Inflation and its Impact on the UK Labour Market
Inflation is one of the biggest threats facing the UK, with data suggesting prices will double for shoppers in January. Not only is the current UK inflation rate impacting individuals, but it is also going to take a large toll on businesses, with bosses predicting financial losses in 2022. These losses come through a combination of inflation and the national insurance rise, which will be sure to eat up more of customers' disposable income, resulting in large scale cutbacks on spending for a lot of families.
Inflation, a bigger threat than Covid-19
The Totaljobs hiring index, a survey carried out by YouGov every quarter, quizzed 1000 HR decision-makers to understand what would be the biggest threats to the labour market in 2022. The report found the rising cost of living and subsequent effects, to have a larger impact on the labour market than Covid-19 restrictions, High Covid-19 cases, and candidate shortages.
With a combination of skill shortages and a larger demand for higher wages, a lot of businesses face a massive uphill battle for highly skilled staff. Law firms in London are already paying graduates £150,000 starting salary as the demand continues to increase.
How businesses will need to adapt
Now, more than ever, it will be harder for businesses to attract new talent, as seen in the example above. So if you are a business owner, or key decision-maker in your organisation, what steps do you need to take to get the employees that are right for you?
Following a poll conducted on our LinkedIn page, 65% of people believed that remote working will become a priority for people looking for new roles in 2022, with 26% believing higher salary expectations will become the top priority instead. Also on the list was a want for more diverse work (9%).
Therefore, to attract new talent in 2022 you may have to adapt how your business is run. It may be time to review your working conditions to see if there's potential for remote working amongst your staff. You will also need to review the salary and benefits packages you are offering to your employees not just to attract new staff, but to retain the ones you already have. For a full breakdown of retaining staff, you can check out our top 3 tips here.
Lastly, if you are looking for support with your hiring needs, contact us and we will see how we can support you in 2022.