The Cost of Living Crisis and its impact on Recruitment
The Cost of Living Crisis and its impact on recruitment
The cost of living crisis is still sweeping our nation and it seems it will remain a massive problem in the UK and abroad. UK inflation has risen to a 40-year high of 9.1%. Food costs rose by 8.3% between the 15th of May and the 12th of June, and the average yearly shopping spending is now expected to rise by £380 to £4,960 in 2022.
Our last blog focused on understanding the cost of living crisis and how it will impact everyone. Today I want to take a look at how this crisis will impact the recruitment and employment industry.
What is the impact on the market?
Impact on recruitment
Recruitive found that 48% of workers reported not having had a pay rise this year and that, of those who did, 42% had a rise of 5% or less, significantly below inflation rates. They also found that 17% of workers had been forced to find second jobs to make ends meet, shockingly, this figure rises to 20% of essential workers. They estimate that more than 700,000 care workers could leave the profession in the next year.
CV-Library reports that 75.1% of UK professionals are now considering a new job purely because of the cost of living and rising inflation costs they’re facing. They further found, through analysis of their live vacancies, that salaries were not keeping track with inflation and that many industries were offering lower wages than the previous year.
Retail – 5% down
Sales – 1.6% down
Social Care – 1.2% down
Medical/Pharmaceutical/Scientific – 1% down
We could likely see some changes in attitudes to hybrid and/or remote working: whilst some may be keen to return to the office to work as the price of energy soars and save on heating and lighting as we enter the colder and darker winter months, others might prefer to work entirely remotely to save on astronomical commuting costs.
Equally, for businesses that have seen a decline in office attendance in recent months, it might be the case that we see these employers seeking to reduce their overheads by choosing to close their offices on certain days, resulting in enforced hybrid working. Where possible, employers should remain as flexible as possible to these requests to assist their employees in the current climate.
Increase in additional work
As the struggle to cover living costs escalates, employees now take on additional work- or a ‘side hustle’- to supplement their full-time salary. Overtime and employees with multiple jobs are becoming increasingly common as salaries are not growing fast enough and people need the additional income to survive.
Employers need to be prepared for these requests, ensure they are clear on their stance, and review policies and contracts accordingly, all while keeping in mind the Working Time Regulations to ensure that employees are not doing more hours than they legally should.
Clearly, the cost of living crisis has had a big impact on the employment and recruiting sectors in the UK. These affect job-seekers and employees massively as they struggle to make ends meet. Salary is not rising with the growing cost of living and inflation, causing people to look for alternative ways of making the required income. But what can be done to help? Be sure to keep an eye out for our next cost of living blog as we tackle the different ways we can all support each other and help.