Last week I wrote that organizations have fallen into a reactive mindset when it comes to talent strategy. While 2023 has seen relatively few layoffs, next year is shaping up to be a different picture. Around 92% of employers anticipate making some workforce reductions in 2024, according to a survey of more than 440 HR leaders from Randstad, a recruiting firm.

While several of the layoffs this year were cost based, many organizations including Meta and Spotify let employees go for strategic reasons, or because those positions no longer served the company’s business objectives. That could be the case again next year too, as 74% of executives surveyed by Mercer for its upcoming 2024 global talent trends report believe that the majority of their workforce cannot adapt to the new world of work.

“People are saying, ‘I don’t have the talent I need, I’m more willing to pay a premium for it outside, and then I’m gonna do reductions in force on the [unwanted] talent,’” says Kate Bravery, a partner and global advisory solutions and insights leader at HR consulting firm Mercer.

But rather than react to the whims of the business cycle, or despair at the future of work, HR experts say that employers should avoid cuts by thinking about what their workers can deliver to the company over the long term. That also means recruiting with future employee potential in mind, says George Penn, managing vice president at Gartner’s HR practice. He likens this recruiting approach to how a coach would pick players for a team.

“Some sports organizations, they won’t pick for a position on the field, they’ll pick for athletic capability or athletic potential, and the intent being: I can play this individual in a multitude of positions,” says Penn. “It’s the same for business. Some organizations need to do a better job of looking for that great business athlete who has the ability to have skills transferability or move into a multitude of future roles.”

Adopting a future-looking talent strategy also meshes well with companies offering upskilling opportunities to their employees. 

“What I love with the new skills-based system is, [it’s] helping employees make better decisions, nudging them if they haven’t moved in the last six or nine months, encouraging them to think about their skills and what skills are important in the future,” says Bravery. “I really like that, I think it’s really heading in the right direction.”

Paige McGlauflin
paige.mcglauflin@fortune.com
@paidion

Reporter's Notebook

The most compelling data, quotes, and insights from the field.

Working conditions for air traffic controllers have deteriorated so much in recent years that many fear a fatal plane accident caused by air traffic control errors is inevitable, according to an investigation from The New York Times.

Due to staffing shortages, air traffic controllers frequently work 6-day workweeks and 10-hour workdays, leading to severe fatigue, distraction, and low morale. As such, complaints to the Federal Aviation Administration of “significant” air traffic control lapses increased 65% in the fiscal year that ended in Sept. 30 of 2023, compared to the prior year.

“The staffing is ridiculous and getting worse,” Ashley Smith, a former controller in the Atlanta area, wrote in an email to Tim Arel, a senior FAA air traffic official. “What level of fatigue is the agency trying to get this work force to before they recognize a serious safety issue?”

Around the Table

A round-up of the most important HR headlines.

- Experts in the U.K. say that work-related pressure and child care responsibilities are among the reasons prompting professional women to turn to alcohol. Financial Times

- A growing number of doctors, pharmacists, and nurses are unionizing or looking to unionize as labor shortages and heavier workloads make the traditionally high-status roles feel less elevated. The New York Times

- A Johnson & Johnson executive pleaded that the company extend bereavement leave to 20 days after his son died two years ago. The pharmaceutical company fulfilled that request in July, and their CHRO says it’s the best received policy change he’s seen in 16 years at J&J. Bloomberg

- Buy-now-pay-later platform Klarna will no longer hire non-engineering employees and instead use AI to automate vacant tasks. The Telegraph

Watercooler

Everything you need to know from Fortune.

Pros and cons. The CEO and founder of Ellevest, an investment and financial literacy platform for women, says her employees are more productive because they work fully-remote—but that also makes them less creative. —Orianna Rosa Royle

Spotify drops staff. Spotify is laying off 17% of its workforce to reduce inefficiency despite reporting a profitable Q3. This is the largest layoff round in the company’s history and the second this year. —Christiaan Hetzner

Partner up. Junior staffers at some consulting giants and law firms think AI can greatly reduce the time it takes to reach “partner” positions by automating the administrative tasks they’re usually burdened with. —Irina Anghel, Bloomberg