November insights and the economic outlook

As we head into the final few weeks of 2023, we’ve certainly seen our fair share of changes in both the economic and recruitment market, especially this year!

To help you better understand what changes to expect as we look to next year, here’s our recap of the top news from November and what it means for you.

The skills gap continues to widen

In the latest jobs report from KPMG and the REC, it seems there is still a disparity between available jobs and candidates with the skills to match those positions.

We are also seeing more candidate availability as financial budgets are squeezed, leading to redundancies and hesitancy with hiring ahead of the new year. Temporary positions are on the rise as many businesses look for candidates to fulfil projects or short-term initiatives.

The good news is that now is a great time to hire into your team! Conducting interviews and finalising the hiring process ahead of the festive break could mean you have a new starter joining you in early January, helping to kick off your new year business goals. Given the candidate surplus, you will also have your pick of the best people.

For candidates, this does mean a more crowded market and increased competition for the same roles. Ensure your CV is up to date and references the appropriate skills required to match the job you’re applying for. It could also be time to look at training courses to widen your skillset. You can find some useful links for Tech training courses here.

National insurance rate cut from January

In one of over 110 announcements made as part of the annual Autumn budget last week, Jeremy Hunt announced the National Insurance rate would be cut from 12% to 10% starting in January.

This change should help over 27 million people across the UK retain a little more of their average salary. For example, an employee working full time on £35,000 will save over £450 a year, or around £37.50 per month added to their payslip.

National Living Wage rises and opens up to 21 and 22 year olds

As of January, ahead of the annual financial year, the National Living Wage will rise 9.8%, from £10.42 to £11.44 per hour. The new wage is also being opened up to 21 and 22 year olds for the first time, allowing those graduating from University or completing apprenticeships to enter the work place at a higher basic salary.

This is a great step to support the younger generation in accessing essential funds to help them early in their careers and allow for further independence.

However, this could mean paying higher salaries for junior employees that require additional training. Given the increase, it will be interesting to see how salaries of those with higher levels of experience or qualification also change to meet these wage rises.

Additional funding to make the UK an AI powerhouse

An additional £500M will be invested into artificial intelligence over the next two years to help fund innovation centres, following the success of supercomputer centres in Bristol and Edinburgh.

We are interested to hear more about how this money will be distributed and the expected impact, but this investment should lead to an increase in tech roles, particularly engineering and emerging roles in AI development and training.

Manufacturing industries to receive huge investments

On top of the £500M promised for AI funding, Hunt also promised an additional £975M for aerospace firms, £520M for life sciences such as medical research companies, and £960M for the new green industry firms.

These huge investments should transform the offering for businesses, and provide ample opportunities for candidates seeking roles in these areas.

As we have seen in 2023 already, AI has experienced huge technological advancements, and we expect this to continue into the new year. Improving candidate screening will become more important as we see automated CVs come into market, and live interview technology could lead to challenges for some businesses.

Pensions are set to be reformed

From April, the government will increase the new state pension by 8.5% to £221.20 a week, accounting for up to an additional £900 a year. There are also set to be further pension reforms whereby people will have one pension pot for life.

This should make it easier for businesses and employees to both contribute and understand their pensions in future.

What’s needed now is a speedy general election to allow businesses to plan effectively for the next few years and increase certainty in their business goals.

If you are looking to prepare your business for the future given any of the recent announcements, we are here to help. Our expert team work across Tech, Engineering, Business Support, Marketing, Sales, Legal and more.

Get in touch to see how we can help you hire with confidence.