Economic Growth in the UK and Why Businesses Should Recruit
What is economic growth in simple terms?
Economic growth refers to an increase in the production of goods and services within an economy over a period of time, typically measured by the annual percentage change in gross domestic product (GDP). When an economy experiences sustained growth for multiple quarters or years, it signals that more economic value is being created overall including corporate revenues, consumer incomes, private investment returns and government tax revenues. This leads to improved standards of living as household disposable income rises amid more jobs and higher wages. Increased economic activity also spurs business expansion across sectors and therefore, even more job opportunities opening up.
What does economic growth do to recruitment and employment?
There is a direct correlation between economic growth and job creation. As GDP consistently rises in a growing economy over key periods, companies and organisations earn higher revenues and profits because customer demand is buoyant according to the Office for National Statistics [1]. This allows them to ramp up operations, capabilities, output, and service levels to meet increasing market demand. But expanding business activity necessitates bringing on more employees through recruitment to fulfil rising production and operational requirements. This is why stretches of strong economic growth consistently drive down unemployment rates as more jobs become available and companies aggressively compete for talent in tightened labour market conditions. The UK saw this play out in 2022 for example, as roughly 600,000 new positions opened up amid the strong GDP rebound following pandemic slowdowns [2].
What is fuelling the UK’s steady economic growth?
The UK has managed to sustain healthy GDP growth rates between 2-3% over 2021-2023 thanks to a balanced foundation not over-reliant on any one sector. Contributing drivers spurring output expansions include increased consumer spending across retail, hospitality and leisure sectors as lockdown savings were unleashed. Tourism returning to full strength after COVID-19 also boosted growth [3]. Higher public infrastructure investments have played a role as large projects broke ground. Robust trade export levels in financial services, tech and the creative industry have buoyed growth as well according to data from the Office for Budget Responsibility. Supply chain stabilization post-Brexit transition and energy security efforts have also fuelled output expansions. Additionally, tight labour supply and unemployment lingering below 4% have driven real wage growth and therefore consumer spending power. Improved productivity enabled by digitization and automation across private sectors and supportive fiscal policies have also provided lift without overheating markets. This diversity of economic momentum has underpinned steady UK expansions.
Why robust recruitment is essential to sustain economic growth
With economic fundamentals still healthy according to forecasts, UK policy experts emphasise sustained growth through 2024 relies on businesses actively recruiting to expand productive capacity, increase efficiency and capture new opportunities. Economists highlight that periods of economic gains present unique opportunities for businesses looking to bolster teams with world-class talent that might be more difficult to attract and absorb during tighter markets. The current climate makes bringing on specialty skills, rising stars and critical technologists essential to drive above-average growth, innovation and establishing competitive distance in a stable growth phase.
What strategic recruitment approaches should businesses prioritise?
Both government and industry guidance indicate recruitment strategy at this point should emphasise highly selective and high-value hires that inject specialised digital skills, customer service excellence mindsets, sustainability experience and strategic leadership acumens rather than focusing solely on opening volumes. Firms should ensure recruiting plans enrich workforce diversity, reflect rising remote/hybrid work trends and blending external recruitment with internal talent mobility. Additionally, investing in existing team retraining, upskilling and engagement boosts retention and internal mobility to complement external hiring.
Why using a specialist recruiter is effective for your business during the UK’s current economic growth
While many larger corporations have extensive in-house talent acquisition teams, small and mid-sized businesses often lack specialized recruitment infrastructure and expertise. Handling recruiting themselves also distracts from core business operations. This is where leveraging specialist recruitment agencies and workforce solutions partners pays dividends These outside experts streamline screening processes, expanding candidate pipelines beyond internal networks. They evaluate applicants on precise skill, cultural and development criteria set by employers. They also accelerate hiring velocity and provide expanded analytics on talent trends versus DIY recruiting. Given the UK economy looks poised for sustained expansions, working with dedicated agency talent partners allows ambitious companies to build teams ready to capture growth..
Economic Growth in the UK and Why Businesses Should Recruit
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Sources
[1] Office for National Statistics. (2023). GDP Monthly Estimate, November 2023 https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/november2023
[2] Office for National Statistics. (2022). Unemployment figures for July to September 2022 show the unemployment rate was largely unchanged from previous quarter. https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/november2022
[3] VisitBritain. (2023). Tourism sector continues recovery with boost from strong summer 2023 domestic holidays and return of international visitors.
https://www.visitbritain.org/news-and-media/visitbritain-upgrades-2023-inbound-tourism-forecast-back-stronger-recovery-driven
[4] BoE (2023) Monetary Policy Report – November 2023
https://www.bankofengland.co.uk/monetary-policy-report/2023/november-2023