Three HR trends for 2025: How to navigate the future with confidence? 

Hi, everybody. Thanks for joining the HR Trends webinar that-- we've started just a minute or so just to give participants a chance to join in. It's that time of the year here in Sydney. It's nearly 35 degrees. Some of you might be just coming in from lunch. Others might be, hopefully, enjoying some of the weather without getting too warm, if you're in Sydney enjoying this webinar from your phones on a park bench somewhere. Either way, I just want to welcome everyone to the webinar.

I'm Cynthia Cottrell. I lead the Pacific Mercer Workforce Solutions Business for Australia and New Zealand. I've been looking forward to this webinar for the last several weeks now. It's that time of year. We know we're one of many that are talking about crystal balling, if you will-- about the hot trends leading into 2025.

We are really excited to share our point of view on what we think is going to be really important to organizations going into next year and most importantly, what we think is on the minds of employees. But before we go right into that, I'd certainly like to start us off with an Acknowledgment of Country.

So in the spirit of reconciliation, I acknowledge the Traditional Custodians of country throughout Australia and their connections to land, sea, and community. I pay respect to their elders past, present, and emerging, and extend that respect to all Aboriginal and Torres Strait Islander peoples today.

| might hand over to my colleague Jared Cameron to give us the greetings from New Zealand.

Thanks, Cynthia, and greetings from a warm and sunny Christchurch. We don't quite have the 30s today, Cynthia. We're just-- we're struggling by with 20, but we're happy. I'd like to do a warm welcome to all of our New Zealand audience today. And on behalf of the Mercer New Zealand operations and also those from NZ attending today, a big, warm welcome also to our Australian guests. Kia ora, nau mai, haere mai. Tena koutou katoa. Thank you for joining.

Wonderful. Thanks, Jared. So let's get into this. It would be remiss of us to talk about trends without having more than one or two of us on today to give multiple perspectives about what we think is happening. So I'm really excited to introduce our panel more formally. You've heard--

I'll start firstly with Jared because you just heard from him. Jared Cameron is a principal in the Workforce Solutions business. He also leads our digital HR and tech advisory practice in New Zealand. He's based in Christchurch. And so again, welcome, Jared, to the panel. Chi Tran is a partner in the Workforce Solutions business. She is the leader of our digital and insights and data business for both Australia and New Zealand.

And a warm welcome to our special guest to the panel, Sarah Traynor. She's a general manager of talent acquisition and mobility at ANZ, with over 18 years of experience in HR, organizational development, culture and leadership, business partnering, and transformation. Welcome, Sarah, to the panel.

All right. So we're going to move into a bit of scene setting, folks. If you're seeing these images-- hopefully, flash across the screen-- hopefully, it's not giving you some anxiety and some memories of the past. But these are images meant to invoke a couple of things about what we might remember that weren't really too long ago.

But if you really think about the pandemic and what it was like, we had empty streets in the middle of CBDs. We were obviously mask-wearing. We were bringing work into our homes. Our kids, our pets were regular features on work calls, whether it be Zoom or Teams. And for some reason-- I don't about you, maybe I'm projecting my feelings onto you. That feels like a really long time ago, doesn't it? But it wasn't. It wasn't.

And in fact, if we go to the next slide, we've already skipped into another important shift in our work. I call it the era of BC. This is a BC era, but not the one that you might know. I call it the Before ChatGPT era. Can you remember what it was like before ChatGPT? Can you remember what it was like during pandemic?

In a way, because of these shifts happening so quickly it's no wonder that we said, at this point in time-- very close to the end of 2024. And as we look back and we think about the acceleration of these shifts to the way employees work, to how organization employers are nurturing that relationship with their employees, we just try and imagine what it must feel like to plan for next year.

It's hard to remember what happened last week as opposed to what happened even four years ago. So planning six months in advance-- 12 months-- yeah, it's quite a feat, I think. So why is that? Well, today, we are going to talk to you about some hot trends and some very important things that we do think organizations are, in fact, planning for and how they can think about those things.

But I thought it was important to pay homage to the fact that leaders, that HR directors, that business leaders and employees that were all sort of facing into this hailstorm of all kinds of change happening at a rapid pace. And those things are happening in the backdrop of still a high cost of living, evolving geopolitical environment.

We still have challenges with pay equity and transparency. We are still working in an environment where up to 82% of employees are feeling at risk of burnout. All of these things are in fact ever present in the minds of all of our workers and all of our leaders. And yet, yes, we're here planning for 2025. So we hope that you come away from today's webinar with some practical ideas and hopefully some validation even of strategic imperatives that you are taking forward.

And so to kick us off as we start thinking about these trends, I want to launch us right into it. The first trend and again, these are in no particular priority order, but we are telling a story today. So we thought when starting with these trends and important things that we organizations are planning for, the best place we always think to start is at the employees. What are employees looking for? What are they really thinking about as important needs that they need to see met both in terms of their work life but also in their own well-being.

And so before we get further into that, I think it's important to note that where we are today, certainly from a business environment perspective, we have seen data that would indicate that hiring rates have slowed down. And Chi's going to talk a little bit more about that. We have seen all the headlines about whether or not that means there will be an acceleration to return to office, whether or not there will be other things that may shift in the requirements of employees, particularly as it relates to things like technology and the use of AI.

But in this section, let's just get right back down to what our employees actually diverting their investment and their energy to as they really think about how to create a thriving workforce with the right employee value proposition and ways to engage employees that will help attract and retain that talent in 2025. So with that, Chi, over to you. Let's always start with data.

Definitely, I'm happy to share the findings from this year's Australian-New Zealand Total Remuneration Survey, which was just released last month. So what are we seeing in this year's headlines in this year's results. So we're seeing economic indicators continue to influence the way business operate. We inflation is easing. There's still high cost of living. We've seen a slight increase in our unemployment rate, but they're still inflated talent demand in high school areas. And it's a constant tug of war that we're having for employers.

But in the essence of that, this year's data shows that hiring is easing and that employers are not planning on adding new talent or hires as they did in previous years. They're now focusing on employer retention and/or are yet to decide on their approach. But what we do foresee is that this trend will continue in 2025 as well.

Now, adding to this, in line with the weakening hiring intentions, employee turnover has also eased back to pre-pandemic levels. Turnover is not seen as an issue by employers anymore. In fact, 87% of our Australian employers and 90% of New Zealand employers are either able to manage turnover or don't see it as an issue. And I have to say this marks the highest level of confidence that we've seen in the past four years.

So with voluntary turnover easing, employees gaining more confidence in managing their workforce. The past couple of years, that war on talent has been a constant worry. The great resignation. We're all very, very familiar with that word. And we're seeing with this easing of that is that the ability for now for organizations to manage their workforce and enable organizations that time to focus on bigger agenda items like fair pay, building strong EVPs, upskilling and reskilling, working with AI.

So let's turn over in hiring. Let's move to another question I constantly get asked every year, and that's on salary budgets. What is the salary increase budget for 2025? As inflation and employee turnover stabilizes, we also see our overall total salary increase budget also stabilize in 2024. And the forecast is that it will remain at 4% in 2025 for Australia and remain the same at 3.8% for New Zealand.

Now, while our total salary increase seems to be stabilizing. So that includes merit promotion, market adjustments throughout the year. Merit increase is purely just salary increase. We have seen merit increase rise again in 2024 for Australia and New Zealand, which is reflecting on the highest in 10 years, sitting at 3.8% and 3.5%, respectively.

These high merit increase budgets will seemingly be maintained at 3.5% for New Zealand in 2025, but for Australia, we do see it modestly drop to 3.6% next year. And this resonates to us with the current economic conditions as well.

Now, if I look at an industry lens for 2025, technology sector is the only sector that according to our salary results. It shows the only sector that is planning a slightly higher budget for Australia. And for New Zealand, when we look at 2025 forecast, it shows that industries like chemical manufacturing and technology are also slightly lifting their merit salary increase budget next year. And in line with the growth areas for these areas also.

However, there's always top movers. So despite what everything is happening, what are the top movers salary increase movements that we're seeing in to certain jobs. General management-- if you're in that job family, you'll be pleased to that for the past three years, we've seen a continuous growth in this job family and it's also there this year in 2024.

And if we look at the highest paying jobs in Australia, they're coming from job families like data analytics, project management, engineering and science, and legal and corporate affairs who have all exhibited higher salaries than the general market. If we cast our view to New Zealand, similarly, data analytics, project management, legal, IT, and engineering were the job families attracting the highest salaries in comparison to the general market.

And lastly, I'll leave you this with findings as well. When looking at the data results this year across both Australia and New Zealand, it also showed that the top moving jobs from these job firms actually came from entry level and graduate positions.

That's very interesting. And I think everyone's always interested in the hot jobs, if you will, or the top movers. And pay, as we all know, it's only one component of what matters to employees. Now, clearly, in an environment where we have high costs of living and still trying to tame inflation, it matters even more. So I don't want to gloss over that.

But there are other things that employers are telling us matter to them that aren't just about pay. Want to tell us a little bit more about the investments and the types of benefits that are resonating with employees?

Yeah, definitely. Pay is always just one part of the equation, especially a year where we see things are stabilizing. And the merit increase is set to dip down, particularly for Australia. There's the other area that organizations can really tap into to attract and retain talent-- is on the benefits side. And I've got results from this year as training benefits review to also share with you all.

So this year, wellness benefits, including health and wellness programs, flexible working provisions are still among the top benefits across Australia. Leave benefits, particularly parental leave income, also ranked highly this year. And our findings have shown that the vast majority of organizations are offering some form of flexible working arrangement.

And we've seen over the past five years a significant increase in organizations implementing formal, flexible working policies. In fact, if we cast ourselves back to pre-pandemic 2019, only 6% to 8% of organizations reported having a formal strategy on flexible working arrangements. Fast forward to 2024, this figure is now 87%. And we know ongoing flexi-time, such as consistently starting and finishing earlier, remains the most popular form.

In contrast, though, we've also seen-- it's worth noting that part time employment options have gain traction. And it's now ranked number 2, and it's sitting at 70% of organizations providing this option this year, which is up from last year. The other topical one is obviously working from home. The media attention announcements that you see-- some large organizations have put in mandates for their employees to return 5 days a week in the office. And we get asked quite a lot what are we seeing.

And I have to say, our data shows that the vast majority of organizations still provide their employees the option to work from home. In fact, only one in three organizations have reported putting a formal structure in place when it comes to mandating a return-to-office. And that the median number of days, if they do have a mandate, it's sitting at three days.

So we do know that the debate will continue as media covers this sentiments. But on whether flexibility will remain as today or if it will change, I guess only time will tell. But what we do is that flexibility is non-negotiable now to employees.

Yeah, yeah. I think this is going to be a hot one right into 2025. There's no doubt, given those headlines. And maybe this is a good time just to get a sense from the participants. We'd like to ask this question. We actually ask it in our research each year. And it's not to suggest that people need to give away 10% of their pay for things, but it helps to make it really clear as to what's important if you were to trade pay for a benefit.

And so we'd love to hear from you. If you were answering for yourself or you wanted to answer for your own employees that you look after, what would you give up for a 10%-- would you give up a 10% increase, sorry, in return for-- and then, just check where those benefits might be, where you would actually give up a 10% pay increase or where your employees might do that.

We're going to do this in a quick step. So this will be literally about a 35 to 45 second. So this will be gut instinct. This will be even more relevant than our research, I think, Chi.

For sure. Nothing like the most up-to-date findings.

And we ask this question. Oh, good. OK. Well, this is going to be really interesting, because we're going to show you something in a minute. But what we can see-- and again, panels, is feel free to come off mute if you'd like, if you can. You're looking at the results along with me here that the top choice, 46% of those polled stated fully flexible.

So giving up a 10% increase in return for fully flexible or compressed work schedule, followed closely by the ability to reduce my hours. Increase employer contributions to retirement is third. None of the above even. That's very possible. We gave you a short list based on what was top of the list in our studies. But we might do quickly, and then, I'll again-- I'll leave the panel to think about those results. As we're actually now showing you, when we run our Mercer Global Talent Trends Report-- and this year, we had close to 12,000 voices in that report. What we found is that the benefits that employees would actually trade off a pay rise for are these-- additional being benefits from a family, increased employer contributions to retirement, fully flexible was third in this case, ability to reduce hours, fourth. What do you guys think, Jared, Sarah, Chi? Interesting? Does it resonate?

It does for me. I mean, I think, we all got a taste of the fully-flexible-control-yourself when you came into work-- when you work from home. It's pretty hard to walk back from that. I think that's the challenge. We also all got to see how difficult it is to work full-time from home, certainly hard when you've got young children. So there's a median in there somewhere. But I'm not surprised that topped the list, to be honest.

I mean, this might be a good time to hear from Sarah, actually. I think, Sarah, from an ANZ perspective, from your perspective, how have you seen flexibility play out, and how are you guys monitoring that in relation to how other organizations are doing the same in your domain, in your industry, sorry?

I think we've been very lucky in some ways in that we've had a flexibility policy and approach in place for quite some time. So we have had probably all different patterns of people working flexibly to a small extent, and then pre-covid quite a-- sorry, post-covid, quite a different picture of the sorts of flexibility people are looking for.

I think for us, one of the things that's been really important is to make sure that flexibility isn't seen as something for working mothers. And actually, it's about anyone with any needs, life, being a whole person. We've got Olympians who work flexibly so that they can train for their sport. We've got people who do volunteering, or education, or perhaps just like having a Friday to do nothing.

So there's lots of different reasons people are availing of flexibility. And certainly, in our head office roles, it's very easy with start end times being quite fungible and flexible. I think one of the things we haven't cracked yet is how to really manage by outcomes to enable more of that, because I think that is-- a big way to unlock flexibility is to be very good at managing to outcomes and doing that well.

But probably, one of the biggest challenges, I think, with the hybrid work, which has hijacked a lot of the flexibility conversations being about return to office-- which is a bit sad because it's only a tiny bit of what flexibility is about. And it's that balance between you and the team that you work in. And so your working hours aren't all about just what works best for you, but that give and take between How does the team work most effectively? How do you work with your stakeholders most effectively?

And so at ANZ, we have a 50% expectation, but you can manage that 50% however you like. So sometimes people might come in for a whole week and then, they might have a whole week from home or I tend to come in four days a week, and then occasionally, I work a few extra from home because I like being in the office. And I think in a leadership role it's often quite important.

And so that story of me versus way is critical. And then, the other thing is the leadership. And sometimes we hear people refer to it as a leader lotto across the industry where we have policies, we have frameworks, but a lot of it is about the leadership. So we've spent more time investing in upskilling our leaders to be inclusive leaders, to manage in a hybrid world, and also to look at things like team charters and social contracts as ways of enabling teams to manage their flexible needs, collectively, while also meeting the needs they have to deliver the work for the bank.

Well, I like that. I mean, I think-- and it lends itself really well into what we're about to talk about next. Because you mentioned, I think, conundrums that all organizations are facing into How do you shift the focus to outcomes? as opposed to How many hours are you putting in? or Have you logged in by 9:00 and out by 5:00 PM? Basically, rather than tracking the inputs in spaces of times or minutes or meetings attended How do you get to the outcome?

And I think that is the nut to crack in 2025 and beyond. I don't want to over promise here. That's the answer is there next year. But I think that's important. And I think the other piece I picked up was the leadership component of that. I mean, there's so much change happening. And I would agree, and I'm speaking on behalf of my own experience at Mercer, and I'm sure Jared and Chi can share those stories.

We know that change is a challenging thing to do at best, even pre-pandemic, when we're all sitting in the same room and trying to drive big cultural shifts. Doing it in a hybrid style requires an even stronger, I think, sense of leadership and inclusivity. That really matters for sustainable change.

And I think that's going to matter a lot for this next trend we're about to talk about. I'm going to transition us to that and head off to my colleague in a moment because on that bent of flexibility, of accountability, of shifting our thinking to outcomes, of thinking about ways that we can work that line up with our lives.

And we really believe that is one of the keys to creating a thriving workforce. We want to talk now about the thing I mentioned earlier, everything AI. And what does that mean in this world of flexibility, of distributed teams, of leaders leading in a different way. There's a lot of things being said about AI. It will improve work. It's going to create more value. It's going to help us work smarter.

We're not going to answer it today and debate the productivity question today. We already know what the headlines and hype say. But in all honesty, I think the question is left to be answered. Will it really impact on productivity in the ways that we think value the human factor in all of this? What are we doing to deploy that capacity that may be freed up by AI?

But before we dive into all that, I'd like to actually hand over to my colleague Jared Cameron, who has spent a lot of his life thinking about this. Because ChatGPT isn't the first time we've talked and seen AI. AI's been around for a long time. Right, Jared? So over to you, Jared, just to give us a little bit of a run through of how you see this framing up for next year.

Yeah. Thanks, Cynthia. You're banging on about AI. It's been around for quite a while. It's just got a nice shiny new brand name and a couple of new toys that have entered the market. It's had a nice little upgrade.

Look, we know that despite increased flexibility, people are still working more hours. They're struggling to adapt to new ways of working. There's a blurring of lines between work and personal life. The power of personal devices, the ease of working from anywhere. And it's kind of leading us to these challenges of balancing productivity demands with the employee well-being work life balance.

In fact, I think Cyrus will talk a little bit about that before. GenAI is one of those tools that's entering right now that has the potential to help us with tackling some of these challenges. Now, we've done a little bit of looking back. And considering the past-- I'm just going to do that briefly here. If we think back to 2023, really that was a year of learning about AI for most of us-- kind of working out its potential and how we might actually apply it inside our work.

2024 so this year has been more of a year of experimentation. So it's very much been about trialing AI, developing strategies for it. And we've seen massive like huge levels of investment from vendors this year. So the question is, what does next year bring. I think next year is going to be the year of action. And what we mean by that is really seeing AI becoming a strategic pillar for every organization.

It's going to become central to how we work. And it's going to provide some really great opportunities to look at productivity. That's a term we're not going to answer today. But it's also going to really challenge our thinking about Is AI going to become an extra team member? Are they actually going to be joining our teams?

So before we dive into how you do it, we are going to have a little bit of a look at what some of the research does tell us. So I'm going to hand over to Chi briefly to take us through some of the research around AI.

Sure. Thanks, Jared. So AI is a game changer. I have to say, even though we're not tackling the productivity-- I have to say, this year, when it comes to AI, in particular the client conversations that we're talking to this year with clients, we've seen a significant shift towards adaptive work design. And most importantly, this renewed focus on workforce productivity.

How can it help us unlock that productivity? So I'll start with that tagline. But in terms of the research and the data, 98% of organizations have expressed their plans to utilize such technology within the next two years, with the majority already doing so. So that's good. We know CEOs expect AI to be a top growth driver.

And 61% of companies are reporting increased productivity from using generative AI. A further 44% of executives are also agreeing that employee training and upskilling or reskilling would provide the biggest boost to productivity. And we're seeing the merging focus also on upskilling the HR function, in particular, on innovation, collaboration, but also digital dexterity skills in their journey to enabling AI and the use of AI within their organization.

So just some data points. As you can see there, there's still lots of reasons to embrace AI. And so I guess, I'll give it back to you, Jared, in terms of how our organizations-- how do an organization get started.

Thanks, Chi. I spend a lot of my time talking to HR leaders and IT leaders about how we tackle some of the challenges around tech inside their organizations. That's pretty much my day-to-day job. And one of the biggest takeaways that I have around AI is this is a whole of business change. This is not something that's happening to one department in isolation. It's happening everywhere, in parallel, all at the same time.

So when we think about it being a whole of business change, it might affect different groups at different points, but it is going to touch sort of everyone. There's a real question for the HR team around. Well, what is our role in supporting this program of work? And I feel like there's two hats that we get to wear. I feel like the first hat we get to wear is around how do we help our people with making this transition to different ways of working. And that could be entire jobs being dramatically affected, hopefully in a really positive way-- great new ways of working.

But the second hat is how do we utilize and harness AI to help with the employee life cycle. So how can we bring some of that into the domain that we have accountability for inside the organization. So I think we do have two hats to wear. But given it's a whole of business change, this is one of those examples where deep, deep partnership with IT is so important. It's unlikely that the people function is going to be leading an IT strategy-- sorry, an AI strategy in isolation.

Generally speaking, it's going to be led out of the IT function and we're going to be really important stakeholders in that program of work, especially with the introduction of custom AI, which some of you might have in your organizations today. We have it in our organization today. It's called Lean AI. And that's where we've gone and taken one of the products on the market and adapted it to our own particular internal use-case and provide it as a toolkit for our teams internally to use.

So deep partnership with AI is a really, really, really critical, essential thing you absolutely need to be doing. Now, when it comes to this customer AI journey, it's a really exciting space. Some of you might have access to generative AI today, and I hope you do and have a go. Give it, get in there and get stuck in and try it out.

There's a couple of other things that you can be doing, though. So number one is get involved in the IT program at work. If you've got custom AI being rolled out in your organization, you're an important stakeholder in that journey. You want to be in the early adopters. You need to be there to wear both the hat around-- how it's going to change the employees world, but also how you could leverage and harness it inside the HR function as well.

The second really important thing is I don't think we can put a dollar value on the investment that's gone into the space this year. I tried to work out what it is. It's in the gazillions. I really just don't how much money it is. I couldn't put the zeros behind it. But what I can tell you is every vendor on the planet is trying to work out how to retrofit AI into their platform. And they are all racing each other to do it faster, better, more comprehensively. And it is a war. It's going so fast.

So idea number two, pick up the phone and call your existing HCM vendor, have a chat to them about their AI roadmap. They will have something ready now. They'll have something ready tomorrow. They'll have something house ready in January. So it is worth picking up the phone and having a conversation with your account manager-- find out what's coming. There's a really good chance you could leverage it today. You could be leveraging it already. You could be one of the early adopters.

And lastly, I guess the third thing we recommend here is your organization is going to be full with AI early adopters. You're going to have trailblazers in your teams. You might know about some of them. They might have cropped up on the radar, left and right. If you have, that's great. If you don't who they are, you need to go and find out who your trailblazers are.

There will be people that are investing their own time in upskilling their knowledge, and right now. You'll probably have people that are considered an expert in today's kind of level of maturity around AI. So you want to find those people and they're a great source of ideas for how you can leverage AI in the workplace.

And that probably using a few tools you might not want them to be, so it's an opportunity for you to be also looking at your AI strategy at the same time. But that's a really critical thing for you to consider. How do you find those trailblazers? It's our chance for all of you on the phone to tell us a bit about what you're doing around AI in your organization.

So we're going to move to our second pole. This poll is about How are you preparing for AI? and you're able to select any number of these options. It doesn't just have to be one. You might be doing everything. And if you are, that's awesome. Cynthia, what are we doing? 30 seconds for this one-- for a response?

Yeah, another 30-- 45 seconds would be good. We really are going off, like, what is top of mind. You would know that-- in 35 seconds or less.

Well, look at the results, guys.

But this particular poll, we don't have an industry benchmark to compare to. So this one is going to be the population of people on the webinar today giving us their indication. It's a bit of a straw poll.

And maybe well, actually, we might give people a little bit more time to think about it, because this will actually give Sarah, I think, a moment just to give us a sense and just to give people a little bit of a break so it doesn't feel like so much pressure in 35 seconds. But maybe, Sarah, whilst people are thinking about what they're preparing-- how they're preparing, it'd be great to hear how ANZ is preparing their workforce for AI.

Yeah, sure. And I think I actually really loved what you said, Jared, about there being these two hats that we wear, one preparing the workforce and helping people transition to an AI-enabled world and the second, how we use it in the life cycle. So I might focus on both those hats and speak a little bit about what we've been doing.

So on the helping people transition, there's certainly been hiring of AI skills for quite some time now to bring some of that expertise into the organization. But there's been quite a bit of focus on how we're helping people experiment and play. We've always wanted to make sure we have a learning culture-- an experimentation culture where people are curious, try things out, they're adaptable and nimble and can move. And AI's given us a great avenue to really push that experimentation to.

So a couple of key things. Sponsored by the technology division, we have an AI immersion center in our head office, so that's available. Firstly, it was for leaders to come and understand a bit more about AI, see some use-cases, play with it, play with prompt engineering themselves, and that's now been extended to other people across the organization to get that exposure.

We also have a GenAI Shark Tank which is led by the CEO, CIO, our head of strategy, and also our CEO for New Zealand, where teams of employees can pitch ideas for how we could use GenAI to be more productive. So that's really great to see that top down sponsorship and also that permission to explore.

And then, the last quite a recent event is our GrowChella festival, which is a festival of learning. It used to be a run out-of-tech business for tech and it's expanded across the organization. And the focus this year was on "evolve together" and very much about this human machine world and how we work together.

One of the things I really like about that "evolve together" sentiment is I feel the narrative on AI has shifted quite a lot in the last 12 months, from this jobs will be replaced to how are we augmenting the human capability and human intelligence we have in the organization, which I think is a much better story. And that's sort of Copilot narrative. And on Copilot, we have given Copilot for web to everyone in the organization to allow that playing. And then, some of us also have Copilot for Office PowerPoint, et cetera, that we can use, which I absolutely adore.

And then, from an employee life cycle perspective, I think that the thing that excites me about AI and how we can bring it into the organization is the opportunity for us to get rid of a lot of that gray administrative work around work and also create personalization for all of our people. So that tyranny of scale that challenges us in a large organization can actually be addressed in a way we've never been able to address it before with some of the tooling out there.

Certainly, in talent acquisition and mobility, there's a plethora of players, as you mentioned, Jared. And I've spent a lot of time with a lot of different people across the industry, consulting firms, SMEs, vendors, partners, other people working in similar roles to me to talk about how that's evolving. But great opportunities for career pathing to be surfaced in a dynamic, real time way for jobs-- people to be matched to jobs, to understand how learning can help them advance. And so that's something I think that I'm really excited to explore in that part of the life cycle.

We've already used some AI in the learning-- in our learning area as well and our assessment teams. So I think there's a whole lot of opportunity ahead. The challenge will be How do we make that consumable? Because we also know that people are overloaded by the amount of software they engage with. And how do we actually bring in the right technology that makes that easier and more in the moment flow-of-work rather than looking for tools, trying to find things and getting lost.

Yeah, we've actually had a massive increase in the number of software solutions available.

Yes.

You've now got the ability to write code like you never could before. So we've got the ability to launch a product for everything now. So I totally understand your headspace around that. And tell you what, someone's got some really good internal branding skills in your organization. I'd love some of the terms-- the AI immersion center and GrowChella. How--

GrowChella-- GrowChella-- great. There's a backstage area. But what was--

[INTERPOSING VOICES]

Brad, who's been managing that program-- he wanted a name for this year, the "evolve together," that symbolized both human machine, but was friendly, and positive, and innovative. And so he used ChatGPT, or sorry, Copilot for web to help him distill options.

That is so true. And there was this term from you guys, and I'm looking at least at the panelists, I feel like I can say this amongst folks who are around. When the term-- a phrase, "There's an App For That" was coined, yeah, by Steve Jobs about 20 years ago now. It's probably not outside the realm of imagination that what's actually replaced that is there's an AI for that.

Yes, yes.

There's an AI for that. So amazing. Great Well, this is fantastic.

If you were looking at the poll results together, we do see along the lines of what Sarah was talking about in terms of just being jumping straight in and finding these great use-cases, both in HR and right at your fingertips and your Copilot. So experimenting and working with it, it looks like the majority of you feel the same way-- that you're preparing for it by just simply jumping in and experimenting and learning as you go. So I think that's a very practical way forwards, again, likely to be more of that in 2025.

Second, very closely that we're developing an AI strategy now. So isn't that interesting? So we're jumping in. Now, this is not, by the way, just because this group has said it. This is really-- I think, Jared, you'll agree because you talk to a lot of organizations who are coming back around now and thinking about that strategy and that set of North Star aspirations about what they're going to do next. What does this mean for me?

It's interesting that that is the second most important thing people are doing to prepare for AI going into next year is developing their AI strategy now. What do you think about that, Jared?

I think when you have something that is completely new, foreign to everyone, you need to have a chance to understand it, get your hands on it, touch it. And actually the advice we've been giving for the last year is experiment immediately. Just start using the tool as quickly as you can, so you can start to get a feel for how it could work. And then you can start to learn and understand the applications.

And the other thing is it's innovating so fast that you don't want to wait to start using these tools like they are literally innovating weekly. So you, kind of, want to get on the bandwagon. So I think that makes a lot of sense that the experimentation came first. And I'm quite glad because I made the call that this was the year of experimentation and it's come out on top. So I'm quite pleased--

And that's right, yeah. This is real time polling. So you-- I'm going to have you pick my lotto ticket numbers. In the interest of time, we're going to move into our last trend. And this is, kind of, a neat way to wrap things up. This is an important trend that we know and there's data behind this that-- and it makes sense from the story we've been talking through today-- what employees need to have and sustain a quality of life and an ability to continue to earn and learn at the same time?

So the ability to continue to obviously have that financial well-being, that career well-being, that health well-being-- in order for those things to happen, we absolutely know with all the change happening around us and we just talked about one important one, which is the change in the way we're working by partnering with our technology.

We know that skills are, fundamentally, the real currency of work, and we know that by preparing for making really important decisions about skill deployment, talent, deployment, progression, pay, hiring-- that doing this with skills in mind is something that has been not just a new-- this is not a new trend, by the way.

This is just something we think is going to absolutely go at scale going into 2025, where maybe skills based hiring was the hot thing. And it still is and it probably has gotten even hotter with AI inside of our technology to help us find that great skill set. We think the next set of important talent management practices using skills is only going to gain greater ground in 2025 and really be adopted at scale. And why is that?

So a couple of things I'm just going to say before I hand over to our data guru, Chi, is that a recent study by LinkedIn-- that was released earlier this year. It covered 41,000 skills-- only in the way LinkedIn can do this. Because LinkedIn has 15 million Australian members. So in this study, they ran this scraping of all that data.

And what it indicates is that GenAI will affect the skills composition for approximately 7.2 million Australian workers. That alone would be enough to say that investing in reskilling, upskilling, and really thinking about ways that we can equip our workers, our employees, our team members with ways to learn, focusing more on how we learn and how adaptable and agile we can be about learning.

That curiosity-- that many organizations now are really actually hiring for rather than how much you know-- but what is your capacity to learn and learn more. And so with that said, I am going to switch over to this trend-- is How are organizations preparing for a skills-powered future? And I might actually hand over to Chi to just talk a little bit about what we're seeing in our research.

Sure thing, Cynthia. So some of the things that are definitely supplementing this is we know and I've mentioned a few times, there's decline in hiring intentions next year. And starting this year, there's a decline in turnover. HR leaders are telling us that they are remaining anxious, too, about the skill shortages, with 46% seeing skill shortages as a top threat to their business. So they need to be on top of what skill sets they need to be on top of upskilling and reskilling is definitely coming through.

Furthermore, we know that 53% of Australian employees and 46% of HR leaders trust that their organization will teach them the skills that they need. So think about this-- your employees are saying that they are leading to the organization to tell them, teach them what skills they will need if their job is to change as a result of AI or automation.

We're also seeing upskilling and reskilling on the rise. And supporting this further, in this years Australian benefits report, we found that 60% of organizations now have a learning and development program available for the whole organization. In previously, it seems to be done in parts or functions or a certain area, but it's now being applied across the board. And that's definitely-- we're seeing a rise in that.

But what does all this mean? And for us, it's clear that there's going to be a need for skills-based pay model. And that it's on the rise, and it's going to be here quicker than what we thought. Because when you upskill and reskill, what happens next? There's got to be a link to that reward mechanism.

So we do think that skills is the next pay currency. And we also that skills-based pay is gaining traction across the Asia-Pacific region. And for Australia, 20% of organizations say that they have some form of skills-based pay rewards program in place. But the adoption is still slow, like 20% is still a relatively low number. And of those who do, the majority, 87%, of organizations say that they're using the skills-based pay approach to help them attract and retain premium skills within their organization.