UK Autumn Budget 2024 – Key Implications for Recruitment

In the first Labour budget since 2000, the chancellor, Rachel Reeves, announced a variety of measures designed to, ‘fix the foundations of the economy and deliver change by protecting working people, fixing the NHS and rebuilding Britain’. Here we look at the main impacts of the budget on recruitment, and how it’s likely to affect both permanent and temporary roles. 

Budget basics

This budget, introduced by Chancellor Rachel Reeves, contains several shifts in National Insurance, minimum wage and skills investment that hold specific relevance for recruitment in sectors such as Engineering, Building Management Systems, Automation & Process Controls, Aviation and aerospace, Manufacturing, IT and Medical and Life Sciences. 

Now the dust has settled on Ms Reeve’s budget, let’s look at some key points affecting recruitment:

National Insurance & Employment Costs

As per its manifesto, the government chose not to increase National Insurance Contributions (NICs) on individual working people, instead opting to, ‘increase the rate of employer NICs by 1.2 percentage points to 15%’. It’s anticipated that this will raise around £25 billion per annum. The Secondary Threshold at which employers begin to pay National Insurance (NI) has also been reduced to £5,000 (from £9,100) per year, beginning in April 2026.

To support smaller businesses, the chancellor has increased the Employment Allowance to £10,500 (from £5,000) and has removed the £100,000 threshold, expanding it to all eligible employers. This is expected to mean that 865,000 employers will not pay any NICs in the coming tax year and that if businesses employ four full-time workers on the National Living Wage (NLW) they will pay no NI on their wages. It’s anticipated that over a million companies will pay either the same as they did previously, or in some cases less.

While many experts see this as good for working people, some pundits have pointed out that it will have the effect of raising employment costs for businesses – some predict that for each employee who earns above the threshold, individual businesses may incur an additional £615 in costs.

For many employers already struggling with the high costs of energy, supplies, fuel, rent and interest rates it means that hiring strategies will be scrutinised and very carefully planned. CBSbutler can support through the provision of market information, benchmarking, and salary/rate surveys.

CBSbutler offers employers the very best permanent, contract and/or temporary talent to support organisations across a range of professional services whether they’re based in the UK, Europe or the USA.

Increased Demand for Skilled Roles in Infrastructure and Green Sectors

In order to ‘Invest in Britain’s future’ the Chancellor also announced over £100 billion public capital investment over the next five years into major infrastructure projects such as rebuilding schools and hospitals, fixing roads, funding for local transport and regional growth and energy transition initiatives, as well as digital infrastructure to ensure inclusive high power broadband.

Much of this investment will be guided by a new body – the National Infrastructure and Service Transformation Authority which will implement the Government’s infrastructure strategy and support major projects before they receive HM Treasury approval for funding.

The national and local planning approval process will also be streamlined to improve the process for infrastructure projects including transport, energy, water and waste, and local planning authorities will receive £46 million to improve capacity.

Green energy projects and Net Zero initiatives also received a boost, with an initial £125 million to establish Great British Energy, £3.9 billion for carbon capture, use and storage, and hydrogen projects, the £2.7 billion development of Sizewell C, and £1 billion to ensure that homes in the UK are more energy efficient under the Warm Homes Plan. £134 million is also being allocated port infrastructure to develop floating offshore wind farms.

Transport is also being targeted for improvement with new HS2, East West Rail, and northern rail projects, designed to improve connectivity. Roads will receive £1.6 billion to maintain and renew them and £100 million has been announced for cycling and walking infrastructure. EV charging stations will be encouraged with £200 million allocated to their rollout.

Also receiving money is the digital infrastructure space, with £500 million being allocated to improve broadband and mobile connections in rural areas. And a new grid connection process is being developed to improve energy security.

All of which is excellent news for professionals skilled in green energy, healthcare, and construction and for employers actively seeking to expand their workforce in technical and engineering roles so that they can address shortages driven by new investments. 

Wage Increases and Market Adjustments

As we mentioned earlier, the National Living Wage (NLW) will rise to £12.21 per hour in April 2025 for people over 21. The Low Pay Commission (LPC) advocated for this increase which amounts to an extra £85.08 per month to raise people out of poverty. The National Minimum Wage, for people aged between 18 and 20 will also increase to £10 per hour and mark the government’s steps towards an eventual single adult rate. 

Although these increases seem minimal they will mark a significant cost increase for clients employing lower-wage roles in support sectors. This change may prompt employers to focus on recruiting and, most importantly, retaining skilled workers for both temporary and permanent positions, something we here at CBSbutler can assist both employers and employees with.

New Growth and Skills Levy

The government is providing £40 million to transform the Apprenticeship Levy into a Growth and Skills Levy to provide shorter and foundation apprenticeships in key sectors such as engineering, healthcare, and the tech sector. Working with employers, providers and learners, Skills England will consult to ensure that levy-funded training meets the future needs of employers, upskilling the country to manage the skills shortages that are anticipated in vital sectors. 

We’ve been supporting clients with adaptable workforce development aligned with sector-specific needs for over 20 years and our brand is synonymous with success, as demonstrated by our continued relationship with over 1,500 leading employers across the country, and beyond. 

If your business is facing any budget-related talent challenges, or you require any market advice or information, or you’re looking for a new role in Engineering, Building Management Systems, Automation & Process Controls, Aviation and aerospace, Manufacturing, IT or Medical and Life Sciences, call us today on +44 (0)1737 822 000 or fill in the contact form here.