Interest rates – the impact on your Recruitment supply chain.

The recent interest rate rises in the UK have sparked conversations about the implications across various industries. I want to dive into the importance of it all to share how these can affect your recruitment supply chain.

Interest rate rises often result in increased borrowing costs for recruitment agencies. With any agency providing contingent labour, most of their turnover is contract wages and typically behind the scenes will be some kind of funding arrangement with a lender. Simply put, rising rates means increased cost and the decision can arise to either reduce your profit or pass the cost on, both can impact a relationship with a customer. Having a strong cash position will help avoid this and promote better conversations but this can take years to build the cash and expertise to keep it.

It sounds obvious but given our first two values are Honesty and Integrity (Respect, Environmental, D&I – HIRED) our route is always the transparent approach, ensuring a communication channel is always open. Clearly transparency is key to maintaining a strong working relationship whilst navigating through a heightened period of economic inflation.

Outside of the direct cost impact and despite strong employment, higher interest rates can also lead to a slowdown in outside business investment, affecting the overall job market. It’s key that your supply chain can adapt to your needs and the changing market, this includes the essentials like how to find talent but also being a resource about external factors and shifting market dynamics.

Without sounding all doom and gloom, with a potentially reduced number of job opportunities, candidates will be more selective in their choices by favouring companies that offer attractive positions and competitive compensation packages. It’s imperative that businesses strengthen their brand and streamline the hiring process to ensure the opportunity remains an attractive as possible for top talent.

Conclusion:

It’s important to recognise the impact of recent interest rate rises as an Employer and as an Agency but by maintaining open communication, empowering company brands and staying as competitive as possible in candidate packages (hard and soft offerings) then we’ll all be able to navigate the evolving talent landscape and find success in acquiring the right talent efficiently, effortlessly and professionally.