High Interest Rates – Will this be the New Norm?

With interest rates tracking at the highest rate for 15 years and uncertainty whether these will remain, many are wondering if these high rates will become the new normal for the foreseeable future.

The ideology behind raising interest rates to tackle inflation relies on the cost to borrow money becomes so high that people reduce their spending on goods. While the Bank of England predict that inflation will fall to the target 2% for the UK by the first half of 2024, where do we think interest rates will settle? At this stage it’s an unknown, and any estimates are purely educated guesses, however many banks predict 4% in on the way in 2024.

How will this impact your hiring strategy?

Higher interest rates can create several challenges. On one side the impact of increasing costs to businesses can lead to a slowdown in hiring or redundancies, increasing the talent pool available for the rest of the market. However, this is only a small reflection of the market.
With what can be still considered a strong economy, the demand to retain and hire staff is prevalent. With the costs on consumers higher than ever, many candidates are seeking increases in wages to compensate and often moving jobs is the way to achieve this. You may benefit from attracting candidates this way, or struggle with counter offers as businesses are keen to retain their staff.

What is the impact on candidates?

As wage levels rise, companies are compelled to offer higher salaries to attract and retain top talent. The market has put the power in the candidates’ hands, with job security a top priority the talent pools are small and unemployment rates remain low.

With the competition for talented employees becoming increasingly fierce, HR departments and recruitment agencies must find ways to meet clients’ high expectations.

What strategies are there to overcome these market challenges?

 We don’t know how long this market will last, but we’re here to help overcome these challenges.

Invest in your employer brand and culture.

By creating a positive and engaging work culture, offering attractive benefits, and providing opportunities for growth, companies can attract and retain top talent, even when interest rates are high.

Partner with a recruitment agency.

Having eyes and ears on the ground are key in an ever-changing market. We understand recruitment is hard to do successfully as a side-job for managers/departments and engaging an agency to represent your brand could be the solution.

Streamline your hiring.

The market moves quickly, therefore it’s important to make sure your processes are modern, effective, and not disengaging candidates at any stage of the journey.

Consider outsourcing through managed services.

Is an RPO or an MSP right for you? You may benefit from outsourcing all hiring. A flexible solution can adapt to the market as it changes whilst giving you the competitive advantage, without the employment overhead.

As a specialized recruitment agency, ODC has over a decade of experience in this field and a large talent pool of professionals to source from. Our recruiters are used to the ebbs and flows of the industry and are experts in the best ways to seek new talent in temporary, permanent, and executive-level roles.

We believe each business will have a unique challenge, and we’re here to help. We’re able to provide unique market insights to solve your hiring challenges. Get in touch to find out how we can help.