Navigating the UK's Evolving Job Landscape

​The UK job market is undergoing a period of transformation, shaped by a confluence of factors including the ongoing cost of living crisis, geopolitics, political uncertainty, and the evolving nature of work. Understanding these trends is crucial for both employers and job seekers to effectively navigate the current landscape.

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Counteroffers: A Rise in Retention Strategies

In an effort to retain valuable employees, employers are increasingly resorting to making counteroffers. This trend is evident with 40% of employers making counteroffers over the past year. This shift reflects the competitive labour market and the desire to maintain experienced talent.

Unemployment Rate: A Moderate Increase Expected

The unemployment rate has experienced a slight uptick, rising from a historic low of 3.6% to its current level of 4.3%. While this increase may raise concerns, it is important to note that the UK job market remains relatively resilient. The Institute for Fiscal Studies (IFS) forecasts a mild recession in the first half of 2024, which could push unemployment to 5.8% by the end of the year.

Planned Redundancies: A Surge in Job Cuts

A concerning trend emerged with a significant increase in planned redundancies. Over the 12 months leading up to July 31, the number of planned redundancies spiked by a remarkable 54%, reaching 237,017 for the period of 2022/23. This substantial rise in job cuts reflects the economic uncertainty and challenges businesses are facing.

Migrant Worker Sponsorship: Post-Brexit Landscape

The introduction of post-Brexit arrangements has impacted the role of migrant workers in the UK labour market. Since these changes, only 15% of employers have engaged in sponsoring migrant workers. This shift highlights the evolving landscape of migrant labour in the UK.

Pay Growth Rate: A Positive Trend Amidst Economic Challenges

Despite the economic headwinds, pay growth has remained positive. The annual growth for regular pay (excluding bonuses) was 7.8% in June to August 2023. This sustained growth in wages is a welcome development for employees.

Job Vacancies: Above Pre-Pandemic Levels

Despite a recent decrease in job vacancies, they still remain above pre-pandemic levels. This indicates that the labour market remains relatively buoyant, offering opportunities for job seekers.

Hard-to-Fill Vacancies: A Challenge for Employers

Employers continue to face challenges in filling vacancies, with approximately 42% struggling to find suitable candidates. This highlights the need for employers to adapt their recruitment strategies and attract top talent.

Permanent Placements: Steepest Decline Since June 2000

The August '23 KPMG/REC Jobs Report unveiled a substantial drop in permanent placements, the steepest since June 2000. This decline suggests a shift in hiring practices, with employers potentially favouring temporary or flexible arrangements.

The UK job market is a dynamic landscape shaped by various factors. Understanding these trends is essential for employers and job seekers to make informed decisions and navigate the current environment effectively. By adapting to the evolving dynamics of the labour market, both parties can maximise their chances of success.

For more information, keep an eye out on our blog in the coming weeks for key insights and trends for 2024.

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