In a recent press release by EY, the UK economy is expected to be in recession until summer 2023. What does this mean for employment and IT jobs in 2023? Or jobs in all sectors, for that matter?
The expectation of a recession in the UK until the middle of 2023 stems from a combination of multiple factors:
This, according to the latest EY ITEM Club Autumn Forecast in October 2022.
Unsurprisingly, consumer spending is set to fall in 2023. In my opinion, it has already. In no small part due to the increase in cost of living coupled with any surplus funds saved during Covid, now depleted. And, in line with most recessions experienced, house prices are also expected to fall.
No economy likes uncertainty. The reality is that the pace at which business investment will grow could be held back by weak UK and global economic growth, rising costs of capital goods and global interest rate rises. As a result, investment decisions will be more difficult, with considerations such as these rising interest rates and international uncertainty. And this could account for a slower return to a more stable economy.
For the first time in years, the forecast for inflation v average earnings sees inflation spiking and average earnings marginally decreasing, increasing the gap. Does this mean that employees will be more wary about moving jobs?
It’s hard to say now how this will affect the IT jobs market and employment overall. Unemployment is set to rise, but modestly, according to the same report. In fact, despite a recession, the unemployment rate is forecast to peak at around 5%, which would be significantly lower than in previous downturns.
My advice to employers is to make retention of your tech talent a priority.
If we’ve learned anything from the last two years, it is that employees are more fearless about moving jobs in an unpredictable market. Tech talent specifically has experienced such a spike in demand over the last two years that surely, they feel an element of ‘untouchable’, even in a looming recession. And that means heads can be turned.
Recently, my business partner, Chris, wrote a great blog on the employee perks turning off tech talent. It’s worth a read as a key factor in staff retention and engagement is what’s on offer to your tech talent. The other is communication.
Hywel Ball, EY Chair says: “Businesses will need to think very carefully about their resilience and plan for different scenarios, while also being mindful of the support they provide to their customers and employees.”
And I couldn’t agree more.
Retaining your top tech talent, in this highly competitive market, is not easy. It takes proactive employee engagement plan. If you’re already worried about your leavers, read our latest advice, on a different perspective, to combat a rise in attrition.
We believe that people and technology change the world and despite a recession, we will continue to live by our purpose of empowering people in technology to inspire innovation and create positive change.
Therefore, if you want to work on your hiring and retention this side of Christmas, our recruitment experts would love to hear from you.