How The Rise In Cost Of Living Is Affecting The Recruitment Sector
The rise in the cost of living is taking its toll on everyone in the UK, with workers struggling to pay household bills and employers feeling the squeeze on office rent and manufacturing costs.
We’ll be looking at how the rise in the cost of living is affecting job seekers and employers, but first, let’s learn more about the cost of living.
The cost of living in the UK is at a 30-year high and this is mainly because the price of energy, fuel, and food has gone up due to rising inflation rates. The inflation rate is currently at 5.5% but this is expected to increase over the next few months, peaking at 7.25%.
Despite these soaring inflation rates, most workers only received a pay rise of 1-5%, while some salaries stayed the same or declined. The high inflation rate alongside increased National Insurance contributions has increased the cost of living further since April, leading people to make financial sacrifices and make crucial changes to their lifestyles – such as considering changing jobs and even sectors.
How Is The Cost Of Living Affecting Job Seekers
Some may say workers and job seekers have been affected the most since the cost of living crisis began. In a recent survey, it was found that over 77% of job seekers are worried about the cost of living affecting their lives in the future with almost half of workers fearing the decrease in an already limited disposable income.
Work-related costs have risen for almost all job seekers, with work-from-home energy costs and technology, childcare, and commuting expenses all increasing. This is causing job seekers to be increasingly worried about spending on essentials like food, travel to and from potential employers, and high bills when working from home.
30% of job seekers say employers’ salary expectations do not currently cover current living costs, reports also suggest that cost of living rises will hit low-income families the hardest, with candidates from low socioeconomic backgrounds being affected the most.
The impact on recruitment
According to candidates, several factors are becoming more relevant when considering a new role. For a quarter of candidates, salary is the most important factor when looking for a new job role to cover higher costs, as well as benefits and perks that allow them to maintain lifestyle choices.
Research has found that employees do not think their pay is keeping up with the rising cost of living. Nearly half (48%) say they have not had a pay rise in the past year, and the 42% of those who did only reported a rise of 5% or less – less than the current rate of inflation (5.5%). Moreover, a substantial proportion (30%) of employees say that their salary does not cover basic living costs. In fact, 17% of workers have resorted to taking a second job to boost their income – rising to one fifth of essential workers.
The rising cost of living is driving more than a third of people to consider changing jobs this year (this level rises to 47% amongst social care workers). In social care alone, this could mean an exodus of more than 700,000 care workers in the next year.
It’s clear that the cost of living is having an impact on businesses and their staff, so it’s important employers begin to have open conversations with their staff about financial wellbeing.
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