A fifth of businesses will not be raising wages this year, as managers tighten their recruitment and staffing budgets, new research*.
Indeed Flex’s survey of HR, procurement and operations professionals found that half (49%) of businesses have seen labour costs rise as workers’ wage demands increase in the face of high inflation. Separate data from the ONS shows private sector regular pay jumped by 7.2% between September and November 2022, the biggest increase ever seen outside the pandemic1.
41% of the businesses polled by Indeed Flex say they have also seen a decrease in sales as a result of the cost of living crisis and economic downturn.
The pincer movement of declining sales and rising pay demands has prompted more than a quarter (27%) of companies to say they intend to slice recruitment budgets in 2023. A further 26% of firms plan to freeze hiring completely and a sixth of HR professionals (16%) say their biggest challenge this year will be to maintain staffing levels while reducing costs.
58% of businesses will be turning to temporary workers to support their permanent teams this year. A quarter (28%) of HR professionals whose business already uses temporary workers expect to make increased use of temps during 2023.
Novo Constare, CEO and Co-founder of Indeed Flex, said: “While wage pressure is being felt across the board, some businesses are feeling the economic downturn more acutely than others. For those seeking to trim costs, holding off on additional recruitment is a natural place to start.
“But our data also reveals that at the same time, many businesses are keen to maintain staffing levels – particularly during peak periods – while keeping costs in check.
“Our research shows over half of businesses are now turning to temporary staff to help them achieve these twin goals. Having access to a pool of skilled temporary staff gives the certainty of having permanent employees without the ongoing cost commitment, plus the flexibility to dial staff numbers up or down as the business’s needs change.
“Using temps doesn’t necessarily mean seeing new faces at the start of every shift either. Our data shows many committed Flexers choose to work regularly for the same employer, forging strong relationships and adding to their skills, training and experience.”