ONS labour market data – “Average salaries are being hit by a sledgehammer” – reaction from recruiters and HRs

by | Jan 17, 2023

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Following the ONS Labour Market data published this morning, Newspage have collated the thoughts of industry experts who have given their reaction.

Lily Shippen, director of London-based recruiter, Lily Shippen“Unsurprisingly given the force of the headwinds facing the economy, the unemployment rate continues to edge up. Soaring inflation, reduced demand and rising interest rates are taking their toll on a growing number of companies. The balance of power has now firmly shifted to employers. Candidates still have options, and there are fewer job-seekers than jobs, but companies are not as flexible as they were a few months ago. Companies are still hiring but are more measured in their approach and less willing to compromise on experience. It is now mainly business-critical roles pushing forward to being hired.”

Lauren Thomas, economist at Glassdoor: “This report has set the tone for the turbulent economic year ahead: still high economic inactivity and low but rising redundancies are two of the many mixed signals the labour market is giving off. The large numbers of workers who left the job market since Covid show few signs of returning, with the possible exception of early retirees aged 50-64. This group could re-enter the labour market as they face a once-in-a-generation cost of living crisis without the comfort of an inflation-adjusted state pension. Recent mass layoffs in tech sparked concern but it’s unclear how much they’ll impact the UK-specific redundancy rate given their global scope. Regardless, Glassdoor data shows tech employees are increasingly nervous about the future. Negative business outlook for their employers is 76% higher than at the start of the pandemic.”

Katie Elliott, director at St Albans-based HR specialists, HR Katie“After the candidate-driven market of the past two to three years, things are definitely swinging back more in favour of employers. HR is likely to be under more pressure this year, as both employers and employees will be feeling the squeeze on salaries. Average salaries are being hit by a sledgehammer in real terms. It’s going to be a key time for companies to really focus on employee wellness, as people trust their employer far more than the government. Better education around finances and spending, promoting flexibility around caring arrangements and mental health support across all sectors are likely to be welcomed as lower cost alternatives to blanket pay increases.”


Saira Demmer, CEO at Midlands-based SF Recruitment: “There is a huge amount of uncertainty looming over the economy at present and pay is under considerable pressure due to inflation. The money people earn is being squeezed hard in real terms. However, a lot of the candidates we speak to are still looking for flexible working. The pandemic triggered a paradigm shift in the mindset of employees and it’s one that will not be reversed by the economic uncertainty we’re facing.”

Emma Summers, founder of Bath and Bristol-based Juice Recruitment: “The sheer level of economic and political uncertainty is definitely making employers more cautious about hiring at present, which will explain the fall in job vacancies. Shoot from the hip has been replaced by sit-tight. This is in stark contrast to the recruitment hiring trends we saw earlier this year. The permanent jobs market has slowed for the first time in two years but the temporary market remains strong, suggesting that confidence in UK Plc is waning.”

Chris Maslin, director at Tunbridge Wells-based employee ownership specialists, Go Eo: “The jobs market is stagnant, employees’ confidence moribund. Unemployment may still be low but so is the motivation of many employees as the economic storm clouds darken. From what I see, businesses and employees are currently happy to stick with what they’ve got. With so much instability in the country, applying for a job that offers £1,000 a year more than your current safe job isn’t worth the risk for employees. Equally, businesses know unemployment is low so aren’t rocking the boat, even with underperforming employees as they may be hard to replace.”


Louise Burns, director of Tyne and Wear-based Nineteen Recruitment: “While there is still a definite shortage of candidates in some industries, on the whole the balance is starting to tip back in favour of employers. What candidates are looking for in job offers also seems to be changing. Where they were recently looking for increased flexibility, benefits and high salaries, candidates’ priority is now stability. That’s the impact of inflation on sentiment. Employers able to navigate through these challenging times will be holding all the cards for the foreseeable.”

Sam Alsop-Hall, Chief Strategy Officer at Birmingham-based healthcare and NHS recruiter, Woodrow Mercer Healthcare: “It’s a tough time for employers, but hiring is still happening. Companies that are proactively seeking to expand their workforce will have the upper hand in the current job market. The economy is in a recession in all but name, and it’s clear that unemployment rates will rise. But savvy employers who are willing to take a risk and invest in their workforce will be the ones who come out on top. Now is the time for employers to seize the opportunity and build a strong workforce for the future. Those who hesitate will be left behind. The UK job market is in a state of flux, but those who can navigate it will come out victorious. The future belongs to the bold and the brave.”

Natasha Maddock, co-founder at Neston-based events company, Events Made Simple: “As sentiment around the UK jobs market slips, the mad rush to recruit from 2022 seems to have settled down. In the midst of economic uncertainty and rising inflation, many businesses have implemented hiring freezes or added steps to recruitment processes resulting in fewer new roles being advertised than previously. With hiring decisions becoming more considered, many companies are switching focus to employee engagement and staff retention. But this doesn’t mean the hunt for top talent has come to a halt. There are still sectors looking to onboard new staff as well as candidates on the search for something new. Companies that can offer a fair salary and genuine flexibility in the workplace are in a prime position to attract the best candidates, especially those seeking a better work-life balance.”


Rob Tice, employment lawyer at Derby-based HR legal services provider, BMcPrecept: “Employers are struggling to find staff for both skilled and unskilled roles. We have seen a number of cases of people having to hire employees that they perhaps would not have a year ago, simply to fill a role. We are also seeing employers delaying decisions on performance management as they need to keep the employee despite the employee’s performance not being at the level needed. Employers are also at risk of losing their best employees and they are having to take steps to keep them. Pay is an obvious start but employers are looking at other more innovative ways. Increasingly, employees are valuing benefits rather than just salary. That’s why hybrid and more flexible ways of working are here to stay. Other incentives, like employee benefits, are another way to attract and retain staff.”

Danielle Asano, managing director at Derby-based recruitment and HR consultancy, Cherry Professional: “With the future feeling uncertain, many workers are now staying put, prioritising job security. Many are concluding that a job they’ve been in for some time is more secure than a new one. What is apparent is that, when it comes to attracting talent, it is still very much a “buyer’s market” and employees are in the driving seat, looking for improved benefits, flexible working, purpose and culture, and someone to invest in them.“

Nicky Acuna Ocana, managing director at professional services recruiter, Ambition: “Despite the fact the economy is very possibly entering recession, we are still in an employee-led working world. What will be interesting to see, as the economy contracts and recruitment slows down, is if this starts to flip over to being an employer-led market. It is important to remember that we have had unprecedented job vacancies in the past 18 months and, unlike previous recessions, we are heading into a tough market with high levels of employment. This means that any drop in job flow is a return to a more normal market as opposed to pushing into high unemployment rates.”


Ryan Venner, Managing Director at Calne-based recruiter, Premier Jobs UK: “There are dark clouds of uncertainty blanketing the economy but employers are continuing to push ahead with recruitment with a view to achieving their planned 2023 goals. Due to a shortage of available experienced talent, candidates still have the upper hand currently, a trend that has been present for several years now. As a result, businesses are still seeking advice on how to remain attractive before they launch a job ad, as it’s about more than just pay these days, but flexibility, too. We’re finding businesses that are embracing new talent by supporting trainees are making great headway. There remains a particularly strong pipeline of individuals looking to enter the financial services industry.”

Marcus Nanson, managing director at mortgage and financial services-focused NRG Resourcing“There’s a tangible uncertainty among employers. It’s slowly but surely changing from an employee to an employer market again. However, with different opportunities available to people post-Covid, I don’t believe it will ever be a completely “get what you’re given” jobs market again. The general public are more in tune with what they want work-wise now, and are more willing to wait for it, or leave for it. Real terms pay is being hit hard but companies who provide flexible working, which saves people money on commuting and other costs, can go some way to help address this. As the cost of living soars, flexibility is a great perk that works well for businesses that can function well with it.”

Debbie Denyer, an executive coach at Beaconsfield-based Coach The Difference: “At a time when employees are being hit by the cost-of-living crisis and looking for increased wages, or alternative employment opportunities, hiring is starting to slow down. With a recession potentially looming, companies are under pressure. They’re looking for alternatives to offering pay rises to retain employees, such as offering travel and childcare cost reduction benefits. The news is full of reminders that during difficult economic times jobs become less secure. If the warning signs of a long recession are realised, unemployment is likely to rise. The important question for employers is how to keep those employees, who would usually have moved on, engaged. Leaders should have conversations with their employees about what motivates them and how can they best use their strengths. This will create opportunities to increase their productivity and happiness.”


Tahina Akther, barrister and co-founder at Wildcat Law: “We are seeing an increase in enquiries from people who have been dismissed and businesses looking to make people redundant. While this is not yet a tidal wave, it is certainly showing signs of being a storm swell. Some companies are taking the opportunity to protect their business for what they see as difficult trading times ahead, by reducing wage budgets. Those that are being laid off seem to be able to find work quickly due to other companies still actively hiring but the warning signs are definitely flashing. We are also seeing an increase in enquiries from employees who accepted jobs on the basis of being able to work flexibly and are now finding that their new employers are changing what that means in practice. One employee told us that their employer had promised they could choose how many and what days they worked in the office and understood that they had childcare commitments. They are now being told they have to work three set days in the office or face losing their job. As the economy stalls, the goalposts are starting to shift.”

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