Inflation Pressure

Employers expect inflation to have a bigger impact on the labour market than Covid-19.

Totaljobs Hiring Trends Index, a quarterly survey of more than 1,000 HR decision makers carried out by YouGov suggests that higher inflation and the subsequent cost of living will have the biggest impact on the labour market in 2022. This influence struck a chord with 62 per cent of businesses compared with candidate shortages (45 per cent), a high number of Covid cases (44 per cent) and Covid-19 restrictions (44 per cent).

With the first quarter of 2022 well underway, skills shortages continue to impact over a third of businesses (36 per cent), while just under a fifth of employers (17 per cent) will find it challenging to offer competitive salaries in today’s market.

As the candidate-led market continues to evolve, the research reveals that 42 per cent of UK workers want to get a higher salary in their job within the first half of 2022. A growing trend since the start of the pandemic has been the rise of the career change, and this looks set to continue, with 71 per cent of jobseekers open to working in a different industry. A fifth (21 per cent) of people plan to look for a job within the first quarter of 2022, or are already looking.

Following the impact the pandemic has had on mental health as well as physical health, 69 per cent of businesses increased their focus on staff wellbeing in 2021. Over a third (36 per cent) expect this to increase further in 2022, showing businesses’ continued commitment to the welfare of their employees.

“Despite the disruption that Omicron absences are causing for some employers, our research shows that UK businesses expect higher inflation and the subsequent rising cost of living to have the biggest impact on the labour market in 2022,” commented Jon Wilson, Totaljobs CEO. “The record-breaking salaries that have already emerged in some sectors are a key indicator, with over a fifth of businesses seeing the need to offer competitive pay as a challenge as we start the new year.

“Recruitment continues to be in full-swing,” he continues, “with a fifth of businesses planning to ramp up their recruitment in the first quarter of 2022. Meanwhile, thousands of candidates see this job market has swung in their favour, leading to a fifth of people planning to look for a new job before the end of March. For many, this shift in dynamics is a prompt to take the leap and change careers. For recruiters, considering the importance of transferable skills and using contextual recruitment techniques has never been more important to find and attract the best talent.

“As well as recruiting the people they need, employers continue to see retention as one of the top challenges their business could be impacted by in the first quarter of this year,” said Wilson. “However, 62 per cent of UK workers are satisfied in their current role. Factors influencing this may include improvements to work/life balance, as well as employers putting more emphasis on the mental wellbeing of staff since the start of the pandemic. A significant 69 per cent of employers heightened their focus on health and wellbeing last year, and over a third plan to invest further in this in 2022, which will help staff feel valued.”

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