What Does The Spring 2023 Budget Mean For The Recruitment Industry?
On Wednesday 15th March 2023, Chancellor Jeremy Hunt unveiled the contents of his first Budget in the House of Commons. The spring budget for 2023 explains how UK economic growth has been weak and high inflation has hit confidence and squeezed budgets, constraining the ability of households and businesses to spend. However, there are signs that the UK economy is proving to be more resilient than first anticipated.
In the budget, Chancellor Jeremy Hunt is set to focus on the UK’s productivity issues including lower business investment and higher economic inactivity.
Speaking in the Houses of Parliament, Hunt outlined his four pillars for growth;
- Enterprise – supporting business
- Employment – encouraging more people to work
- Education – providing people with skills
- Everywhere – growth across the UK
Hunt said: “Today, we deliver the next part of our plan: a Budget for growth. Not just the growth that comes when you emerge from a downturn, but long-term, sustainable, healthy growth that pays for our NHS and schools, finds jobs for young people and provides a safety net for older people, all while making our country one of the most prosperous in the world—prosperity with a purpose.”
The Chancellor continues to say “We have around one million vacancies in the economy, but excluding students there are over seven million adults of working age who are not in work; that’s a potential pool of seven people for every vacancy.”
Let’s see what this spring 2023 budget means for the recruitment industry…
Hunt has proclaimed a “revolution in childcare… today’s childcare reforms will increase the availability of childcare, reduce costs and increase the number of parents able to use it”.
The government has planned to help parents with childcare so they can return to work more easily via a range of new measures. Some of the new measures will offer working parents in England the ability to access 30 hours of free childcare per week, for 38 weeks of the year, from when their child is 9 months old to when they start school.
The government will also provide £204m of additional funding this year, increasing to £288m by 2024-25. This funding is additional to the £4.1 billion that the government will provide by 2027-28 to facilitate the expansion of the new free hours.
The new measures announced by the government to provide 30 hours of free childcare per week for working parents in England can potentially have a hugely positive impact on the recruitment industry. With parents having access to more affordable and reliable childcare, they are more likely to be able to return to work easily and sooner after having a child. This could potentially increase the size of the available workforce and attract more job seekers to the job market, which in turn could increase the demand for recruitment services.
Furthermore, as more parents are able to return to work, businesses may also see an increase in productivity, growth, diversity and inclusivity, which could lead to an increased need for recruitment tools and solutions to help them find and hire new employees. This could create new opportunities for recruitment agencies to specialise in finding talent for businesses that are expanding due to the new childcare measures.
Disability Employment Gap
The government has announced they are going to do more to close the disability employment gap, the difference between the employment rates of disabled and non-disabled people, which at 29.8 percentage points in 2022 is now at its widest point since 2018.
Chancellor Jeremy Hunt has announced a measure to “reform the welfare system” in Great Britain to better meet the needs of disabled people. This includes getting rid of the Work Capability Assessment, which would help claimants return to work without the worry of losing their financial support.
Hunt also stated he will be piloting new WorkWell Partnerships in England, which will deliver integrated work and health support in local areas, linking JobCentres, health services and other local organisations to provide wraparound health support for jobseekers, benefits claimants and those at risk of falling out of work because of their health condition.
These plans could create greater positivity and hope in the recruitment industry. By removing the Work Capability Assessment (which has been criticised in the past for being discriminatory and ineffective) and introducing WorkWell Partnerships the government will be able to provide a holistic approach to supporting people back into work. Leading to a larger pool of job seekers who are able to work, and in turn, a larger pool of candidates for recruitment agencies to draw from.
Additionally, the removal of the Work Capability Assessment and the provision of more support for disabled people to return to work could help to reduce the stigma surrounding disability and employment. This could encourage more employers to consider disabled candidates for job vacancies, leading to a more diverse and inclusive workforce.
Education and Skills
In an effort to support workers past and present of all ages, the government has also outlined new education and skill plans. These measures aim to help young people and adults in England, regardless of their age, to access the training they need to reach their full potential in the labour market.
Jeremy Hunt has introduced a new strategy called “Returnerships” which is designed to help people over the age of 50. This program combines existing skills programs and focuses on “flexibility” and previous experience to “reduce the length of training” required. It will promote accelerated apprenticeships, Sector-Based Work Academy Programme placements and Skills Bootcamps for this age group.
On top of this, he also proclaims to boost funding for Skills Bootcamps, providing an additional £34.4m for an additional 8,000 Skills Bootcamps placements in 24-25. This will provide opportunities for people to reskill in high-value sectors such as construction and digital.
The new education and skill plans, including the “Returnerships” strategy introduced by Jeremy Hunt, will have a significant impact on the recruitment industry. By providing training opportunities and reskilling programs for workers of all ages, including those over 50, there will be a larger pool of skilled workers available for recruitment.
The focus on flexibility and previous experience to reduce the length of training required for the “Returnerships” program will also help to fill skills gaps more quickly, making it easier for employers to find the right talent. The promotion of accelerated apprenticeships, Sector-Based Work Academy Programme placements and Skills Bootcamps for workers over 50 will also help to increase the number of qualified candidates in the labour market.
The additional funding for Skills Bootcamps, specifically targeting high-value sectors such as construction and digital, will also have a positive impact as it will provide opportunities for individuals to reskill and upskill. This will allow them to transition into new industries or take on higher-skilled roles, which can help address skills shortages in these sectors.
In conclusion, the UK’s Spring 2023 Budget has been presented with a strong focus on rebuilding the economy post-pandemic. The budget has included measures to support businesses, individuals and families, with a particular emphasis on creating jobs and boosting skills development.
The budget has introduced a range of initiatives to help businesses to grow and individuals have greater financial support. The focus on boosting skills development has been a significant aspect of this budget, with the introduction of the “Returnerships” program and additional funding for Skills Bootcamps. These measures will help to upskill and reskill the workforce, creating a larger pool of qualified candidates for employers to choose from.
Overall, the UK’s Spring 2023 Budget has provided a strong foundation for the country’s economic recovery, while there may be some challenges ahead, this budget sets the UK on a positive path toward a more prosperous future.
For more information about the UK’s Spring 2023 budget – labour market measure (click here).
However, for a full breakdown of the Spring 2023 budget (click here).
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