As the rash of hiring and firing reached Benny Hill proportions in Westminster, the UK jobs boom was already slowing down. In June, both permanent appointments and temp billings saw their smallest rise in 16 months, according to the KPMG and REC, UK Report on Jobs.
Recruiters in the survey said employers were more hesitant to hire because of greater economic uncertainty, and job seekers were more hesitant to change jobs for the same reason, leading to the sharpest fall in job seeker availability for three months.
This shortage was another factor putting a damper on hiring, despite ongoing attempts to lure applicants with higher pay. However, growth in starting salaries and temp wages also hit 10-month and 12-month lows respectively.
REC CEO Neil Carberry said the data showed the UK was likely “past the peak of the post-pandemic hiring spree” and that the big question now was whether inflation would merely bring the market down to normal or send it into a slowdown. Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, added: “The UK jobs market may be more fragile than it seems.”
How will Government changes impact employment?
With Boris Johnson about to be out of a job, the appointment of a new leader and job seeker will inevitably affect the market. Here’s what we predict will (and won’t) happen.
1.Will the corporation tax hike still happen?
If he wins the leadership election, we can assume Chancellor-turned-job seeker Rishi Sunak will probably go ahead with his planned rise in corporation tax from 19% to 25% on 1 April 2023. Whether rival Liz Truss plans to honour his decision remains to be seen.
The expectation of a tax hike will naturally have led businesses to tighten their budgets, which in turn will influence hiring and pay. If this decision is reversed, it could drive increases in both.
2. Will the Health and Social Care levy be cut?
The Government’s decision to increase National Insurance as part of the new health and social care levy has been controversial, with many employers, professional bodies, and political parties calling for it to be delayed or cancelled in light of the cost of living crisis.
Whether the new Prime Minister and Chancellor will heed these calls is unclear. Whatever policy changes the next few months bring will be significant for all businesses, as they start to think about budgets and strategic business plans for the 2023/2024 financial year.
3. What will happen to the Employment Bill and Bill of Rights?
The Employment Bill and Bill of Rights have both been in the pipeline for some time–since 2019 in the case of the Employment Bill, which sets out new employment rights around carer’s leave and neonatal leave, as well as other important changes. With no news on its progress since the start of the pandemic, we will have to see whether the new Prime Minister plans to take it forward.
The Bill of Rights, currently progressing through the House of Commons, will replace the Human Rights Act, and will set out new policies for employees and employers on several issues, including social media use and possibly vaccinations. With a new Prime Minister, it’s unclear how high a priority this will be–again, we’ll just have to wait and see.
Whether you’re an employer or a job seeker, if you’d like some expert help with strategic planning in these uncertain times, please give us a call or drop us an email today.