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    For 2024, it’s been a year of subtle improvements in market conditions. But why the hesitation in hiring?

    There are quite a number of factors currently influencing hiring demand across the market at the moment. To be clear, it’s not in a poor place, however yesteryear conditions of 2021 and 2022 have cooled and this is influencing market perceptions. We are actually closer to 2018 and 2019 in terms of hiring demand, and even slightly ahead – optimism!

    Some ONS stats below on UK job vacancies:

    Post-Pandemic:
    Q1 2024: 803,000
    Q1 2023: 986,000
    Q1 2022: 1,131,000

    Pre-Pandemic:
    Q1 2019: 749,000
    Q1 2018: 757,000


    Hesitation no.1: 2024. The Year of Elections.

    In 2024, it’s expected that at least 64 countries including the EU will be participating in elections equalling a combined total of around 49% of the global population. The UK of course being one of these countries voting on the 4th of July. Any election will have an impact on business however with the number across the world, it’s clear that effect will be felt globally.

    Political shifts and policy changes resulting from these elections are likely to have been influencing hiring demand as a result of uncertainty around economic policies, business regulations, and public spending priorities. With uncertainty comes less commitment to hiring plans.


    Hesitation no.2: Inflation & Interest Rates.

    Thankfully inflation has eased at its peak of 11.1% in October 2022, which was the highest rate for 40 years and is now just sitting above the BoE target rate of 2%. Despite this, interest rates remain high at 5.25%.

    The impact on hiring demand?

    Moderate inflation can indicate a growing economy which in turn means lower unemployment. However, with the high inflation rates we have seen, this indicates results lower spending power, slower economic growth and higher unemployment rates.

    In tandem, higher interest rates can often lead to reduced business investments with financing becoming more expensive. Similarly, with high inflation and high interest rates, the cost of living increases and as the population looks to cover costs, there is a greater demand for wage increases to maintain the quality of life, impacting business bottom line and ultimtately their ability to hire.


    Hesitation no.3: The Geopolitical Landscape.

    Geopolitical factors can significantly influence hiring demand too by affecting economic stability, business confidence, regulatory environments, and international relations.

    So what have we seen of late?

    Brexit: Brexit has introduced challenges including hiring pain. The end of free movement of workers from the EU has resulted in labor shortages in sectors heavily reliant on EU workers, including STEM fields. This has increased the demand for domestic workers but has also exposed gaps in the available skilled labor force, creating uncertainty and cautiousness among employers when it comes to hiring.

    Visa Regulations: There has been change to Visa regulations seeing the introduction of a points-based system for skilled workers. Changes in these regulations has not only impacted the availability of international talent however the changes take time to understand and implement, again increasing hesitation.


    Slight hesitation no.4: School Holiday season.

    Lastly, the school holiday season is upon us. Now this doesn’t typically cause too much hesitation however if you’re interviewing, remember that the process may take slightly longer.


    Optimism!

    Whilst there has been hesitation across the market, there are some positives to consider.

    We’re already halfway through 2024, the year of elections. Look at the UK, our General Election has been called earlier than we thought. Certainty, sooner, we hope!

    Inflation is declining and hopefully interest rates will follow. In general we have seen wages increase, and are now starting to see this level off. With this brings further certainty in what has been a difficult period for the cost of living.

    We have some really exciting goings on in the technology market, including AI (who saw Apple Intelligence?!), automation, machine learning and continual ongoing transformations across industry. Continual advancements means increased demand for these new skills!

    Lastly, whilst we’ve seen redundancies in industry, there was a stat that said 71% of those made redundant in 2023 managed to secure a new role within 3 months of being made redundant. We are seeing this daily with those being made redundant not on the job market for too long. The skills gap in technology persists!

     

     

    Written by Jordan Marland

    If something in this has sparked a conversation in you, get in touch!

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