Chrimbo limbo as gov’t plans plunge UK employers and employees into stand-off on New Year job plans

  • Global recruitment firm ManpowerGroup reports employer hiring confidence is stagnant going into 2025
  • In the face of employment policy overhaul employers are holding back their hiring plans, preferring a ‘wait and see’ approach
  • Meanwhile, employees are also keeping a lid on New Year plans, as one in four fear the prospect of unemployment in the next six months

London, UK, Tuesday 10th December 2024 – UK employers are holding the line on their hiring plans for the New Year, with new data from the ManpowerGroup Employment Outlook Survey showing overall hiring intentions for Q1 (January – March) 2025 have become stagnant.

The Net Employment Outlook, a measure of business hiring confidence, stands at +28% – unchanged since last quarter and has decreased by one percentage point on the year. The Outlook is calculated by surveying 2,000+ UK businesses about their recruitment plans for the next business quarter.

“Businesses have been paralysed by the recent Budget announcement, just as they were post-COVID.” said Michael Stull, Managing Director, ManpowerGroup UK. “There is a strong appetite to grow, but the new government’s actions have thrown the labour market into yet another period of uncertainty. Businesses have been waiting to see signs of the economy kicking into gear, but the government has yet to give business the confidence to go ahead with plans for growth.

“Our analysis shows the increase in National Insurance contributions could cost employers as much as 33% more for each lower wage worker from April next year. With dissatisfaction rising on this issue, we’re expecting wage growth to decline next year as the changing costs are indirectly passed onto employees,” added Stull.

ManpowerGroup’s data shows of the businesses who plan to hire, the volume of employers intending to hire for business growth has been almost static across 2024. While employers’ appetite to hire remains strong, their confidence to actually go ahead and make new appointments is stalling and not translating into action.

“Combined with changing workplace policies, we’ve raised concerns alongside the Recruitment and Employment Confederation (REC) that proposed changes to zero hours contract rules for agency workers will negatively affect employment opportunities and protections for agency workers. While we’re fully supportive of maintaining strict regulations for employment businesses, we believe this proposed policy will severely impact the flexibility of our labour. The impacts will lead to a further slowdown in hiring with knock-on consequences for productivity and the economy,” Stull continued.

ManpowerGroup’s survey of employee perspectives, Global Talent Barometer, recently found that one in four UK employees feel at risk of unemployment in the next six months; 24% believe they are likely to be forced to leave their current job in the next six months, and 25% are not confident they could find another job that met their needs in the next six months.

“The needs of employees and employers are diverging, with clashes around flexibility and wage negotiations. But they also share common ground in holding their nerve; both sides standing still before making any definitive plans for the New Year.” Stull continued. “Our recommendation for both parties is to keep investing in skills. If you can diversify your own personal skills by joining a training course or upskill within your current role, make sure you take advantage. For employers, it’s worth being aware that one in three British workers are telling us they don’t feel they have sufficient opportunities for promotion or movement to achieve their career goals. It’s really important to act on this feedback and not become fully consumed by the shifting sands of cost increases and skills gaps – not doing so will only create a more challenging situation.”

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