Economic Uncertainty and Recruiting Talent - Industry Insight

It’s that time of year where we cast our minds forward to 2023, and begin planning for the year ahead. However, as you’re no doubt aware, the economic uncertainty in the UK at the moment casts a shadow of ambiguity over many companies forecasts, especially when it come to hiring talent. Therefore, I wanted to discover what those in the industry believed would impact recruitment in 2023 considering the current financial climate.

Below are the thoughts and views from a snapshot of well-connected individuals who are acutely associated to the market that we work within. These people believe that it is so important to understand how the approach to recruitment in 2023 may well be different to previous years but there is optimism that with agile thinking, change and difference may not be such a negative.

Read on to hear their predictions on how the current economic environment will impact recruitment in 2023.

Laura Walters - Board Director, Executive Search

Amelia Bampton - Managing Consultant

When reflecting on the tech market in light of everything going on in the economy, the analogy that sprung to mind was that of surfing! Don’t get me wrong, I’m no proficient surfer, writing this from my secret Bondi getaway (it’s written from the very dark and autumnal Northwest, nothing exotic around here). But it’s fair to say that after 20 years working in tech, I’ve seen the industry ride the highs and lows. After such an immense high of the last few years, the immensely in-demand tech skills required for booming tech companies during and post the pandemic, I believe that with the hindsight of knowing (and experiencing) that what goes up, must come down, preparing, and stabilising ourselves for what is to come after that high that has been in tech for the last few years, was inevitable. The extent of which will only be known in time, but the companies planning for the change in pace and learning to navigate the crashing waves around them are those that will succeed.

So, what does this actually mean? I feel companies that have looked ahead and sought out variations of business models that provide diversification in their products or services to spread risk are a step in the right direction. There are different industries that will start to thrive in a changing economic climate, as consumer behaviour changes. As we have learnt from the last few years, pretty much all innovation across industries encompasses tech in some form nowadays, so the tech market will continue! The need for exceptional talent across all tech roles will be needed, but now more than ever, it will be the best talent that is sought, more quality over quantity than we saw in the past few years. Salaries will hopefully stabilise, as we balance out some of the impacts that large London based companies had on the Northwest. When local talent got paid over and above the regional norm for remote only working, pricing local companies out of the game.

I anticipate the speed of attrition across companies may reduce slightly as people look for more job security in a less secure economic climate. But as we have seen across many experiences of riding this economic wave, we experience the ups and downs but with these changing and sometimes challenging times always comes great innovation. Personally, I’m excited to see what inspiring start-ups spring up as a result of some of the challenges we face and help us all to tackle the cost of living in new ways we previously didn’t imagine!

David Twigg – Head of Digital Marketing

The winners at the end of this period of economic uncertainty will be the businesses who are looking at the long term. If you can take managed risks to grow your brand, organic presence and audience loyalty then once the economic environment picks up you'll be in a much better place to drive growth. Right now, you want talented colleagues who are committed to the business. Colleagues who can think outside of the box to make things happen when marketing budgets are reduced, and targets begin to look more challenging than before. 

Darryl Hall - Head of Marketing

This year recruitment has gone from ‘challenged’ to ‘crisis’ for many. For marketing, the lack of candidates for key hires has been a challenge throughout the pandemic. Less people and higher costs for hiring businesses.

With the economy tanking, I have seen a totally new shift that is worth taking note.

More and more, especially within retail having revenue and sales pressures, are cutting back not just on head count. Some are taking the opportunity to trim salaries back to pre-pandemic levels and even further in some cases with new hires. Whilst still contending with a lower candidate count in-market. It’s a wonder why so many are having trouble recruiting. Some businesses will take the conscious path of not having people in position for the sake of saving a little on their marketing budgets short term.

We live in uncertain times economically. Are these short-term pressures we face with increased costs and low demand here to stay? I would say we should likely get used to this being a negative bounce back due to a lot of volatility after Brexit, 2 years of COVID and changes in globalization and current conflicts. i.e., cost pressures will not go away for consumers. Expect higher cost of living but stabilisation over the next 12 months (in YoY % terms).

With this much increase in sustained costs, it’ll take another 5-10 years for wages to get to a place they were before. Meaning consumer demand will be subdued in many sectors for years to come. It’s probably right businesses take a longer term view on demand now with their recruitment needs. This may balance the market out with enough supply as demand. So could improve recruitment in the future with the balance of power less one sided. So long ‘power to the people’.

Kelly Byrne - Co-CEO

Financial planning underpins recruitment, and it’s so turbulent at the moment. We started 2022 expecting 100% year on year growth as we have done in previous years, and every month that’s gone up and down – 40% growth, then 200% growth etc. From an employee and recruitment point of view, this is very difficult to get a grasp on when it comes to planning. Because of this, we’re bunkering down and trying to make it work with what we’ve got, as well as reaching out for external support to bridge gaps where we can. We don’t want to over egg things and get ourselves in a situation where, positively or negatively, we’re having to make massive changes to the status of our employees.

Bethany Bolton – Head of Marketing

Everyone knows when there’s a recession the marketing budget is the first to be cut, right?  Well, not this time. Covid did us a favour with this one, as there’s a realisation that businesses need to grow and push through and they need a marketing team to deliver the commercials. I am sure we’ll see some redistribution of marketing channel spend to the cheaper channels as some budgets tighten. The bonus for marketing teams and agencies is that we have to get creative and smarter with our spend – this always leads to incredible campaigns that just wouldn’t have been thought up in different circumstances.  

To balance the uncertainty in the economy with the need for talent, we’ve decided to replace two permanent full time employees with fixed term contractors – definitely not an approach I’ve ever seen before! 

Adam Moran - Digital Performance Lead, mSix & Partners

Cost of living is a constant thread on internal townhalls and what are businesses doing to support this. For some businesses there is not much being offered in term of addressing through out of cycle pay increases. Instead, wider staff benefits are being promoted to remind people to make use of discounts on any schemes that exist. E.g. this could be reduced mobile phone tariffs or for us at mSix Manchester we are able to benefit from free TalkTalk broadband, given they are our sole client. I have seen businesses such as BUPA offer £1,000 one of sums to assist with this and other sectors, again unable to offer anything to combat this directly outside of either promotion or pay increase cycles.

Remembering back to the first 6 months of the covid pandemic, businesses were reducing salaries in order to keep businesses stable in uncertain times. So you could look at it as the opposite of this.

Uncertainties in the economy can lead to recruitment freezes, but what this can do, is offer opportunity for current team members to ‘step up’ and work in areas or at levels they have not before, ordinarily, the vacancy may have been filled by bringing in external candidates, but in this case team members can gain experience in new areas to assist with their personal development and growth.

I think 2023 will bring new opportunities for people, with roles that had been frozen, coming back off hold. Those organisations that perhaps had not invested in their people may experience retention issues with a greater range of opportunities becoming available. The start of 2022 was very challenging with changes to recruitment processes having to be made to ensure good candidates were not lost to the competition. I am not sure we will be returning to those days. But we will see…

Laura Belshaw - Head of Business, MuscleFood

To continue to grow in business and in particular marketing, one of the key rules to abide by is never stand still. Adjust, adapt and learn. With the current economic climate, you should be reviewing your marketing strategy, your message and your plans to weather the storm.

Here at MuscleFood we are tackling 2 big crisis – the cost of living and the UKs obesity crisis. We’re bringing the two together and working to offer affordable meal plans that mean you don’t have to sacrifice your health and fitness goals during such a tough time economically.  Highlighting to customers the value of our meal plans and adjusting our prices where we can. Never has there been a more important time for brands to show their product is worth every penny, and communicating this is the right way.

There’s no ignoring of the scary times ahead but we have to adapt to continue to grow. Here at MuscleFood we have had a huge restructure which has placed us in an even stronger position, recruiting from within and empowering our inhouse talent to pursue. If you can’t budget to recruit talent in, is there talent in your business that you have been sitting on?

Speaking to multiple friends across the ecommerce industry in Manchester, it sounds very similar across the board with recruitment caps, postponing of roles and tightening budgets. It’s easier said than done, but if you have the right adjusted plans to weather the recession storm, you should still be investing in talent to scale for growth if you can.

Looking forward to 2023, invest in junior talent – thanks to access to more marketing education via degrees and apprenticeships, plus the changing landscapes of the likes of TikTok enabling anyone at any age to become a creator, there is some wild talent out there that businesses can harness, nurture and grow.

Will Bennett - National Account Manager

Taking into account the current economic environment, with inflation now creeping over 10% in the UK, I think there will be a lot of chops and changes to recruitment in 2023. Employers face a massive challenge in supporting their current employees, in particular financially. Based on my experience, salaries more than not will rise in line with inflation, although a 40 year high will make this difficult to come by. If employers fail to offer financial support via a salary increase, then a lot of employees will consider their options elsewhere, in order to support themselves with the cost of living. If employers are unable to offer salary increases then other forms of support may be required in order to retain their employees, which could be anything from flexible working (meaning less money spent travelling) to financial incentives/rewards (to help motivation).

From an employer point of view, where costs have also been incurred due to inflation, then cuts or restructuring may be required. They may seek potential employees that are versatile and efficient in covering several roles as opposed to roles related to specific expertise or knowledge. This approach would cut down head count but offer an individual more financial support than their previous employer. Therefore, this and the above, will likely lead to a lot of movement and opportunities in the market. 

In conclusion, as with any forecast especially one within our current economic climate, things can never be certain - however there is a general sense of optimism. The feeling that whilst things are going to be different and at times unpredictable, opportunities will always arise to allow people and businesses to continue to grow. We have to take the leap into the unknown and as we learnt to pivot through the challenges of the last few years, we will do so again. We have learnt to take the positives, learn from the challenges and lean on those around you to develop.

If you would like any advice when it comes to building your team for the year ahead, then please don't hesitate to get in touch!

Read our latest news here.

Check out our digital jobs here.

Take a look at our marketing roles here.

Check out all our job opportunities in Technology here!

Fancy a new analytics challenge? Click here!  

If you're looking for a new role, get in touch with us today! 

If it’s creative roles that you are after, click here.

Progress your career with a brand new Contract role? Click here!

To get the very latest jobs, news and blogs follow The Candidate on Linkedin here!

If you would like to feature on our blog, get in touch!