What keeps recruitment leaders awake at night?

December 2024

Many recruitment leaders and companies are worried about the year ahead.

I joined a small group of leaders to talk about what's keeping us awake at night and why. Here’s the top five:

1. Rising cost of employing people: the increase in employers NI in April next year will make it more expensive to employ people. People who were nervous about hiring before are now even more cautious.

2. Legislative change: The Employee Rights bill will will affect employers - but we don't know how. Many will take a wait-and-see view on hiring until they know what's happening.

3. The economy: inflation is staying higher than expected and interest rates are taking longer to fall, putting pressure on profits and growth, and prompting employees to understandably ask for a raise. The UK Budget and Trump’s economic policies in the US are both inflationary, so any post-election bounce won't happen in a hurry.

4. Sicknote Britain: the UK’s inability to get people back to work since the pandemic was the elephant in the room - we talked around how many people are either on sick leave, benefits, or just withdrawing from the labour market. It’s a drag on the economy and productivity.

5. ⁠Skills crisis: Many companies are struggling to find the right people with the right skills - and it's holding them back. There's no magic wand and the government faces a mountain to climb on both benefits and skills.

And this is what people are doing about it:

6. ⁠Looking to the US: the bigger recruiters are more focused on the US rather than the UK jobs market. The US economy is much bigger and growing much faster than in the UK, will go again under Trump while the UK stays flat, especially post-Budget. And recruiters are finding it easier to develop proper partnerships - with good fees - Stateside so the pickings are richer, and to a certain extent less competitive than in the UK.

7. We all love retainers: ⁠In the UK, recruiters are pushing hard to work on an exclusive retained basis wherever possible, rather than on contingency, as it creates secure income for the firm and enables them to provide better results for clients.

As ever, the good companies will do well and well-prepared candidates will find roles. But for the rest, it’s looking like a bleak mid-winter and probably a damp squib of a Spring.

To my recruiter network - is this what you’re seeing, and what are you doing about it?

Thanks APSCo for organising the lunch, especially Hayley Williams, Becky Condon and Jackie Torr.

And to Zahid Raja, Adam Robinson, Gareth Davies, Janine Owen, Peter Ross, Iain Brassell, Nick Bradley, Lynda Bearman, Steve Prendergast, McKenzie Powell, Ian Hetherington, Ian Simpson, Jane Couper, Andrew Daley, and Nadia Ben-Haddou for such a lively discussion.