Our Q1 2025 analysis of the executive market, reviews the UK and wider economies, recent performance, projections for the next few months and beyond, the market for c-suite and senior leadership positions and trends that executives need to be aware of to stay ahead of the curve and promote both organisational and personal professional growth.
It might feel as though storms have moved in permanently over the UK economy, casting a long shadow over prospects of growth in the near term but there are breaks in the cloud and some bright spots too.
Let’s start with the challenges, and then focus on the positives.
The October 2024 budget continues to weigh heavily with rising business costs stifling growth. Inflation, though nowhere near the double digit figures we saw in recent years, did not fall quickly enough in Q4 2024 to allow the hoped-for interest rate falls that might have triggered greater investment and lower operational costs. In April, companies may have to increase prices further to accommodate employer National Insurance contribution rises, risking further inflation hikes.
Latest data shows UK GDP flatlined at 0% in Q3, slower than the Eurozone, 0.4% in Q3 and the US, 0.8%.
UK government borrowing reached record highs, and all eyes are now on Chancellor Rachel Reeves’s next move: will she be forced to break her election promises and raise taxes, undermining consumer and business confidence further, or cut public services?
There was a shock drop in retail sales over Christmas and new export sales were down for the first time in more than 14 months at the end of 2024. The fact that this was felt hardest in trade with the EU is especially concerning when the second coming of US President Donald Trump threatens to bring in blanket international tariffs of up to 20%. Meanwhile, the Pound has been falling against the Dollar.
However, there are some green shoots, if you look hard enough. UK inflation did fall marginally, raising the prospect of an imminent interest rate cut, and economic output shifted upwards slightly.
A precarious truce (at the time of writing) in the Middle East could lift global markets and there is a chance Trump’s tariff threats will not come to anything. Most economists agree they would harm US economic interests in the long term, plus the UK’s service industry-based economy would be hit much less severely than manufacturing countries like Germany.
New IMF predictions published on January 17 projected UK growth at 1.6% for 2025, up marginally on previous forecasts, and higher than the Eurozone, but lower than the “steady” global growth it anticipates of 3.3%.
GfK’s Consumer Confidence Index, conducted on behalf of the European Commission, also rose a little in December.
Growth remains stronger than expected in the US and sentiment could pick up on this side of the Atlantic with some decent tailwinds, especially as more forward-looking organisations start to reap the returns on early and disciplined AI spending.
The government says its commitment to “mainlining” AI into the veins of the British economy, which includes seeking investment in datacentres and building a super-computer, will turbocharge the economy and cement the UK, already third behind the US and China, as a leading place to do AI-based business.
It is also seeking to fix the industrial bottlenecks that have impeded growth such as planning and infrastructure, which could attract more global investment and boost growth in the medium to longer term.
That economic uncertainty and pessimism around the autumn budget translated into slow hiring in Q4 2024, with permanent jobs falling at the fastest rate in December since the Covid pandemic. Vacancies were down in all sectors, but the steepest decline was seen in executive and professional roles.
However, there is hope for those willing to reskill and repivot into new growth sectors, particularly AI and sustainability, as we shall see in our analysis of executive trends.
The pace of job cuts in December was higher than in 15 years (except for the pandemic) with a quarter of private sector businesses freezing hiring and cutting vacancies. January, traditionally a time for hiring to pick up, remains muted so far. It is likely to remain so, as a general picture, until organisations have assessed the impact of those higher NI costs, inflationary trends and have a better idea of where interest rates and US trade are headed.
Two thirds of employers said the NI hike would make it harder to increase wages and offer bonuses, demonstrating the need for senior leaders and executives to upskill and increase their value proposition to stay relevant and competitively rewarded.
Candidates say securing the most senior positions is getting harder, competition is fiercer, and many are not sure exactly what companies are looking for and cannot understand why they are not getting responses from applications for jobs for which they believe they are qualified.
Those looking for new positions need to gain an understanding of how the job market has changed since they were last out there and look at areas of growth and key skills in demand.
However, the tension is exacerbated by the fact that 45% of HR professionals and employers admit they do not have a full grasp of what skills their organisations need to take them into an AI-first future.
It is, therefore, equally critical for HR and other team leaders doing the hiring to be literate in how AI is impacting roles so they can align talent acquisition and upskilling with technology-driven strategic objectives and budgetary considerations. To optimise and update workforce skills bases, they should be using the latest AI tools and platforms to gain data-driven insights.
Candidates who have thoroughly researched how they believe AI can support their target employers’ organisations will shine.
Salary inflation at the highest levels shows that while there may be fewer vacancies, especially in legacy c-suite and senior leadership roles, companies are willing to pay more to acquire and retain the right talent that are able to demonstrate in demand skills which include AI and digital literacy but also include complex problem solving and softer skills like social perspective and emotional intelligence.
Economic growth is forecast later into 2025, and organisations will need to boost hiring as it happens. Whether employer or potential candidate, constant awareness and analysis of, and adjustment to, emerging trends will be crucial to seizing opportunities that arise.
The country is currently stuck in something of a hiring paradox. Two thirds of UK professionals plan to look for a new job this year, 61% say it is getting harder and 20% fear they lack the skills for the future. Meanwhile, HR professionals are finding it increasingly challenging to find qualified talent. So, the market is flooded with talent, just the wrong kind.
This can be largely attributed to the fast-changing landscape driven by the acceleration of Generative AI and its impact on all aspects of work, which is demanding entirely new approaches. In-demand skills that existed in 2016, when AI was first emerging as a realistic driver of business transformation, are expected to have changed by 65% in 2030, just five years away.
More than half of LinkedIn’s list of jobs on the rise for 2025 did not even exist 25 years ago. The top two, globally, are AI engineer and AI consultant. Sustainability credentials are also becoming more important and jobs that require these skills are more difficult to fill. The two sectors alone account for half the top 10 growing job roles in the LinkedIn UK list.
That does not mean candidates without hard technical skills are unwanted. Executives and senior leaders who can confidently and effectively oversee business transformation driven by emerging technologies are highly sought after. Keywords looked for include soft skills such as curiosity, agility, creativity and empathy.
Reskilling or upskilling to serve the green economy will also pay off in 2025. LinkedIn research showed global demand for talent in sustainability grew twice as quickly as supply in 2023 and 2024, with a 54% higher hiring rate than the average.
Janine Chamberlin, Head of LinkedIn UK, reflected what Rialto has been advising clients and followers: “Resilience, adaptability, and continuous learning will be key to navigating this rapidly changing landscape. And for businesses looking to make the most of the opportunities presented by new and emerging technologies, it’s clear that investing in upskilling initiatives, and AI tools to help their HR teams, will be vital.”
Employers are also struggling to negotiate the conflict between their wish to see staff fully back in the office while talent prioritises hybrid and flexible work. Another HR threat to organisational growth is rising levels of attrition and sickness. Executives need to implement data-driven predictive analytics to maintain productivity levels and keep workforce-associated costs down.
Rialto director Richard Chiumento said: “As we can see, AI and other emerging technologies, including those focussed on the green economy, are the areas seeing real growth as other sectors and legacy roles continue to struggle.
“It has been an especially difficult period for executives looking for their next role, but those who are open to upskilling and to repivot can exploit the increasing demand against limited supply in different growth areas.
“Meanwhile, all the evidence shows that executives and senior leaders wishing to improve their performance within their current organisation will accelerate their own positive career trajectories and organisational success by getting ahead and staying ahead in digital and AI adoption and scaling up. It’s the single most important area for leadership to be focusing on in 2025.”
See our last insight on AI spending strategies.
The pressure to act decisively is intensifying. Yet many leaders find themselves navigating incremental changes, unsure of how to transform their business models or confidently prove GenAI’s ROI.
Responding to feedback from our c-suite and senior leadership clients, Rialto are facilitating a virtual strategic collaboration programme between leaders from across the globe, to share experiences, perspectives, and best practices on GenAI adoption. It is designed to support leaders with the critical insights, tools, and actionable strategies needed to broaden their understanding of the complexities & opportunities of GenAI.
All participants in the programme will receive a personalised and group alignment report, to support them to lead their organisation more confidently in the GenAI era.
To find more details and register onto the Adoption of GenAI Global Virtual Dialogue click here.
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