Reskilling trumps wellbeing as top HR challenge for 2025, study shows<\/a><\/p>\n\u201cThe UK economy has stalled and with it so has hiring,\u201d said Petra Tagg, workforce solutions director at ManpowerGroup. \u201cThe labour market has been moving at an almost glacial pace for months and, while there remains some movement in roles for the highly skilled, we\u2019re very far off the 30 per cent hiring outlooks we saw in early 2022.\u201d<\/p>\n
Pressures from costs, policy and AI disruption<\/p>\n
This slowdown comes against the backdrop of rising operational costs, increases to employer national insurance contributions and broader economic uncertainty ahead of the autumn budget.\u00a0<\/p>\n
\u201cEmployers are weighing recruitment investment against the need to drive efficiency through AI and automation,\u201d explained Tagg. \u201cWhat\u2019s needed now is a corrective course of action: relief on employment costs, clarity on policy timelines and bold investment in long-term infrastructure and pragmatic innovation.\u201d<\/p>\n
James Cockett, labour market economist at the CIPD, added: \u201cThe cost of doing business has increased notably over the past few years, and policy decisions made by the government in its first year in office have done little to mitigate this, leading to weaker hiring intentions.\u201d<\/p>\n
Services companies face sharpest decline<\/p>\n
While the slowdown is widespread, the impact is uneven across business sectors, according to the report. Hiring demand remains strongest in the technology sector, followed by finance and property, while consumer goods and services are on course for the sharpest year-on-year decline. Energy and utilities, meanwhile, posted the strongest quarterly growth.<\/p>\n<\/p>\n
Cockett highlighted that the hardest-hit industries were those already facing rising employment costs. \u201cThe changes to employer national insurance have disproportionately impacted lower-paying industries and employers hiring staff working fewer hours, because of the concurrent rise in the national minimum wage and national living wage,\u201d he explained. This means businesses in the hospitality, retail and social care sector were facing the greatest hiring challenges.<\/p>\n
Gemma Dale, lecturer in the business school at Liverpool John Moores University, said a \u201ccocktail of factors\u201d were contributing to weaker hiring intentions, including global instability, cost pressures and declining consumer demand.\u00a0<\/p>\n
\u201cIT, finance and logistics are holding up well, while sectors such as communications, consumer services and healthcare look more exposed, perhaps reflecting margin pressures and shifting demand,\u201d she added.<\/p>\n
How employers are adapting to uncertainty<\/p>\n
In response, employers are adjusting their workforce strategies, often slowing or pausing recruitment or seeking more flexible hiring arrangements.\u00a0<\/p>\n
Cockett noted that many firms were hiring only for business-critical roles or replacing leavers, leading to fewer opportunities for jobseekers.<\/p>\n
To avoid the rising costs of permanent employment, some businesses were turning to contractors and agency staff, he added. \u201cWhile this is unlikely to have had a material impact on the UK labour market as yet, the government needs to ensure the measures introduced as part of the employment rights bill don\u2019t make the use of contractors the default option,\u201d he said.<\/p>\n
Rising employment costs have also meant companies were relying more heavily on internal talent to fill skills gaps, Dale added: \u201cEmployers are treading carefully, with increased use of temporary contracts, internal mobility and upskilling \u2013 not just as cost measures, but to protect agility.\u201d\u00a0<\/p>\n
What HR leaders should prioritise this quarter<\/p>\n
With many companies pausing or reducing their recruitment plans, employees could face an increase in their current workload. \u201cHR leaders should ensure that workloads are monitored regularly, particularly if roles and responsibilities have changed, and ensure staff have the resources and support they need to stay productive, engaged and well,\u201d Cockett suggested.<\/p>\n
People managers should also receive additional support, according to Dale. \u201cHR leaders should focus this quarter on three things: agreeing with the business which goals and KPIs really matter right now, making sure people managers are properly supported to lead their teams and reviewing workforce and pay plans with a flexible but realistic mindset,\u201d she said.<\/p>\n
Culture will also be a key differentiator, Dale added: \u201cA slowdown doesn\u2019t put culture on hold \u2013 it just tests it. The organisations that come through well will be those who lead with clarity, consistency and a commitment to long-term values \u2013 not just short-term costs.\u201d<\/p>\n
To learn more, explore the CIPD\u2019s knowledge hub on lifelong learning and recruitment<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Hiring demand among UK employers has fallen to a new low, with the country expected to see one…\n","protected":false},"author":2,"featured_media":137226,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[45,49,48,124],"class_list":{"0":"post-137225","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-jobs","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-jobs"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/137225","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=137225"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/137225\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/137226"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=137225"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=137225"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=137225"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}