The London job market is experiencing a period of significant change. Rumbles left over from the pandemic are still affecting the market. Some areas continue to show a decline, and recruitment factors are both diverse and complex. The extended period of time that ‘some; employees were off work has had a knock-on effect to expectations of being back ‘on site’ and hybrid working consultations are still ongoing.  Negatives to the hybrid model are that new starters and younger workforce are not receiving the full work experience and not ‘picking up’ observational learning opportunities.

Whilst some employees were ‘at home’ on full pay their return to work has been difficult and challenging. In contrast those employees that remained in work have retained a good work ethic and, in some cases, (not all) better emotional health and a more balanced view of an ‘in office working life’.

Employees within the service and facilities industry that ‘worked’ throughout the pandemic have raised awareness of the part they played and the service areas that continued to operate and support business. The flip side to this coin is that those individuals who remained in work, when others were not, are to some degree seeking recompense.  This is ‘sought’ as a percentage increase in their base salary, but if you give to one area then other labour divisions will also seek this enhancement. One way to resolve this would be, one off bonus payments to those individuals who remained in the workplace. This method would be easier to administer and would not form part of the lasting salary budget.

Factors for consideration in 2024 – 2025 include:

1.    A possible flatlining of growth was highlighted in 2023  (The Guardian). This still hangs in the air and whilst the City hopes this is not going to be the case it is still a ‘topic of conversation’ affecting salary decisions and financial budgetary outlays. (Kings)

2.    Overheated Levels: The job market had reached overheated levels, and the cooling is a reversion to a more sustainable state (Reuters).

3.    Rising Unemployment: Unemployment has hit its highest level since 2021, contributing to the cooling trend - However, at 4.3%, it's under the 5% threshold so is still considered 'Full Employment' (Bloomberg).

4.    Government UK Labour Market statistics quote that ‘In the year to November 2023 to January 2024, employment, unemployment, and economic inactivity levels have all increased, although there has been a fall in the employment rate.  There was a slight fall in nominal pay growth, but an increase in real pay in the three months to January 2024 (Government UK Labour Market stats)

5.    However, Kings would argue - was the pandemic and the resulting ‘time at home’ and subsequently the desire to embrace ‘hybrid working ‘a catalyse for rising unemployment? as employees are unwilling to accept a role ‘that is now incompatible with their lifestyle choices’. Employees are making it clear that they ‘wish to work at home either for all or part of the week’, thus turning down job opportunities that do not offer this, and the push on employees requesting improved terms and salary packages.  So, should the ‘stay at home’ individuals receive a full pay packet? In contrast to those attending their workplace? – Kings forecast that difficult employment resource decisions will need to be made at HR level in the coming months/years. Kings

6.    Employers need to consider implementing more flexible work policies to stand out as an employer of choice. This will also appeal to self-employed individuals seeking greater income stability and job security, bearing in mind that this division of the workforce found it difficult (or were simply unable) to tap into furlough opportunities. Thus, they lost out financially during the pandemic. Individuals who were previously self-employed are often a good employee choice.  (Kings)

7.    Cost of Living Crisis: The squeeze on household budgets due to rising living costs has led to more people looking for jobs. (However, these jobs needed to be very well paid and/or employees were forced to take on several jobs to meet their bills (Kings). This increased supply of workers, coupled with weaker demand for labour, has contributed to the unemployment rate rising by 0.3 percentage points to 4.2% between the first and second quarters of 2023 (The Guardian).

 

In conclusion the UK job market is turbulent. However, there are good opportunities for companies who are willing to rethink how they hire and work. Those looking for work or thinking about changing their position must stay alert, be flexible and adaptable to their employers needs.