In recent years, the employment landscape in the United Kingdom has increasingly felt like a roller coaster ride, full of unexpected twists and turns that have left many workers and employers alike trying to catch their breath. From the long-lasting effects of the pandemic; reduction in hiring confidence and threat of redundancies/workforce shrinkage due to the increased costs associated with new government legislation such as NI Contributions and minimum pay, the factors contributing to these changes are as varied as they are impactful.
One of the most pressing issues facing UK employment today is the foreseen wave of planned redundancies and workforce reductions due to a perceived reduction in hiring confidence. According to new research, we are all bracing ourselves for the largest wave of redundancies in a decade (excluding the pandemic) and polls show that a third of employers plan to reduce their headcount through redundancies or by recruiting fewer staff.
And as companies adapt to changing market conditions after Brexit and the more recent election of Donald Trump in the US, it’s not uncommon to see announcements of job cuts (or freezes on recruitment) as businesses strive to remain competitive. This can be particularly unsettling for workers who may find themselves caught in the turmoil. Add to this the perceived lack of a plan as to how government ministers will support businesses to encourage growth and investment and it raises the question: How can companies balance the need for efficiency with the responsibility they have to their employees? Investing in the development and training of well-engaged staff, however, is always a greater benefit in the medium and longer term, isn’t it? It has to be preferable to a knee-0jerk reaction.
Adding fuel to the fire is the rising cost of employment brought on by new legislation. The UK government has introduced several measures aimed at safeguarding workers’ rights and ensuring fair wages. While these are noble goals, they have undeniably resulted in increased costs for employers. Higher minimum wages and NI Contributions, alongside new regulations regarding sick pay and parental leave, can impact hiring decisions and, in some cases, lead businesses to make difficult choices regarding staff levels.
Then there’s the rising tide of automation and AI, which is reshaping job roles across various sectors. From manufacturing to finance, jobs once thought to be secure are now being threatened by advancements in technology. While automation can lead to greater efficiency and cost savings for businesses, it also poses a significant challenge for the workforce. The imperative to adapt is strong, but not all workers have the resources or training to transition into new roles that require different skill sets.
And let’s not forget the ongoing conversation about returning to the office. As we emerge from the pandemic, many have found a new rhythm with remote work. However, companies are beginning to see the benefits of in-person collaboration and are pushing for employees to return to the office. Recent data suggests that office occupancy is steadily rising again, with office wok levels now hitting a post-pandemic high, with many companies now requiring a return to in-office work for the majority – if not the entirety – of the working week. Is this a necessary correction or a backwards step away from more flexible and modern working arrangements? This shift can create tension, as some workers prefer the flexibility of remote work while others see the value in face-to-face interactions. Balancing this dynamic is no small feat for employers.
Finally, we can’t ignore the issue of slow wage growth. Even as the cost of living continues to rise, many employees are finding that their pay packets aren’t keeping pace. This has a direct impact on morale, productivity, and overall job satisfaction. If companies want to retain top talent in a tight labour market, it’s essential they address this disparity and ensure employees feel valued for their contributions.
And here we find ourselves in HR…salary growth in the HR sector has fallen further behind the UK average. Over the past year, HR salaries increased by 4.8% compared to the national average wage growth of 6%. Despite this slower overall growth, however, HR roles continue to offer higher pay than the UK average. Yet still, some dissatisfaction with pay remains an issue. We regularly hear colleagues in HR who were unhappy with their salaries failing to keep pace with the cost of living.
As always, we are also tasked with looking for signs of stress and anxiety within our teams and to ensure that wellbeing resources such as employee assistance programmes are accessible. Yet the overburdening of existing employees – HR teams included – could lead to discontent and potential turnover, further exacerbating the challenges businesses face.
There are reports that more than three-quarters of HR professionals are currently ‘open’ to new job opportunities so the sector needs to look at how best to incentivise and reward its workers via benefits package and development opportunities.
A one size fits all approach is unlikely to work. Hybrid models, tailored to industry needs, are likely the best compromise. We all know that our employers must invest in better technology and management strategies to ensure productivity does not decline, regardless of where employees work. And we know, perhaps better than most, that workforce engagement is key. Employees value flexibility, but they also crave meaningful connections, mentorship and collaboration, which is sometimes a challenge when working remotely.
In summary, the employment landscape in the UK is currently undergoing seismic shifts, driven by planned redundancies, rising costs, automation, changing work patterns, and stagnant wages. Navigating this terrain requires understanding and empathy from employers, as well as adaptability and resilience from workers.
As we look to the future, it will be interesting to see how these various factors play out and what solutions emerge in the world of HR to help address the climbs and drops we are facing. For now, it’s crucial for all parties involved to engage in open dialogue and work together towards a more stable and equitable work environment. And remember to hold on tight – we’re all on this wild ride together!
