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UK job market trends 2023: Our Distinct predictions

With 2022 being a year of unexpected events, many are wondering what’s on the horizon for the UK job market in 2023.

With the cost of living crisis, global unrest and property and energy prices wildly fluctuating, it’s understandable to hold a healthy amount of caution. However, rest assured that with a little insight and some support from our team at Distinct, you can approach the new year with the confidence to find a new role or fill a position. We’ll take a look at some of the big job market trends for 2023 for candidates and business owners, to give you the inside track on what to expect.

Digital Skills

The digital skills gap continues to be a growing topic; new developments in AI are moving quickly whilst traditional job roles scramble to keep up with the needs created by these new automated workflows. We’ve seen this movement directly affect the trends of UK job markets with emerging conversations around the growth of new roles and questions about the ‘future of work’.

For example, payroll automation has freed up teams to focus on improved customer service or planning new initiatives, whilst experimentation with content generation products like ChatGPT is abuzz in marketing circles as a tool aiming to speed up repetitive tasks

Additionally, low-code/citizen developers have become more common to help with simple to intermediate technical tasks. This has introduced a lower barrier of entry to technical and IT roles, which in turn reduces the stress on more experienced technical team members.

These tools which are helping to usher in a new age of automation are not threats to candidates – but rather opportunities and should be seen as potential avenues to differentiate yourself from the competition, by picking up one or two of these emerging skills. By utilising some of your time to learn more about the tools making a splash in your industry, you can stand out from other candidates and demonstrate your ability to adapt to new market demands. 

Increase in Temp/Interim Hiring

Interim hiring is a valuable tool for employers as it allows for workforce scaling quickly and provides support to existing teams. Alongside giving employers a quick way to cover a vacant role whilst they search for a long-term hire, some interim workers are also open to the possibility of transitioning from temp to perm if they are a good match for the business and duties of the role.

FTC, temporary and interim roles are also beneficial for candidates who want to transition into different duties or sectors, as this gives them a chance to test the waters and see if that type of role is right for them – not to mention gaining exposure to a wide variety of businesses and cultures.

In a discussion with Claire Fletcher, our Manager of Temporary & Interim Recruitment, she shared valuable insight for hiring managers and businesses;

“As and when the market gets tighter – and with there already being a focus on cost savings as we begin the new year, one of the first things that tend to happen is businesses putting a hold on hiring staff; permanent and interim alike. However because the market last year was quite candidate short, there are still the same requirements there. This may now result in an increase in temporary hires within some organisations, and as we enter February, we’re starting to see the interim recruitment market become busier.

The biggest advice I could give to business owners following last year is that because of IR35, a lot of hirers did (and still do) want to recruit talent on a fixed-term contract basis, however, that means those workers are employed (and payrolled) directly by your company.

If you need to recruit but you haven’t quite got the budget there entering 2023, you could instead look at day rate or interim as a solution to this, as those workers aren’t paid directly by your business – they’re contracted by either a limited company or payrolled by an agency or umbrella company.

In the event of businesses beginning to struggle – possibly affected by conditions in the market, we may also see an increase in interim recruitment to help them turn the business around, make it more profitable, and help with cost savings.”

To find out more about our Temporary and Interim recruitment service, get in touch – let us know your hiring requirements, or what you’re searching for in your next role. 

Talent Scarcity

Employers are also feeling the pressure of the 2023 UK job market. Following the revelation of a UK labour market trend which remains below pre-pandemic levels, competition for candidates will be high this year. As such, business leaders need to look for ways to ensure they hold on to their best staff, either through internal promotion and training, or attracting new talent with perks that workers want.

Knowing what workers want is key to winning over candidates and this can be a benefit for both employers and employees. For candidates, it means identifying what’s important to them – be it the paycheck, time with their family, or room for development, and looking for roles where these needs can be met. For employers, it means looking at what you currently offer to candidates and adapting this to best suit the perspectives of the talent you want to attract.

With this scarcity, we could also expect to see more opportunities appear for entry-level positions, as companies look to upskill inexperienced candidates in response to difficulty with sourcing more experienced workers. This means graduates and those in roles with less experience or responsibility may find more opportunities to grow their skills in 2023 – which in turn can only boost the economy and empower businesses to build on further success.

Leadership Skills

Employers may have to adapt to the new market as demand from employees for more personal time or progression increases. Whether it’s a desire for hybrid or remote working, flexible hours, resources for mental health support, or skills development – employers need to understand their team in order to prevent their top talent from leaving for more attractive opportunities. 

In 2022 we witnessed what happens when leaders fail to support their team, in the form of quiet quitting. At all levels, be it CEO, managers, or department heads, leaders should ensure they are up to date with business practices, know how to listen to their workers, and keep lines of communication open so that their employees feel heard and appreciated.

Flexibility 

“I’d personally predict an increasing number of candidates wanting more flexibility/choice, whilst more companies mandate their people back in the office.” – Louise Carling, Talent Acquisition Partner and HR recruiter.

Last but not least, flexibility is a factor which developed out of lockdown and continues to be front and centre for most candidate decisions. Flexible hours and even 4-day work weeks have become more commonplace to balance out family life and ensure healthy lifestyles, however on the other side of this, towards the latter half of 2022 we also observed a number of employers pushing for more ‘in-office time’. 

This tug of war will be interesting to see play out and only time will tell if the smaller pool of available candidates will drive businesses to be more flexible, or if the cost of living and a need for security will make candidates more inclined to return to traditional working conditions out of necessity. No matter the outcome, flexibility is a key factor which we see staying in our minds for years to come. 

“In terms of working from home versus being in the office, generally we tend to see that outside of either end of the spectrum (I.e. working from home full-time or being in the office full-time), the majority of workers across all industries now expect, rather than just enjoy, flexibility.” – Alex Alcock, UK Growth and Strategy Director

Distinct: Your advisors on the UK job market in 2023

With these emerging trends being open to change and develop as the year progresses, the 2023 UK job market is a tricky one to predict. However, whether you’re a candidate or an employer, by keeping an ear to the ground and sourcing insight from our specialists in the industry, you can remain well-positioned to adapt.

As a leading Midlands-based recruitment agency,  at Distinct we bring employers together with like-minded individuals by focusing on a people-first approach. We go beyond the CV to understand our clients’ goals and match jobs to individuals who will thrive. Contact our Nottingham office today.

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