A Slump in Britain’s Hiring

Two years ago, British companies couldn’t find enough people to work for them. It was the Great Resignation of 2022, and salaries soared. 

But things have changed dramatically since then. New job vacancies in the UK have dropped by a staggering 23% through the end of November versus the same time last year, according to data from job-posting website Indeed. Britain is also far behind other rich countries such as Germany, Ireland, the US, and Canada, in which job openings dropped between 5% and 15% over the same period.

The British jobs slump is due to the economic slowdown, with growth falling to 0.1% in the third quarter, down from 0.7% at the beginning of the year. The Business Confidence Index has also fallen, from positive in the second quarter to pessimistic in the second half of the year. 

“The recruiting tap is turned off,” says Tim Manasseh, Korn Ferry’s senior partner, EMEA, for global consumer products. “It is an historic period of shake-up.” He cites several issues that have contributed to the current situation, including higher payroll taxes. He also says Britain’s general election last summer caused some business uncertainty, as did the war in Ukraine, higher energy prices, and the introduction of artificial intelligence into commerce. 

Overall, companies large and small say they are being financially squeezed as sales slow and costs of materials increase. Inflation hit 2.3% in September, which is above the Bank of England’s policy target of 2%, and up from 1% the previous month, according to government data. Some companies are saying they don’t know how they can continue to compete because of across-the-board costs, says Stuart Richards, sector leader for consumer products in the UK and EMEA. “It isn’t going to be a spending spree on new talent,” he points out. 

Instead of hiring new workers, savvy executives are choosing to invest in developing the existing staff, Manasseh says. These employees already know the company culture, and internal investment will likely be less expensive and more tailored to specific roles. “It’s a build-versus-buy approach,” he says. Other leaders are deciding how many people their firm needs to employ on a sustained basis and how many can be interim contractors. “It’s to plug specific gaps that can’t be delayed,” Manasseh says. 

No matter how executives approach the changing employee landscape, experts say there are some things that can help calm the workplace. Clear communication to staff at times of tremendous uncertainty is necessary, says AJ van den Berg, a Korn Ferry London-based senior client partner who advises business leaders on how to navigate the disruptive change. “It’s the responsibility of the executives to keep morale up and to move the organization into a growth environment,” he says.

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