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HR questions following the Budget

ended 04. November 2024

Following last week's Budget, did you get any calls seeking advice from firms considering downsizing their workforce following the NI and minimum wage increase, or perhaps they are looking at hiring differently in future, e.g. more contractors? Or, if you're a recruiter, perhaps they have put hiring on hold altogether? Any insights or anecdotes from Thursday or Friday, send them across. How has the Budget impacted the HR and recruitment markets?

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Anita WrightVerified
Independent Financial Adviser at Ribble Wealth Management
I recently discussed the impact of last week's Budget with a corporate client of mine who employs 190 people, particularly in light of the increased National Insurance and minimum wage. He plans to adjust his approach to the staff pay negotiations scheduled for January and February. Initially, he intended to offer a 3% pay increase, but he will now lower that figure to 1.8%. This adjustment effectively shifts some of the additional costs onto employees, despite assurances Reeves that Labour's election pledge was not to increase National Insurance on "working people" Even the Office for Budget Responsibility has acknowledged that many employers are likely to offset these increased expenses by slowing wage growth, effectively imposing an indirect tax on employees’ earnings.