Foreword & Contents

By Mark Cahill Managing Director, ManpowerGroup

Foreword

The last year has been one of two halves, for the economy, employers and the workforce. Our data and clients continue to show strong hiring intentions despite varied economic headwinds.

At the end of 2022 we were rounding off a bumper year with a post pandemic boom in hiring. And now, we’re seeing employment levels move back towards something of an equilibrium, following those record job vacancy highs seen this time last year.

Subsequently, fears of a recession were discussed as the cost of living crisis grew and industrial action took place across the UK. Today, talks of a recession have been pushed back by economic forecasters and talent shortages remain at a near 20-year high, with 80% of British employers unable to fill roles. As demand gradually reduces in terms of advertised vacancies, and we're seeing the supply of workers move upwards, helping to soften the landing, the big question still remains: are these workers skilled in the right areas to help the UK economy grow?

Hiring intentions are not translating into filled vacancies. There is a mismatch between what workers want and what employers are offering. Employers across the country are still keen to take on new talent, and workers want to take on higher paying roles with greater development opportunities. However, they aren’t seeing these jobs advertised. Job descriptions are going unread because they aren’t offering the skills growth workers want. Employers need to be clear about the progression opportunities and the training they are providing.

Approximately 10 million people in the UK currently do not have a job, with 1.2m of those being unemployed and the remaining 8.9 million classed as economically inactive. It’s time to bring these workers into the fold. You can read more about this here.

Ongoing talent supply issues are restricting UK businesses’ ambitions to grow. Aligning what British employers need with the shortage occupation list will bolster our global competitive standing. Read how we’re tackling this through upskilling programmes and also our Cross Border work.

Candidates are under their own pressures in these economic headwinds, but one advantage they continue to hold, is choice. Many are looking for increased flexibility, a steady income, and training and upskilling opportunities. Find out more about what workers want.

Employers who seek to match these needs and hire based on potential rather than previous experience will hold the keys to a brighter future.

We can’t forget the demand for business transformation, digitisation and the growth of Automated Technologies such as ChatGPT. Nearly all sectors are considering how they can use technology to ease the admin burden and free up employees to focus on innate human abilities which we know are in high demand. These are roles in business transformation, cloud applications, software development in an office scenario, and we’re also seeing a great deal of demand in care and nursing, and for warehouse operatives with specialist skills for the logistics industry.

One trend which has only strengthened in the last year, is the demand from consumers and companies alike to ensure we are all doing enough for the planet, and for diversity. It’s no longer enough to file your ESG report and carbon offset.

Our candidates want to work for organisations that stand for more than just profit, and our clients are holding us to consistently higher standards, and us them. We found that less than half of businesses surveyed have long-term ESG goals, yet 64% of workers want to work for organisations that positively contribute to society. At ManpowerGroup we are continually reviewing and improving our policies and procedures to ensure they are up to date with industry and business standards. This includes measures to promote equality in the workplace and eradicate discrimination. Our Diversity, Equity, Inclusion and Belonging (DEIB) strategy is a key pillar to our work across the UK, both internally and externally. You can read more here, in our Working to Change the World Plan.

When I think to the end of this year, I remain cautiously optimistic about what the labour market will bring and how we will rise above these challenges presented. Employment is a lagging economic indicator, so the dip in demand and the decreasing vacancies we’re seeing at the moment are related to the talk of recession earlier in the year. The labour market is cyclical and we may anticipate further shifts in hiring demand. These would likely be an increase in temporary hiring and a decrease in permanent roles. But we’re not seeing this yet. Across our business, our clients are hopeful and so are we.