Omni Research – UK Resourcing – Market Insight – Autumn 2024
As the employment landscape continues to evolve rapidly, Omni’s latest UK Resourcing Market Insight Report offers a comprehensive analysis of current labour trends and challenges.
As the employment landscape continues to evolve rapidly, Omni’s latest UK Resourcing Market Insight Report offers a comprehensive analysis of current labour trends and challenges.
The latest trends outlined in the recent CIPD Labour Market Outlook and ONS reports reflect a cautiously optimistic hiring landscape across sectors, with recruitment intentions improving and the public sector expected to surpass private sector average pay over the next 12 months. However, the steady labour market could be challenged by the latest Budget and the new Employment Rights Bill, which are expected to have a significant impact on recruitment and hiring practices across sectors into 2025.
The Budget and Employment Rights Bill signal a more employee-centred labour market with a greater emphasis on worker rights, flexibility, skills development, and inclusivity. Employers will need to adapt recruitment strategies and implement new benefits to remain competitive in attracting and retaining talent. Employers that proactively align with these changes and are willing to invest in compliance, training, and EDI initiatives will likely find themselves in a strong position, with opportunities to build resilient and sustainable workforces in line with modern workforce expectations. However, for many organisations – particularly small and medium-sized enterprises (SMEs) – the adjustments required to comply with these new policies may add financial and administrative pressures, leading to a re-evaluation of their recruitment and organisational models.
The annual CIPD Annual Conference and Exhibition (ACE) heralded similar messages around confidence and intentions, with emphasis and recognition that finding skilled talent continues to be a challenge. During our joint session with the CIPD, our Talent Strategy Director, Katie Noble, described that to stand out, organisations need to focus on brand and experience as differentiators, embrace hybrid and flexible working as standard, and understand and develop their people to aid retention. The conference also focused on the use of AI, promoting the need for HR to move beyond discussing its benefits and toward embedding its use.
The latest quarter showed an improvement in recruitment intentions in the UK, indicated by the rise in the Net Employment Balance (NEB) reported by CIPD, from +18 to +21. Public sector employers have shifted into positive territory (from -1 to +6), while the private sector NEB remained stable at +24. This reflects a trend where more employers are looking to expand employee levels (32%) than reduce them (11%), with large private sector employers expressing the highest intent to increase headcount.
Despite high recruitment intentions, the public sector faces a challenge with hard-to-fill vacancies, impacting its ability to increase employees as planned. Although 67% of employers plan to recruit in the next three months, sectors like healthcare and construction face significant recruitment obstacles due to visa restrictions and skills shortages.
Omni supports organisations by providing bespoke recruitment solutions that address hard-to-fill vacancies through targeted recruitment campaigns, inclusive hiring practices, and optimised talent pipelines. By leveraging Omni’s Recruitment Cost Calculator, organisations can assess the financial impact of their recruitment effectiveness and refine hiring practices to maximise their recruitment ROI.
Redundancy rates have seen a reduction recently, however, rising operational costs driven by increased National Living Wage and Employer National Insurance could result in renewed pressures on employee levels. Currently, 21% of employers are planning redundancies, which could increase as businesses contend with economic pressures arising from the Budget.
At Omni, we can assist organisations in rethinking workforce management by developing strategic workforce planning solutions that enhance productivity future skills needs. Through proactive succession planning and talent redeployment services, Omni can help organisations manage resources more effectively.
The construction sector remains an outlier in vacancy trends, with a 15% increase in job openings despite an overall 15% decrease across the economy. Real estate is also showing vacancy growth, contrasting sharply with industries such as healthcare, manufacturing, and transportation, which have all seen a reduction in vacancies. Applications for positions in construction have dropped by 35% compared to last year, leading to a 4.5% increase in wages as employers compete for scarce skills.
Omni can support organisations in sectors experiencing talent acquisition difficulties by developing targeted attraction and retention strategies. Omni’s sector-specific expertise allows for tailored solutions that address talent shortages, leverage market insights to offer competitive compensation, and employ proactive sourcing methods to fill critical roles.
The growth in employee earnings has remained steady, with the public sector expecting higher pay awards than the private sector over the coming months. The current pay rise expectations in the public sector range between 4.75-6%, while private sector awards remain around 3%.
Omni can support by providing market data insight that align with sector-specific pay trends. By providing real-time salary benchmarking and offering guidance on non-monetary benefits, Omni helps organisations maintain attractive, compliant compensation strategies that align with industry standards.
Large businesses are more likely to adopt inclusive hiring practices than SMEs, where only 13% plan to hire those with disabilities or long-term health conditions. With 10.2 million working-age people in the UK reporting a disability, there is significant opportunity for organisations to expand their talent pools through inclusive practices.
Omni can support organisations in building and inclusive workforce by implementing accessible recruitment processes, by helping organisations engage a wider talent pool and training leaders and hiring managers on inclusive hiring practices. Omni’s expertise in EDI and talent strategy can help organisations structure hiring practices that welcome and support candidates of all abilities.
The current labour market trends highlight both opportunities and challenges for employers. While recruitment intentions show resilience, various sectors face significant headwinds due to skill shortages, economic pressures and legislative changes. Omni believes that proactive, adaptable recruitment strategies are essential to overcoming these hurdles. By focusing on inclusive hiring, competitive compensation, and strategic workforce planning, organisations can position themselves for sustainable success. Omni is committed to shifting the dial on attracting and retaining the right talent by leveraging our expertise to support resilience and growth in the recruitment landscape.