How minimum wage increases affect the recruitment business

From April 2024, the National Minimum Wage and National Living Wage in the UK will undergo its biggest cash increase in history. Amid the ongoing cost of living crisis and rising expense for businesses and households alike, this increase is set to significantly impact the UK economy—and every business.

For recruitment specifically, it’s very possible that this increase will affect the number of employment opportunities in the UK as businesses are required to spend more on existing, already-filled positions. But our recent poll on LinkedIn shows that the concerns of recruitment businesses are more diverse and complex.

What’s changing in April 2024?

The headline for April 2024 is an increase in National Living Wage by almost 10% to £11.44 an hour. This is supported by similar—albeit smaller—increases to the minimum wage for younger workers and apprentices.

However, this is just one part of the story. At the same time, the government will reduce the age threshold for National Living Wage to 21, resulting in a significant increase for a huge number of employees.

As it stands, all full-time workers on the National Living Wage will see a pay increase of £1,800 a year. But this is a cost that must be paid by employers who are already struggling with rising costs.

What recruitment businesses are telling us

Over on our LinkedIn page, we recently ran a poll to gauge opinions about the impact of the minimum wage increase. Unsurprisingly, 46% of respondents told us they’re already seeing a reduction in roles, intensifying competition to place candidates.

Just over a third (38%) of people told us they were seeing no impact at all—but this may change as the increase comes into effect.

What we found most interesting, though, is a significant number of people (15%) reporting an impact in other areas. While recent studies on the impact of minimum wage increases suggest no significant effect on employment—even during a recession—bringing more people into the National Living Wage may increase competition for roles, while it’s likely that clients with growing pressure on costs will become more resistant, harder to negotiate with, and less compromising on cost.

Building more effective sales skills for recruiters

From our poll, it’s clear that opinions on the National Living Wage increase are mixed—but the employment market remains difficult to predict and more competitive year after year. That’s why it’s so vital that recruiters keep their sales and client acquisition skills fresh. And why we’ve developed a new course to unlock unprecedented sales success.

Delivered as an 8-week intensive course, Recruitment Sales Master & Client Acquisition is a blended learning programme designed for recruitment consultants.

Throughout the course, recruiters will learn useful skills including:

• Advanced selling techniques to drive higher conversion rates
• Strategies for identifying and attracting potential clients
• How to close deals confidently
• How to create win-win situations and negotiate effectively

See all the benefits and outcomes of our new online recruiter sales mastery course