The landscape of job recruitment has shifted, with companies no longer offering substantial pay increases as incentives for job changes, according to Hays, one of Britain’s largest recruiters.
While significant pay raises of 20% to lure talent were once commonplace, the current environment sees more modest increases of around 5% for job changers.
James Hilton, Hays’s finance director, noted that during the “great resignation” period, employers were eager to attract talent and willing to pay higher salaries. However, the situation has normalized, leading to more typical pay increases for job changes.
This shift in recruitment dynamics has contributed to a slowdown in hiring activity, reflected in Hays’s financial performance. The company reported an 11% decline in net fee income between July and December compared to the same period in the previous year. Pre-tax profits also plummeted by 71% to £28 million.
Factors contributing to the hiring slowdown include global economic uncertainty and workers’ decreased willingness to change jobs without significant salary increases. Dirk Hahn, Hays’s chief executive, highlighted that many workers are content with their current jobs amid job cuts in certain industries.
Hays has responded to the changing market conditions by implementing cost-cutting measures, including reducing its workforce by approximately 1,200 roles over the past year, aiming to save £50 million annually.
Despite the overall slowdown, Hays remains focused on specialized roles, particularly in technology, and sees more stability in the temporary job market compared to permanent roles.
While trading in the new year has shown some stability, it remains uncertain whether increased interview activity will translate into placements. Analysts suggest that current trading conditions are slightly better than anticipated.
In response to these market dynamics, Hays is adjusting its strategy by prioritizing senior and skilled roles, where movement is still observed.