Soaring energy costs and inflationary pressures
The UK economy has performed better than expected with predications of slowed growth and a future recession looming. Despite these economic factors, the UK jobs market has held up well. Unemployment has dropped to 3.6 per cent, its lowest level since 1974. So, what is driving the UK’s success?
First, we need to look at Remote Working Practices. Since working from home became the “new norm” in 2020, the workplace has evolved to grant employees greater flexibility and freedom. It removed the need to commute to a physical place of work and staff could log on from home and complete their duties. More was able to be done around the workday such as early morning and lunch appointments.
The independence was something that many weren’t ready to give up and following the consecutive lockdowns when the return to work came about, many employers chose to continue with the working practices set up. They saw the benefit of increased employee satisfaction and productivity. The Office for National Statistics reports that 52% of remote workers felt that it was quicker to complete work and that they had fewer distractions while working at home.
Where Are We Now?
Today, around one in seven adults (14%) work from home in the UK. This is more common for some sectors than it is for others with almost 80% of those in information and communication roles and nearly two-thirds of those working in professional and scientific services working remotely.
The second fact is the Gig Economy. Some have even taken it a step further by launching themselves into the world of freelance work, giving up stable, permanent contracts for self-employment and complete autonomy. Prior to this, the UK had an already established “gig economy” where its freelancer market was only second to the US. Now, there are over 2 million freelancers in the UK, contributing to £125 billion towards the economy.
What This Means for Businesses
For businesses, it means new ways of working and adjusting. Not only working with contractors but sourcing talent in new ways and making positions more attractive. Now, firms may need to use freelancer platforms to source talent and look at ways in which make positions more competitive and attractive. Where earnings and freedom hail, businesses can offer greater protection, employee rights and benefits.
Also, as a business you may already have teams working from home, presenting challenges such as communication. That paired with a line of freelancers has the potential to complicate matters.
On the other hand, this shift can help businesses by allowing them to be agile. When demand fluctuates, it can be costly for business as there are still overheads that need to be paid such as staff wages. Hiring freelancers means that you can scale back when necessary and operate more efficiently.
What the future looks like for businesses
The passing of Queen Elizabeth the second has had a significant impact on the nation, we have a new king, a new prime minster and inflation has hit the highest figure in 4 decades. Businesses and consumers’ finances are being squeezed by historic inflation that is threatening to tip the UK into a long recession. Some 69 per cent of firms expect to be hit by higher energy costs over the next three months, eating into their capacity to survive, according to the Confederation of British Industry. Extra government spending will reduce the severity of the slump, but the UK is still likely to tip into a technical recession, possibly as soon as this quarter due to the lost working day for The Queen’s funeral. But on the positive note, firms are still taking on staff, but “recessionary fears are expected to put downward pressure on employment as businesses exercise caution in the coming months,” Kaley Crossthwaite, partner at BDO, as quoted by Jack Barnet of City A.M. “Soaring energy costs and inflationary pressures are headwinds we can expect to become more severe in the coming months, exacerbating the economic and political uncertainty both firms and consumers feel this winter,”
Lightening the workload
If the pandemic highlighted one thing, it is that your employees’ work-life balance cannot suffer for the benefit of your organisation. Kirkwood Consulting has a pool of experienced consultants and freelance professionals as a business we always think strategically about how to get the best and brightest freelance talent out there with a primary objective of enabling our clients to be more agile, by proving experts for specific projects, whilst recruiting for your vacancy. In a climate where staff shortages and strong wage growth is putting upward pressure on inflation, we are here to help.
If you would like to diversify your talent pool, or simply want to lighten the workload then do get in touch to learn more about how we can help you with your recruitment and training needs.
