It is hard to ignore the current cost of living crisis within the UK. Inflation is impacting the whole economy. Recent reports suggest that it will affect the UK labour market more than Covid, Ukraine, and the widespread skills shortage. So what are its implications for the recruitment market and what as recruiters can we do to combat inflationary pressures?

Impact on employers…
As economies opened up again after Covid, demand for talent outstripped supply which has contributed to a widespread skills shortage. Inflation is exacerbating this issue, as candidates look to leave jobs to secure bumper pay increases due mostly to concerns over the cost of living. The key challenge therefore is retaining talent. In order to do so, many organisations are turning to improving their broader benefits package as simply raising wages is not realistic for many businesses. Indeed, many organisation feel uncomfortable in becoming part of the problem by doing so.
What we see as the biggest impact on retention is the creation of a great company culture combined with a flexible working approach that promotes a quality work-life balance. If organisations get this right and employees see the value in this, nervousness around the state of economy will supersede confidence in generating wage hikes elsewhere. As such, great talent may become less confident in moving and place more value on staying put.

Impact on job seekers…
Understandably, over 77% of workers are worried about the cost of living affecting their lives. Increased food bills, energy costs and mortgage rates have a real and tangible effect on everyday consumers, much more so than a financial markets crisis would. As a result, many people are naturally more inclined to consider moving jobs to secure a pay rise to compensate if they are not able to secure a pay rise from their existing employer. This is happening at a time where there is confidence from job seekers in a market where demand for talent is high.
Our view is that whilst financial pressures are real, it is important that job seekers take a long term view in their job search. Making a rushed move to achieve a 10-20% pay rise might feel like the right thing to do financially. However, we know that financial aspects are rarely top motivators for job seekers in the long term. Think about how a move sits with your career plan. Additionally, consider how confident you might be when the market turns – can you deliver to the increased expectation and pressure that your new price tag will command?
 

Impact on recruitment…
Whilst the market is still buoyant and salary inflation is theoretically good for recruitment fees, this problem is making the role of a recruiter increasingly challenging. The level of transferable skills required to successfully navigate all elements of the job has never been more important. Additionally, when up against fierce market pressures, the need for speed and agility in a recruitment process has never been more important in achieving successful outcomes. The experienced modern recruiter offering different solutions should be able to keep up and still add value to their customers.

At Mackie Myers, we believe that the workforce has changed whilst typical recruitment methods have not. That is why we place a premium on challenging the status quo to design innovative tailored approaches to recruitment for our customers. By doing so, we feel confident in being able to navigate the recruitment challenges posed by inflation. To find out more, contact us: hello@mackiemyers.co.uk