1. Economic and Political Uncertainty
The UK's landscape has been characterised by economic and political turbulence for the past few years, thanks to Brexit, the pandemic, the Ukraine war, an approaching election, and much more besides.
It’s meant the labour market has been in constant flux, creating a skills mismatch and talent shortages. And with the UK facing stagflation – a mix of fast-rising prices and weak GDP growth – into 2024, the tough economic conditions mean it’s unlikely things will change in the near future.
These circumstances make it hard for employers to predict their staffing needs, but businesses that are inclined to delay hiring until conditions improve may like to factor in a finding from Adecco’s recent research, published in its latest Labour Market Outlook report, into how megatrends are impacting the world of work. This revealed that almost half (46%) of large employers in the UK anticipate increasing headcount by 2025, suggesting that the competition for talent will not slow down any time soon.
2. Talent Scarcity
While the labour market looks set to stay tight, it’s important to remember that the issue isn’t a lack of people – there are currently around 8.7 million adults in the UK who are economically unactive. Instead, what’s happening is that young people are delaying their entry to work, many over-50s left their jobs during the pandemic, and 2.6 million people aren’t working due to long-term sick leave, with half experiencing mental health conditions such as depression and anxiety.
More than a third (36%) of large employers are facing difficulties in filling vacancies. Candidates have become hesitant to move roles in the struggling economy, and the continuing shortage of skills (particularly digital, ‘green’ and interpersonal) exacerbate the issue, with 61% of large recruiters citing the latter as a serious challenge.
To address this, there’s a marked trend for large employers trying to persuade older people back into work. There’s also a clear need for companies to prioritise wellbeing and employee assistance programmes to support those with mental health conditions, as well as understand what other provisions will make them an employer of choice.
3. Changing Ways of Working
The post-Covid era has ushered in fundamental changes in work dynamics, with an emphasis on flexibility. Adecco's research highlights the preference for hybrid working among UK employees, with 30% saying they wouldn’t take a job if it didn’t allow remote working.
Legislative changes in Q2 2024 will further transform the traditional nine-to-five model and there’s an evident shift towards project-based work and a gig economy, with 23% of UK workers considering leaving jobs to start their own business.
In other words, a core means of attracting both older and younger people into the workforce, while enhancing wellbeing, is offering flexible working. Employers who embrace this will open themselves up to higher-skilled workers who might otherwise be constrained by geographical locations, caring responsibilities or personal preferences.
4. Digital Transformation
The severe shortage of digital skills added to the rapid pace of transformation is a major hurdle for more than two thirds of large employers, especially when it comes to data analysis and the use of AI. What’s more, nearly half (45%) of large employers believe that most roles they’ll be hiring for in 2030 don’t exist today.
The aforementioned flexible working can help access the right talent. A second consideration is investing in ‘human’ skills such as adaptability, creativity and problem-solving. These skills are both complementary to advancing tech capabilities and also easily transferable from one job to another as organisations and roles change.
Looking forwards, the trend towards mapping for skills rather than predefined job titles is expected to accelerate. It can help organisations remain agile, deal with potential disruptions from political and economic uncertainty and proactively address any competency gaps, all whilst future-proofing workforces.
5. The Rise of Purpose-Led Businesses
As skill-mapping emerges as a critical component of recruitment and retention, it’s important to note that talented individuals are increasingly drawn towards organisations that prioritise meaningful work experiences. Seeking a larger pay packet remains the biggest motivator for jobseekers (cited by 36% of respondents), but employees – particularly younger workers – want to be in a position where they can contribute to positive change and derive a sense of personal value from their work.
Currently, 73% of large employers recognise that their organisation’s purpose plays an important role in staff retention, but a quarter admit that their values largely don’t align with candidates’ expectations.
As a result, addressing employees’ need for purpose is one of the top three items on the HR agenda for 29% of respondents. However, employers should note that adding a few well-crafted promises to mission statements will not suffice – authentic messaging, consistent behaviour and ample opportunities for participation are the things that make a tangible difference.
Adecco's research highlights how businesses will benefit by adapting their recruitment strategies in the context of these five linked megatrends. It’s clear that navigating an uncertain tomorrow requires proactive measures today, ensuring that large employers can build resilient and purpose-driven workforces.