According to the latest forecasts by the Office for Budget Responsibility (OBR), the UK’s fiscal outlook has improved dramatically.  In his spring budget, Jeremy Hunt seemed to underline the data by announcing that the UK has managed to avoid a technical recession.

Despite this though, the UK still is undergoing a huge productivity issue. At the current time, the UK is the worst performing G7 country in terms of productivity

One of the strategies the government have outlined to improve this is to target the economically inactive.  This includes people who chose to take early retirement, parents, and people with disabilities or long-term illnesses. Policy changes are planned to encourage these groups to enter (or re-enter) the labour market.

Even without the efforts of the government, the cost-of-living crisis has forced the hands of many. Most recently, the data points to a rise in labour activity amongst the young. People aged between 16 and 24 have been joining the workforce by taking part-time jobs.

Q1 recruitment began slowly. Economic uncertainty forced businesses to proceed with caution. Many chose to slow their hiring activity, opting to upskill and restructure instead.

But organisations still need people. Using some recently released data from Totaljobs, this blog looks forwards. We’ll give you the Q1 highlights and offer some predictions about what we can expect to see from recruitment in Q2.

two casually dressed women sit talking across a table

Q1 vs Q2. The highlights.

Hiring confidence.

It’s positive to note that hiring confidence has improved over the last quarter. In Q1, employers’ hiring confidence stood at 53%. According to the Totaljobs report, in Q2 this figure has escalated slightly and is currently 57%.  Employers’ hiring optimism aligns with their growing confidence in the market.  More than a third (35%) of businesses increased their recruitment in the first quarter of 2023 compared to 30% of organisations in Q4 of 2022.

Anecdotally, most employers believe they will find the talent they need in 2023. This optimism is mirrored in the statistics.

28% of businesses intend to hire in Q2. Of those with recruitment on the horizon, 18% have their sights set on specialist permanent roles. However, it seems that the financial weight hasn’t entirely been lifted.  14% of businesses intend to remain somewhat cautious. Instead, these organisations plan to increase the hiring of temporary workers, freelancers, or contract staff.

a red for hire sign on a metal post

What will slow down hiring in Q2?

Despite employers’ renewed optimism in the jobs market, the Totaljobs evidence indicated that the hiring landscape still presents challenges.

Skills and Labour shortages.

In the Spring budget, the chancellor set out to ease the labour and skills shortage here in the UK.

Several plans were outlined that are intended to encourage participation in the labour market. These included his plans to scrap LTA (Lifetime Allowance) and to increase free childcare support. We were also told that disabled people would be able to continue claiming benefits while working to improve participation in the workforce.

37% of businesses believe that skills shortages within their industry present the largest threat to their ability to hire.  Recent political activity, such as Brexit and the UK’s exit from the EU and has served to significantly reduce the abundance of foreign workers. This has consequences for recruitment in some areas of industry.  For example, the growth in the construction industry has prompted the government to consider including builders and carpenters on the shortage occupation list.

What are businesses doing to tackle the skills shortage in Q2?

Labour and skills shortages are more abundant in some sectors than others. Throughout Q1, 58% of transportation and distribution and 51% of Construction organisations found hiring to be a challenge.

Business restructuring.

To address this, businesses will be forced to look inwards in Q2.  In Q1, 22% of businesses restructured a department, team, or wider business to fill the gaps left by vacant roles.

Policy changes.

When asked what they were planning to do in Q2 to address the shortfall, 35% said they will upskill current staff, 29% will offer a higher salary and bonus schemes, and 25% will offer flexible working.

Even with the UK government’s plans, only 12% of businesses are focusing on attracting older or retired workers back into work. Instead, a greater number (18%) are considering offering more entry-level positions and apprenticeship schemes.


AI is changing the world of work. Its impact has the potential to automate and streamline many tasks that previously needed a human touch. 16% of businesses reported to be investing in technology and automation to supplement the shortfalls in their workforce and the skills within it.

Remote workers.

Another way in which technology is transforming work is its ability to enable remote and overseas work. Geographical proximity is no longer a barrier to accessing the talent pool.  12% of businesses have been able to widen their search thanks to remote working options, while 11% are looking overseas to find the talent they need. This number jumps dramatically in some sectors; 25% in social care and 19% in medical & health services.

What can businesses do to help their hiring successes in Q2?

Optimise Job ads.

The current economic climate seems to be causing one of two responses in candidates. They appear to either be actively leaving roles to pursue a higher salary or are staying put in the security of a long-held job.

The research states that those who are actively job seeking are looking more closely at job ads than ever before. In particular, candidates are focussing on salaries and benefits (68%), company reviews, and business performance (52%). 62% of people say they are more likely to ignore a job posting if it does not disclose a salary.

Therefore, not disclosing a salary is a barrier to hiring. The Totaljobs research suggests that only 34% of businesses advertise specific salary and bonus information, while just 35% include detailed company benefits in their job adverts.

To attract more candidates, employers should be transparent about their salary and benefits packages, along with their flexible working arrangements.

Pay as well as you can.

Now is not a time to be conservative with salary. Salaries still appear to be the top priority for candidates. One third of resignations were due to staff seeking a higher salary in Q1 2023.  On top of this, 57% of employed people are actively seeking a job with a more generous salary.

Starting salaries are peaking as organisations try to outbid each other in the war for talent. Organisations should benchmark their salary to avoid losing their teams to competitors – especially when geography is no longer a barrier to employment.

Eager to know more?

Are you interested in the recruitment activity in the UK? You will love our monthly reports on The Recruitment Landscape. You can find these blog posts in the Industry News section of our blog.

Are you looking to address your hiring needs in Q2? Ignite Digital Search can help you find the tech, digital and data talent you need to push your business forward in 2023.

Our recruitment team are experts in their field. We can advise about the jobs market, the tech sector and the skills you’ll need in your next hire. Our network includes the best digital talent in the UK. We know where to find them and what they expect from their work and employer.

Reach out to learn more about how we work and to find out how we can help you.

About the author: I manage the recruitment for a range of digital roles for my clients on both a retained and contingency basis. I specialise in senior and confidential appointments, always giving a first class representation of a client’s employer brand.

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