The Recruitment Reset

In an effort to raise £40bn, the 2024 Autumn Budget increased costs for employers through higher National Insurance Contributions, wage increases, and reduced thresholds.  This has prompted many employers to adjust hiring, pricing, and operational strategies to manage financial pressures. As we move towards April 2025, the impact of these increased costs is already starting to bite and signal a reset in recruitment and operational strategies. 

Larger companies, particularly in retail, were the first to speak out. Greggs and Marks & Spencer increased product prices to offset higher National Insurance Contributions (NICs) and wage expenses but a recent Bank of England survey, reported by the Times, suggested that over half of UK businesses plan to raise prices and reduce employment to counteract increased tax burdens.  

A recent employer survey from consultancy KPMG and recruitment firm REC suggests that vacancies for permanent roles have declined at the fastest pace since August 2020, when the UK was in the grip of the pandemic.  

Add to this the adoption of AI. Keir Starmer’s AI Opportunities Action Plan may be welcome but many organisations remain hesitant due to lack of understanding, training and regulation. However, there is enough confidence in tech giants Google and Microsoft for their AI tools to positively impact a business and ‘bot buddies’ are making a significant but fairly low-key addition to many SMEs. Indeed, Bay Tree is keeping ahead of the curve with Microsoft’s Copilot starting to play a key role in operations, record keeping and information sharing. 

The combination of increased costs and a wider adoption of AI will undoubtedly lead to a recruitment reset in 2025. Recruiters and HR professionals will need to rethink their resourcing strategy and be open and ready to adapt. 

Katrina Walker, Regional Director of People Puzzles comments: “This is a real concern for clients – so much so, we recently ran a recent webinar entitled: ‘The War on Cost’, where we provided a CEO’s guide to tackling the rising costs of employment. The content covered practical ways for a business to save money, like implementing salary sacrifice and reviewing and benchmarking benefits, through to longer term strategic thinking around succession planning and organisational structure.  

Throughout the session, the themes of how to keep the best people and build a winning team came through strongly. Businesses can save money, improve efficiency and set themselves up for long-term success by making strategic changes.  Yes, financial pressures are there, but there are many ways to reduce the risks.” 

Internal Development

One such strategy is for employers to balance financial pressures and recruitment needs through internal development – that is to look at the skills they have and to unlock more of them, freeing up good people to concentrate on what they do best. 

There are various ways of doing this depending on the structure of a team and size of a business but in broad terms:- 

1. Support for senior managers – not so long ago the concept of self-sufficiency was deemed cost saving. Managers managing their own time and admin led to less PAs and support staff. Today, we consider the flip side of that theory. How much time is lost for strategic work, creativity and innovation because your management team is fending for themselves? At Bay Tree, we have already started to witness the reset in this regard.  

2. Internal promotion – Back filling task-based and more general roles after internal promotion is good for business in many ways. It can lead to: 

• Faster integration and productivity – Employees promoted internally are already familiar with the company culture, processes, and systems. This reduces the learning curve and allows them to contribute effectively in their new role much faster than an external hire. 
• Cost-efficiency – External recruitment can be expensive due to advertising, recruitment agency fees, onboarding, and training costs. Promoting internally reduces these expenses and retains the investment the company has already made in training and developing the employee. 
• A boost in morale and retention – Internal promotions demonstrate that the company values and rewards loyalty and performance. This motivates employees to excel and fosters a culture of growth, leading to improved morale and reduced turnover. It also shows others that career advancement is achievable within the company. 

3. AI – there’s no denying that automation will, in time, save time. One of the many challenges is introducing AI to the business without too much disruption and risk. Giving someone the responsibility to research, identify and trial the most appropriate tools or oversee the implementation of new automated processes, rather than AI creeping in through the back door will make for long term integrated success. 

Internal development is one strategy for employers, another is flexible hiring, using part time, outsourced workers to help control costs. 

These combined benefits may well make the difference to enable a company to continue with plans for growth, despite the impending cost barriers that potentially seek to derail the most robust growth plan. 

A recent survey conducted by LinkedIn suggests that the skills needed for jobs are expected to change by 70% by 2030. If this is the case, the skills requirement and associated scope for defining a job role will be much harder to predict. Bay Tree VA has been providing the flexible and agile resourcing solution for over 15 years, giving options to teams either short or long term.  

Jane Cattermole, Founder & Director at Bay Tree VA concludes:

“We are well placed with our operations and business support experience to help businesses bridge this transitional period in recruitment and resourcing, working with teams and business owners to accelerate growth and productivity. We want to help our clients go beyond the limits that these employment increases have created and help them become leaner and agile, embracing new technology and adapting to change.” 

If your business has been adversely affected by increased costs in relation to employment or gaps after internal restructuring, consider outsourcing and Bay Tree VA as a possible solution. Contact us or book a call with Brigette and Katie.

“We are well placed with our operations and business support experience to help businesses bridge this transitional period in recruitment and resourcing…

Jane Cattermole

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