Regional variations

The regional view shows limited growth, with the longer-term outlook favouring London, the south of England, and select sub-regional hot spots. After a strong start in the first half of 2023, payroll employment was broadly flat in most nations and regions in Q3. The NatWest Regional Purchasing Managers’ Index (PMI) survey also showed a fall in private sector output in October 2023 in nine out of 12 regions and nations.

In 2024, all regions and nations will face the same hurdles of stubborn inflation, elevated interest rates, and tight fiscal policy. At the same time, weak global demand will present particular challenges for manufacturing-led regions. And while every region is expected to expand in output terms in 2024, growth will be minimal compared to previous years.

London, the three other southern regions, and the North West are set to perform best, fuelled by professional services, administrative & support services, and human health. Conversely, Scotland, the North East, Wales, and Yorkshire & Humber will experience much lower growth rates. The regional disparities are likely to be much narrower than they have been historically, not least because no area is expected to achieve standout growth.

Global megatrends

For 2024, five interconnected megatrends will continue to shape economic and political spheres, transform workplaces, drive digital evolution, and spotlight the importance of purpose.

Politically and economically, the coming year promises further instability for employers and staff, with a looming general election and a pervasive cost-of-living crisis. There is hope, however, from Q3. Adecco’s most recent survey data shows nearly half of large employers anticipate extending their full-time headcount by 2025. So, while a slowdown is predicted for the first half of 2024, we look forward to growth from mid-year and in the immediate years to come.

To tackle talent scarcity issues, many employers are reviewing how they connect with future workers across all generations and considering alternative engagement models to get the job done, turning to the growing pool of freelance contractors participating in the gig economy. There is also a shift towards hiring based on skills rather than predefined jobs, prioritising the capacity to learn over traditional qualifications and experience.

Flexibility is a key priority for today’s candidates. In 2024, the Employment Relations (Flexible Working) Act 2023 will formalise and expand employees’ rights to flexible working, signifying a clear departure from traditional 9-to-5 schedules.

Meanwhile, the acceleration of artificial intelligence (AI) and cloud computing are fundamentally changing how, where, and when we work. Employers are overhauling business models and processes to keep step with advancements but must recognise the importance of equipping workforces with the requisite digital skills.

Finally, purpose is an increasingly critical differentiator for employers. Our latest survey found that 73% of large businesses believe their purpose and values play a significant part in staff retention.

Conversely, 22% of employees are looking to change jobs in 2024 because they don’t find their work meaningful enough.