The first quarter of 2024 has presented a mixed economic picture. Buoyant financial markets continue to defy what should be significant drag factors including a depressed Executive jobs market, lingering higher inflation and interest rates.
Despite the ongoing conflicts in the Ukraine and the Middle East – the latter periodically threatening to spill out across the region and both continuing to affect energy prices – the FTSE 100 and Dow Jones keep hitting record levels.
Both have been partially held up by the explosion in AI and the vast potential the disruptive technology offers in efficiencies and growth in almost every sector, plus the anticipation of imminent interest rate reductions from central banks in the UK, US and EU as inflation cools – less quickly than was hoped for but heading in the right direction – from last year’s double digit rates.
The UK fell into a shallow mini-recession at the end of 2023 but 0.6% growth in the first quarter of this year seems to have given rise to cautious notes of optimism, despite the latest ONS figures showing increased economic inactivity and lower employment levels. Hiring is down and 178k fewer people in employment in the 3 months to Q1 2024.
Business advisory and accountancy firm BDO’s latest Business Trends report saw its Output Index rise by 2.09pts in April, the highest level for two years, driven largely by the services sector.
Earnings grew by 6% in January to March, or by 2% in real terms, the 10th month they have risen faster than inflation. As the cost of living crisis eases, consumers are starting to spend again. Hospitality, retail and leisure are feeling the first wave as confidence increases but this should filter across into other sectors, lifting the general outlook after months of caution, stagnation and, in some areas, constriction. We may see this translate into a more healthy and dynamic jobs market into the summer, especially if the Bank of England starts to drop interest rates though May’s slightly disappointing drop to 2.3% instead of the anticipated 2.1% could see those falls come later than the City may have hoped for.
In the UK at least, it feels as though the weather is reflecting the economy. After months of rain, grey skies and a slight depression in the air, we’ve had a few days of glorious sunshine and brighter spots in the economy to remind us that summer – and the increased spending that goes with it – are around the corner.
Of course, it’s also the year of elections – the UK, US, India, South Africa, Mexico, a record year for voters going to the polls, globally. Vote-hungry governments tend to increase spending and financial flows in the run up to election day which could have a major impact on the macro economy and UK and US domestic GDP and spending.
Any uplift could, however, be offset by uncertainty around future policies under new administrations which can see international investors hold back and await announcements on spending priorities and, hopefully, increased economic certainty and stability.
With so much up in the air, all senior leaders and executives should have an eye on the near future – is your organisation ready for a potential economic surge if interest rates drop by more than one or two increments on both sides of the Atlantic and across the EU? Is your strategy agile enough to manage whatever direction the future UK and US governments may take? Or are you ready to seize any opportunities that may arise in a more vigorous job market.
If the UK election goes as per predictions, an incoming Labour will have to wait and see what’s left in the Treasury coffers before embarking on any major spending but the party is keen to be seen as fiscally responsible and a friend to business so we could see continued restrictions on public spending alongside some generous incentives for R&D, exports and international investment. Be ready to capitalise, whether through your organisational growth strategy or your personal professional development.
One expectation which can be all but guaranteed is increased spending in generative AI and other frontier technologies. The UK has lagged behind China and the US and is starting to play catch up. Whether you are looking for a new external role or for progression within your current organisation, it is essential that you stay abreast of the fast-moving technologies disrupting every sector at every level.
A new survey has revealed a mood of hesitancy in the job market as workers increasingly opt to stay in their current roles and sit out the economic uncertainty.
This comes after what was termed the Great Resignation, during and immediately after Covid, when senior leaders and executives were among those quitting or moving in record numbers after re-evaluating their life choices during lockdowns.
The CIPD’s latest quarterly labour force study also found that fewer than a third of the 2,000 businesses it surveyed expected to hire more staff over summer with just over half planning to maintain current levels.
The report predicted further falls in vacancies as people stay put and companies freeze recruitment to reduce a post-Covid over-staffing hangover.
The picture was reflected in the latest BDO Employment index which hit a new decade low after 10 consecutive months of decline. The Office for National Statistics’ latest labour market overview revealed a similarly gloomy picture for the first quarter of 2024 with vacancies down by another 26,000, the 22nd consecutive monthly drop. Vacancies were down by a miserable 17.3% on the same period last year.
Rialto director Richard Chiumento said: “Whenever there are more candidates going for fewer posts, it becomes even more essential for individuals to up their game, ensuring they are visible and well-presented digitally, networking effectively and upskilling if necessary to compete in the roles which are expanding in this tight market, mainly those focussed on integrating Generative AI and other disruptive technologies.
“They may need support to re-pivot, upskill, develop new leadership strategies or network to expand opportunities to support them in their current roles or to access the hidden job market with a compelling value proposition which will resonate in their chosen segments”
However, as we have explored above, there are positive signs of the shoots of recovery so expect a slow turnaround into the next quarter which could accelerate towards the end of the year, with the caveat, of course, of the unpredictable global and domestic impact of national elections.
Rialto can help you refine and target your search to align with future market requirements when utilising our award-winning executive outplacement or executive transition programmes with one-to-one personalised support. We have helped 7000+ C-suite & senior clients win prime roles in competitive markets in almost every key global marketplace. Contact us for a free initial discussion on how we can support you or your team.
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