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Inflation and Recruitment

What a year 2021 has turned out to be with a recovery that I think most could only have dreamed of. In addition, a change in work dynamics that can only be described as the most rapid I have seen in my lifetime. My question is how sustainable is the current growth and recovery, some would argue it is already slowing?

I am certainly not able to comment on the whole of the UK or across all sectors, but I can say for the region and specialisms we cover the demand for good hires is still at a record high and is showing no signs of slowing currently. At Chase & Holland our revenue is 42% up on last year and is like for like a record revenue year for us. Stating the obvious, I know we are not alone in these results several of our clients are seeing the same demand.

So back to my question about sustainability of the growth we are seeing, and I think the answer is more complex than just a simple, will continue or not? The reason I say this is normally when inflation is increasing at the rate it is, due to demand causing an increase in costs the economy overheats and governments/banks step in and put the brakes on. Inflation is now above the magic 3% and yes, we are told that interest rates are going to rise, and that inflation will be brought back in line for 2023.

However, I have a rather optimistic view on what is currently happening in the background of all this companies are investing in changes in the workplace not seen for a generation. Companies are changing the status quo and offering better working conditions than ever before, as well as more inclusive environments. Companies are using tech to deliver services faster and more efficient than before and in addition companies are starting to care about the impact they are having on the planet. Things need to cost more hence inflation will be higher not just because of increased demand.

All this investment along with the increase in labour costs is adding to the uplift in inflation but is necessary for us to transition the way we do things at the speed that is required. So, at the risk of being wrong I think that both the demand in recruitment and therefore the difficulty in attracting top talent is here for at least the next 12 months as is the current inflation rate. We all just need to be mindful and use this disruptive time to be more responsible and sustainable employers.