World of HR: Employers in the UK slow hiring

Companies in the UK are holding back on hiring new workers or replacing employees as the country faces an unstable economy, rising costs, and tariffs, the BBC reported.

In May, job vacancies in the UK fell by 63,000 to the lowest rate since March 2021. Meanwhile, unemployment ticked up to 4.6%, and is expected to continue rising. Businesses are trying to offset expenses as they navigate increased taxes, and an uncertain tariff situation with the US, according to the Guardian.

“There continues to be a weakening in the labor market,” said Liz McKeown, director of economic statistics at the Office for National Statistics (ONS) in a statement. “Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on.”

Some business and political leaders have criticized the ruling Labor Party for raising taxes in the October 2024 budget, but employment minister Alison McGovern believes the UK’s investment in workers and training opportunities will pay off. “Supporting more people into work and putting more money in the pockets of working people is at the heart of our plan for change,” she said.

Some experts believe that US policies are also impacting employer decisions in the UK. “There’s no doubt that US trade policies have contributed to business uncertainty,” said head of financial analysis at AJ Bell, Danni Hewson, according to EuroNews. “There will be companies who have put off investment whilst they figure out exactly what new trade deals might mean for them.”