The economic research arm of Indeed, Indeed Hiring Lab provides unbiased, objective global labour market data and analysis that aims to inspire new conversations about the state of work. Here’s a look at our recent findings, with commentary about what they might mean for business, HR, and talent acquisition leaders in the UK across 2024.

Hiring demand finally softening to pre-pandemic levels

Indeed Hiring Lab’s most recent data shows the post-pandemic hiring boom is finally in the rearview mirror, with vacancies having largely normalised. Business and people leaders are likely to breathe a sigh of relief at the news, following several years of mounting pressure on recruitment.

Nonetheless, the news isn’t all positive.

Lower demand for people creates breathing space from a recruitment perspective, but Next CEO Simon Wolfson warns that 2024 ‘won’t be all plain sailing’. He predicts the softening employment market ‘must weaken’ consumer demand, given the knock-on impact of people having less employment opportunities.

Easing pressure on recruitment might translate into less urgent focus on attracting talent but retention is likely to remain a major concern.

WorkBuzz’s State of Employee Engagement Report 2023/24 finds that employee retention is the greatest priority for UK HR leaders for the year ahead. According to the report:

  • 36% of UK HR professionals say retention is their biggest priority for 2024
  • 89% of UK HR professionals say retention is as difficult as ever, or more so

A slackening labour market might encourage employees to stick with their current employer rather than twist – but that’s unlikely a positive if workers feel their hand has been forced. Irrespective of whether other job opportunities are available, creating a culture where employees want to stay could remain a major concern for many.

Hybrid work opportunities going strong – flexibility still important

Our Hiring Lab data also found that remote or hybrid flexibility has remained a major trend. As of the end of December, 15.8% of UK job postings on Indeed mentioned the opportunity for remote or hybrid work, largely in line with the May 2023 peak of 16.3%.

Likewise, jobseeker searches for these opportunities have remained high. Overall the share of searches containing remote or hybrid terms was 2.7% at year-end, near its all-time high of 3.0% and up tenfold from pre-pandemic levels. 

Although there’s been much debate around returning to the office, these figures show the continued importance of maintaining visibility over your people’s needs. Flexibility, whatever form flexible working takes, looks set to stay important over the coming 12-months.

Wage growth slowing but real wage growth back in the green

Spiralling inflation has been one of the UK’s biggest challenges over the past year. In 2022, the UK’s annual inflation rate was 7.92%, a 5.4% increase on 2021. There were months last year that saw inflation spiking into double-digits – reaching a 40-year high – with experts forecasting peaks at 22%. 

That caused real problems for many employers throughout last year. Struggling with the cost of living crisis, many employees’ financial well-being took a hit, and employers were under pressure to increase wages.

Indeed Hiring Labs’ recent data shows wage growth is finally slowing, with wages growing at a rate of 6.6% in the UK. That’s down from a record high of 7.8% year-on-year in the second quarter of 2023.

That spells good news for employers, as spiralling costs of doing business threaten business sustainability. It’s little coincidence that the number of UK companies going bust hit a 30-year high in 2023.

The good news for workers and jobseekers is the return of real wage growth, after almost two years of inflating outpacing wages.  Wages might not be growing as fast as they were, but inflation has fallen even further. In practical terms, this can increase consumers’ real-terms spending power – which might be a boon for wider employee satisfaction and well-being.

Growth in international jobseekers looking for work in the UK

In the UK, the share of job searches conducted by searchers outside the UK increased by 146% from April 2021 to June 2023, to 5.5% of total searches. The proportion of searches for UK jobs coming from jobseekers abroad has consistently remained higher than the EU since 2017. If this trend continues through 2024, it might suggest a relief from ongoing talent shortages, widening available talent pools and making recruitment easier.

UK job categories experiencing the highest number of clicks from foreign jobseekers:

  • Personal care and home health (attracting 9.3% of clicks)
  • Software development (7% of clicks)
  • Loading and stocking (2.9% of clicks)
  • Cleaning and sanitation (2.8% of clicks)
  • Nursing (1.7% of clicks)

This rise in searches from jobseekers abroad suggests the importance of the UK’s brand on the world stage, and could represent a positive step towards the UK being a hub for the best and brightest workers from across the world.

Pawel Adrjan, Director of EMEA Economic Research at Indeed points out how hiring international workers can create a brain-gain that’s good for business.

That said, the rise in foreign jobseekers also creates challenges. Pawel also talks about difficulties like:

  • Workplace barriers related to language and knowledge
  • Insufficient knowledge of local market
  • Ensuring continued retention to support international staff needs

Recent research details the ‘unqualified applicant overload crisis’, with 73% of employers stating their biggest hiring challenge is a high volume of unqualified applicants. Where employers are unable to hire internationally, receiving a higher volume of international applications makes hiring harder, not easier. 

In these cases, employers could explore tactics like recruitment automation and pre-screening including right-to-work questions, to help ease the burden.

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2023 was a challenging year for business and people leaders and their employees, so it’s great to see some tentative positive signs for 2024.  As always, keeping your finger on the pulse of labour market developments is critical to providing the support, strategy, and leadership your organisation needs as those needs evolve.