Recruitment sector adopts digital strategies to align talent in growth-driving industries
According to RSM UK’s latest Economic Outlook for Q1 2025, weak growth and stagflation will persist, but the economy should improve as the year progresses.
Inflation is expected to remain at 3% for February, but this is likely to increase to 3.5% in the middle of the year as a result of Autumn Budget tax measures and rising energy and fuel prices.
Neil Thomas, partner and national head of recruitment at RSM UK, looks at:
- the key concerns for recruitment in the run up to the Spring Statement;
- the impact of inflation, Autumn Budget tax measures and geopolitical tensions on sector growth; and
- the outlook for employment and hiring trends in 2025.
Neil Thomas comments: “After a disappointing 2024 and stagflation continuing into 2025, the recruitment sector is hoping to see gradual growth later this year providing economic pressures ease. Increased government spending and consumer confidence should boost the domestic economy but the uplift to employers’ National Insurance contributions obviously presents challenges with respect to pricing and employee engagement. While this may mean a decline in employment, a subdued outlook seems more likely than a total collapse.
“Clearly employer confidence and hiring appetite continue to be impacted by the increased employment costs, inflation concerns and slower-than-hoped interest rate reductions alongside uncertainties around the volatile macro-economic climate. For businesses in the middle market, this means delayed investment decisions, so some clarity is much needed to help plan and alleviate some of the financial strain.”
He added: “Despite challenges, recruiters will be key in delivering the governments growth strategy by aligning talent with growth-driving industries to bridge resource and skills gaps. However, it’s essential that they’re ready to capitalise, demonstrate value and build sustainably through prioritising their client relationships and employee engagement. Data driven management and digital strategies will also be key to maximising workforce productivity and efficiencies within the recruitment process.