Magnit™ has published its Autumn/Winter 2024 UK Labour Market Report, revealing a changing job landscape shaped by economic challenges, growing adoption of AI, and a trend towards onshoring.
The report highlights the complex dynamics in the UK labour market as organisations contend with slow GDP growth and navigate high competition for skilled roles, such as accountants, IT project managers, and cybersecurity engineers.
Dustin Burgess, Senior Vice President of Strategic Advisory at Magnit, comments on the findings: “The UK’s labour economy faces a multifaceted landscape, with sluggish GDP growth contrasting against areas of intense hiring competition. Organisations must navigate this complexity by rethinking their value proposition to land top talent while also redeploying and upskilling existing workforces wherever possible.”
Magnit’s report analyses data across multiple economic and workforce metrics, offering insights into trends that affect hiring and retention strategies for employers in a challenging yet resilient labour environment.
Slow Economic Growth Challenges UK Labour Market
Despite an ongoing need for specialised talent, the UK is experiencing slow economic growth, with a GDP increase projected to remain under 1% for the year. Magnit attributes this slowdown to several factors, including the lasting effects of Brexit and an urgent need for capital and productivity improvements. This sluggish growth highlights the need for organisations to adopt new strategies to attract and retain skilled employees amidst evolving economic conditions.
The rapid adoption of AI technology is one of the most significant factors reshaping the UK labour market. Magnit’s report estimates that AI advancements will create an additional 610,000 jobs by 2028, with the IT and telecommunications sector projected to see the largest job growth, adding 320,000 roles to support AI infrastructure and development. The UK, with twice as many AI-based companies as any other European country, is set to lead this technological transformation, creating demand for professionals skilled in AI-related fields.
This demand, however, intensifies competition for roles such as IT project managers and cybersecurity engineers. Nearly half of professionals in these areas are approached by recruiters on a quarterly basis, underscoring the need for firms to offer compelling value propositions to secure top talent.
Skills in High Demand: Focus on Technology and Strategic Expertise
In response to skills shortages, certain high-demand skill sets are seeing notable salary increases. The report highlights several areas with year-over-year salary growth, including Content Strategy and Business Intelligence, each seeing an 8% increase, as well as skills in SharePoint Online and Snowflake, which have risen by 4% each. The trend reflects a heightened competition for specialised expertise as organisations strive to fill essential roles in tech-driven sectors and data management.
A rising focus on onshoring is driving changes in the construction and manufacturing sectors. As the UK seeks greater autonomy in its operations, organisations are investing in domestic skills and resources. Magnit reports a 6.8% to 13.9% increase in Western Europe’s filled contingent engagements within manufacturing, with the UK leading this shift and accounting for two-thirds of the onshoring volume. This investment trend is expected to encourage greater stability within critical industries and reduce reliance on overseas talent and resources.
Anticipating New Employment Laws Amid Labour Party Shifts
Magnit’s report also notes the potential impact of regulatory changes under the newly elected Labour Party government. New employment laws are expected to influence hiring practices, impacting the skill requirements for businesses and compliance standards across industries. These regulatory shifts could necessitate new approaches to workforce management, as companies aim to align with evolving requirements and mitigate the effects of economic pressures.
The UK’s labour market is positioned at a crucial intersection of economic stability and emerging technological opportunities. According to Burgess, navigating these challenges requires organisations to leverage data-driven strategies for workforce planning, helping them stay competitive and attract talent amid rapidly evolving market conditions. Magnit’s report underscores the importance of proactive adjustments, whether through value proposition enhancements, workforce redeployment, or upskilling initiatives.
“The last several years delivered a barrage of challenges for organisations, but the UK emerges with a reinforced mandate for change. With the right data-backed strategies, companies across the region can attract highly skilled talent and remain competitive amid evolving economic indicators,” concludes Burgess.
