When the Federal Reserve cut interest rates by a quarter of a percentage point Thursday, HR leaders around the world likely were watching closely. The Bank of England also cut interest rates by the same amount. According to experts, the moves—combined with a Fed cut earlier this year—will have a trickle-down effect on key HR priorities as the economy reacts.

Designed to stimulate growth, the cuts are expected to tighten the labor market and boost interest in mergers and acquisitions within 12-18 months. That will mean more competitive hiring and more workforce integrations for HR teams, says Scott Hamilton, global chairman of human resources and compensation consulting at Gallagher.

Specifically, Hamilton says that organizations might need to increase compensation budgets and hike salaries to bring in and keep talent skilled for the gen AI boom. That's a shift from the past few years when HR leaders have struggled less to recruit and retain employees, he notes.