In the UK: Belt-Tightening in 2024

The hope has been that 2024 will be better for UK firms. Last year, rising interest rates, uncomfortably high inflation, and a relatively tight labor market left business leaders in a tough spot.

In fact, 2024 may be better for some countries; unfortunately, Britain—where economic growth is set to remain noticeably low—may not be among them. According to forecasts from the economic-data website Trading Economics, the UK economy will grow by around 0.4% in 2024, rising to 0.5% in 2025. The same site forecasts the US economy to grow during the same years by as much as 1.7% and 1.8%, respectively. Experts blame everything from high energy prices to high European consumer-goods prices, along with still-high interest rates. “The effect has been like slamming the brakes on the economy,” says Grant Duncan, managing director and sector lead for media, entertainment, and digital EMEA at Korn Ferry UK.

In wake of such developments, experts say, the hiring of outside candidates for permanent jobs has waned across industries. Indeed, the last quarter of 2023 was the worst hiring environment in the UK since the 2009 financial crisis, according to analytics company S&P Global. Companies are looking for other solutions, such as internal promotions or extra training, Duncan says. “That way, you keep your best people,” he says. “It will likely be upskilling and training rather than external hiring.”

Duncan also says keeping employees engaged through development and career progression will be important. A key part of that is a robust onboarding process, he says. When people are focused, they want to stay rather than quit. “Human Resources’ internal-talent managers have to keep their eye on the retention ball,” he says.

Some savvy executives find that flexibility can respond to the challenge of slow growth that’s coupled with stubbornly high costs, says Ben Frost, a senior client partner in Korn Ferry's Products business. For instance, companies with strong brand names or pricing power may be able to pass along the increased costs to consumers by raising prices. Or they may be able to shrink the size of product offerings while keeping the price the same.

This was particularly notable with foodstuffs around the recent holiday season. For instance, the price of a family Christmas dinner increased by an average of £105 as prices rose and packages shrank, according to a report in London’s Evening Standard newspaper. “The general answer we are hearing is companies are being agile,” Frost says. “Agility is the answer.”

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