Businesses are prioritising wage reviews as workers continue to demand pay increases in line with inflation, with a third (33 per cent) planning on increasing salaries and bonuses at the start of this year. The latest Hiring Trends Index by Totaljobs, which surveyed over 1,000 HR Decision Markers in the UK, revealed that securing another job with higher pay was the leading factor causing staff resignations between October-December 2023 (29 per cent).
While nearly three in five (58 per cent) businesses are confident they will recruit the people they need this quarter, 30 per cent still admit meeting candidate salary expectations will be a challenge.
The Hiring Trends Index found that the top workforce priority for businesses in 2024 is improving staff retention and engagement (46 per cent), including reviewing benefits and rewards, assessing training opportunities, investing in innovative technologies and offering flexible working.
This was followed by training staff to close skills gaps (37 per cent) and improving talent attraction (27 per cent). However, with businesses facing increasing pressure amidst rising living and property costs (36 per cent), meeting these expectations is proving challenging for businesses. As such, staff retention becomes a top concern heading into 2024 (29 per cent), overtaking filling vacancies for the first time (21 per cent).
One in five (21 per cent) businesses went as far as to admit that they have no plan in place to address these challenges, due to continuing economic and labour market pressures.
Hiring Trends (October-December 2023)
Despite news of layoffs across sectors, 78 per cent businesses recruited in Q4 2023, a figure consistent with the same period in 2022. Of those that recruited, 29 per cent increased their hiring down from 36 per cent in Q3 2023, 18 per cent paused and 7 per cent decreased their hiring.
Of those that did recruit, 26 per cent hired roles in operations, 24 per cent in IT and Tech, and 21 per cent in Sales. Real estate was the sector that increased recruitment the most in this period (46 per cent), followed by construction, medical and health services, and education (39 per cent). This is despite the average time to hire increasing slightly to 6.2 weeks in Q4 2023, up from 6.1 in Q3 2023 and 5.8 weeks the quarter prior. Amidst a stalling job market, 27 per cent plan to increase their recruitment efforts at the start of this year.
The industries most likely to increase hiring in Q1 2024 are transport and distribution (40 per cent), real estate (36 per cent), medical and health services (36 per cent) and media and marketing (35 per cent). Almost one in five (19 per cent) businesses plan to increase recruitment on specialist roles, with 10 per cent investing more in non-specialist roles.
Over the course of Q4 jobseekers themselves have expressed an increased interest in roles related to employee ‘reward’ and ‘retention’, with candidate searches up 85 per cent on last year. Companies planning to expand their reward and retention efforts in the near future, can expect to find plenty of choice among candidates.
Julius Probst, European Labour Market Economist at Totaljobs said: “Whilst inflation has fallen in the past six months, its effects continue to drive shifts in both wages and the labour market, but it is essential to recognise that money isn’t the sole factor. Keeping workers engaged and motivated is equally crucial. Amid broader uncertainty, employees seek roles that offer progression and opportunities for skill development. This not only enhances staff retention but also strengthens a business’s brand proposition, making it easier to hire.
“Businesses must prioritise long-term needs by identifying skills gaps and providing staff with training in cutting-edge solutions like AI. This approach ensures staying ahead in the market and fostering engagement among existing employees.
“Recruitment and retention should go hand in hand, necessitating a review of engagement strategies and benchmarking salaries to achieve successful recruitment objectives this year.”
