive search since 1995. As one of the top-rated HR executive search and C-suite recruiting firms, we have expertise in placing Chief People Officers, Chief Human Resources Officers, Chief Diversity Officers, Chief Financial Officers, Chief Legal Officers and many other senior leaders. We draw on a broad network of rising and established executives and leaders, and a 28-year reputation as a talent acquisition and HR Advisory provider.