Report Provides In-Depth Look at Regional Talent Pool, Business Outlook

The Right Place recently released its 2024 Talent Report, offering a roadmap for employers adapting to evolving talent trends. The report summarizes key strengths and areas for improvement that are evident in Grand Rapids’ – and West Michigan’s – current labor market and important to consider entering 2025.

As the Greater Grand Rapids population continues to grow, it is becoming increasingly younger, educated, and diverse. The report addresses what it calls “important characteristics that define today’s workforce” and can be used to predict what trends are coming next.

“The Talent Report highlights Greater Grand Rapids’ unique advantage — its growing, educated and diverse workforce, with a strong concentration of young talent. As we face an aging demographic, it’s crucial to retain and nurture this vibrant pool,” said TaRita Johnson, Senior Vice President of Talent and Diversity at The Right Place. “The report also notes recent growth in racial and ethnic diversity, emphasizing the need for greater representation across all levels of an organization to ensure a truly inclusive, competitive environment.”

Key findings from the report include:
• A slower pace of hiring signals renewed signs of strength in the labor market and declining unemployment rates.
• To combat skills gaps in areas including data science, artificial intelligence, and technical engineering, employers are investing in upskilling and reskilling initiatives. Upskilling has become a critical strategy to counteract talent shortages.
• Companies are seeing diversity not only as a social responsibility but also as a strategic advantage, contributing to creativity, problem-solving, and overall organizational strength.
• Employee well-being and mental health support are top priorities in talent management strategies.

According to the report, West Michigan – greater Grand Rapids, in particular — enjoys a robust and growing population that is becoming “younger, more educated and increasingly diverse.” Compared to national and state averages, the region has a higher concentration of young people across all age groups from 0 to 34.

Its population is also becoming more educated, experiencing a nearly 20% increase in 25- to 34-year-olds holding a bachelor’s degree or higher – more than twice the national average.

The community’s diverse population has increased significantly, growing to nearly 25% of the region today (up from 17% two decades ago) and projected to hit 35% by 2050.

Like much of the country, according to the report, the region has seen the intensity of the pandemic-era labor market subside, with the labor supply now exceeding pre-pandemic levels.

Recently, it said, labor demand has slowed. Job postings remain near record highs, yet actual net job growth is modest. In response, employers are placing greater emphasis on retaining their current employees and investing in training to prepare their talent for the workforce of tomorrow.

“The pendulum swings,” Johnson said. “Right after Covid lockdown, you heard people saying, ‘Oh my gosh, it’s a demographic drought. We can’t find talent.’
“So, what you see now is there is a cooling, but it’s not cold,” she added. “The market is softening when it comes to talent. But people are still hiring. Both things can be true.”

The fact talent attraction and retention may be getting better, The Right Place analyzed more than 550 retention calls from September 2023 to September 2024 and found talent attraction and retention are still major concerns for companies.

For instance:
• In 2022-2023, 32% of companies said talent was a “major pinch point,” and 47% had talent recruitment issues.
• In 2023-2024, those numbers had dropped to 24% and 38%, respectively.

That might be why companies are focusing more and more of their attention on talent retention rather than recruitment.
According to the Right Place report, human resource professionals nationally are gearing up for this focus shift, as uncertain market dynamics, an aging workforce, and declining birth rates put pressure on the talent pool.

The report points out that:
• 81% of HR professionals surveyed in 2024 believe maintaining employee morale and engagement is an “essential priority,” compared to 78% in 2023.
• 78% prioritize retaining top talent in the 2024 survey. That’s a slight rise from 77% in 2023.

Johnson said The Right Place thinks there needs to be a balance between retaining longtime talent and “building a bench” by bringing in new talent.
“If we allow all of this organizational knowledge to leave, and we’ve not built up our talent bench … it will hurt us if we’re not continuously engaged with the talent that we have,” she said.

On the other hand, she pointed out, the days may well be gone where employees stay 20 or 30 years with the same firm, especially as members of older generations retire and are replaced by younger employees.

“We still have lots of companies here that have people who have been there over 20 years,” Johnson pointed out. “But we’re going to see a shift, as we bring in more generations, where loyalty to the company will not look the same. (Younger) Folks want individualized career paths. They want to be able to see their future.

“The report talks about how many companies are doing a renewed focus on retention. How do we retain this talent that we currently have?” she added. “But at the same time, we’re attracting talent and we’re building our talent bench. It will hurt us if we’re not proactive … building that bench.”
Building that bench could be somewhat problematic. According to the report, navigating an aging population is a key to talent retention. The report points out that:
• In the region, the 60-and-older population has risen from 14% in 2004 to 23% in 2024.
• Nationally, it has risen from 17% to 24%.

At the same time, the younger population has been dropping:
• The 19-and-under population in the region has dropped from 30% of the total population in 2004 to 25% in 2024.
• Nationally, it has dropped from 28% in 2004 to 24% in 2024.

“We’re getting older, so we’ve got to make sure that we’re engaging all of our talent,” Johnson said. “We can’t just focus on the talent that we think is young and that can mold in everybody in that organization.

“Because even though Boomers are retiring, there’s still a number of people that will continue to work,” she added. “So, understanding how do we engage all of these levels, the multiple generations that are in the workforce?”

While the age of the workforce continues to fluctuate, it is also becoming much more diverse. And, according to the report, things like inclusivity, employee well-being and compensation are important factors in talent retention.

In 2004, the region’s diverse population sat at 17%. That number is expected to more than double (to 35%) by 2050 (it grew to 23.4% in 2024).
Demographics have changed in the region in the last two decades. All racial demographics had grown between 2004-2024:
• Two or more races, by 116 percent.
• Asian, by 77 percent.
• Hispanic, by 60 percent.
• Black, by 32 percent.
• Native Hawaiian or Pacific Islander, by 30 percent.
• White, by 5 percent.
• American Indian or Native Alaskan was the only demographic to decrease, falling by 3 percent.

Johnson pointed out that diversity is reflected in the region’s colleges and universities, particularly in STEM programs. For instance, she said, 72 percent of students in computer science majors are international students.

“It is huge … we need this talent,” Johnson said. “I sit on a committee with Global Detroit … we’ve got multiple people, international talent who are degreed and have advanced degrees. It’s critical.”

Regardless of the age of the workforce, culture is still a big concern for employees, according to the Right Place survey. Fostering a human-centered culture focused on “empowering employees and promoting well-being” is an essential element of both talent retention and attraction, the authors wrote.

The report notes a global survey of workers that said:
• 43 percent said their organizations have left them better off than where they started.
• 50 percent said they were always or often exhausted or stressed at their jobs.
• 40 percent cited existing burn-out.

That survey also gave respondents a number of issues to identify as “developments you worry about” relating to the job:
• 53 percent cited increasing work stress leading to worsening mental health,
• 28 percent worried about technology taking over jobs.
• 25 percent cited the rising number of new skills and jobs needed as a result of technology.
• 24 percent worried about increasing threats to physical safety or wellness in the workplace.
• 22 percent cited the “always on” economy enabled by digital technology,
• 22 percent were concerned that technology now allows management to monitor their work without their consent.

Those are different and varied concerns. Johnson said one key is to make sure the company culture is such that it embraces all walks of life.

“Everybody wants to be valued,” she said. “You can’t give everybody the same thing. But you have to that focus on what your culture is like, because it not only affects your workforce, it affects your brand.”

Compensation is also a concern, according to the Right Place report, whose authors write that keeping compensation on par with both the market and rising inflation is essential.

A report from the Society for Human Resource Management points out that while some 73 percent of HR professionals say inflation is a top concern, only 27 percent say they factor it into annual pay raises.

The average hourly wage in the Greater Grand Rapids region is $30.80. Johnson chuckled when she thought about working at a McDonald’s when she was in high school, where she made a whopping $4.25 an hour.

“I thought I was doing good, big time,” she said with a laugh.

Nearly $31 an hour is a lot better, but Johnson notes the high cost of living with high grocery prices or parents with children in extracurricular activities.

“Thankfully we have some … programs that are supporting these things, but the cost to live today is outpacing the money that people are bringing in,” she said.

“Yeah, $30 an hour is certainly an excellent wage. However, inflation continues to be a problem. The economy when it comes to the cost not just in survival mode, but to live comfortably and set aside for the future is a reality. So, we need these great paying jobs and great wages.”

Employees’ concerns about technology taking over jobs could be well-founded. According to the report, new technology is changing people’s skillsets and how they learn.

The average time before skill sets start becoming obsolete, the report found, is five years. Some 9 percent of leaders think they’re making progress balancing employees’ capabilities with technology. They’d better pick up the pace, because 44 percent of an employee’s core work skills are projected to change in those same five years.

Take areas such as high-tech or advanced manufacturing industries, for example. Johnson said they’ve found many people who are in those jobs “don’t necessarily have the skill” for them.

“Maybe we didn’t professionally develop or train them (enough), so now we have to re-skill them,” she said. “I ran a career center, and I used to tell them we are preparing students for jobs that don’t even exist today.”

And many of those are likely to involve artificial intelligence. According to the report, regional companies have increased AI job postings by more than 300% in recent years.
• 75 percent of organizations around the world are accelerating their use of AI.
• 39 percent of workers are concerned about the effects of AI on their jobs.
• 52 percent believe AI will enhance their career potential.

Johnson likens it to a game she’d play with her kids, asking them, “What do you think won’t exist when you grow up?”

“It was fun to hear from a kid’s perspective what they would say, and they were pretty spot on,” she recalled. “Think about AI, and how the way technology is moving. We’ve had AI for years, but the more we feed it, the smarter it gets. We have to stay abreast. We have to have continuous learning, continuous training.

And we’ve got people living longer, staying in a workforce longer.

There’re a couple things that are great takeaways. For instance, our unemployment rate is 3.5 percent, where the country is 4.2 percent. Our challenge is we must retain that talent.”