91探花

The Bank of England has decided to keep the base rate at 3.75% this week in a 7 to 2 vote, which was expected. Inflation is above the Bank鈥檚 2% target and is expected to reach at least 4% later this year, according to analysis from Plum founder and CEO Victor Trokoudes. Economic growth contracted 0.1% in April, and much of the discussion following the decision centred on unemployment, vacancies and hiring activity.

At this point in time, there aren鈥檛 as many job openings there should be, unemployment has come up and youth unemployment has reached its highest it鈥檚 been in a decade. Labour market conditions are a major topic this time around as employers are reviewing recruitment budgets, workforce requirements and hiring plans, especially within tech.

听

What Is Happening To Employment?

听

Victor Trokoudes said economic weakness and labour market deterioration formed an important consideration in the current environment.

He said, 鈥淎nother factor is the weakness of the UK economy, which contracted 0.1% in April. The labour market continues to show signs of deterioration, with unemployment up to 5% now and youth joblessness at a decade-high. The number of job openings also fell to 705,000 in the three months to April, the lowest since 2021.鈥�

Much of the reactions we received towards the decision focused on the unemployment, vacancies and youth joblessness side of things, and not just the rate hold itself.

The vacancy total of 705,000 is the lowest level recorded since 2021. Fewer advertised jobs mean fewer openings for people entering employment, changing careers or returning to work after time away.

Youth unemployment is always brought up when we speak of the labour market, because younger workers often depend on entry level vacancies to gain experience and establish careers. Those opportunities are less plentiful as recruitment activity slows.

听

Why Are Employers Recruiting Less?

听

ONS labour market data released this week showed employment holding at 75% and unemployment at 4.9% while earnings continue to grow faster than inflation.

Jeanette Wheeler, Chief People Officer at MHR, said, 鈥淭he latest figures suggest a labour market that is holding steady on the surface, but still showing signs of strain underneath. The employment rate remains unchanged at 75%, unemployment has edged down to 4.9%, and earnings continue to grow slightly faster than inflation. That will be welcome news for many people who have faced a prolonged squeeze on their finances.鈥�

Wheeler said vacancy levels show fewer hiring opportunities than employment data alone, saying, 鈥淏ut the continued decline in vacancies tells a different story. Vacancies are now at their lowest level since early 2021.

鈥淓mployers are being cautious about taking on new hires as they navigate high labour costs, economic uncertainty and ongoing global pressures. While that caution is understandable, it is creating fewer opportunities for people looking to enter the workforce or make a career move. Some sectors are feeling this more than others, with industries such as retail and food service continuing to face significant cost pressures.鈥�

听

How Is AI Affecting Tech Recruitment?

听

Tech employers are reviewing recruitment needs as AI becomes more common in workplaces. Wheeler said, 鈥淎t the same time, many organisations are rethinking workforce requirements as new technologies, particularly AI, reshape how work is carried out.

鈥淩ather than simply filling roles as they have in the past, employers are increasingly considering what skills they will need in the future and how technology may change job design. This is contributing to a more measured approach to recruitment, while businesses assess where best to invest in talent and capability.鈥�

Graduate and entry level positions have become an important area of discussion within technology recruitment. Many employers are examining which junior roles they need, how training budgets should be allocated and where AI tools can perform tasks that were once completed by new recruits.

Nick Isherwood, Chief Operating Officer at Advania, believes youth employment requires greater support from both government and employers.

He said, 鈥淯K government and businesses must act now to stop the UK from being trapped at 1m NEETs by 2030. We鈥檙e proud of the work we do at Advania to support school leavers and graduates, but we鈥檇 like to see our sector peers, partners and customers doing the same.

鈥淢any of our peers also claim to be tech companies with people at their heart 鈥� if you鈥檙e not investing in the people who will one day be your leaders, it鈥檚 a false claim. Young people bring fresh ideas and approaches that move businesses forward, especially in the use of AI. If you are not investing in young people today, you鈥檙e not investing in your business long-term.鈥�

听

What Is Happening To Entry Level Hiring?

听

Isherwood said rising wage costs have really changed recruitment economics for employers considering junior talent, saying, 鈥淎dvania is fully behind hiring entry level talent and has invested in several early careers programmes to support this. However, in today鈥檚 economic climate, it is becoming increasingly difficult to build a business case for entry level hiring, when wage minimums are rising at such a rate and the gap between experienced and inexperienced hires is narrowing.鈥�

Employers often weigh the cost of recruiting experienced workers against the cost of recruiting and training junior employees. Higher wage bills have made those calculations more demanding.

Isherwood said, 鈥淏usinesses are forced to derisk hiring decisions by paying more for experienced staff while still carrying training costs for junior hires, making the trade-off increasingly hard to justify. Businesses need more government support to make entry level recruitment viable again. Increasing wages at this rate is a key driver of unemployment, as employers struggle to absorb higher wage bills alongside the investment needed to make entry level hires productive. AI is also compounding this by reducing traditional lower-level entry roles.鈥�

He also said, 鈥淓mployers want to support youth employment, but without interventionv 鈥� whether through wage support or incentives 鈥� the model is becoming financially unsustainable.鈥�