So how will the new labour government impact recruiting? The world of recruitment is frequently affected not just by changes in technology and new generations entering the workforce but also by political factors, like the rise of new political parties in leadership positions.
Labour’s landslide win in the general election in 2024 promises to introduce significant changes to the recruitment space, affecting employees and employers alike.
Labour made several promises throughout its campaign, specifically revamping worker rights throughout the UK with its “Plan to Make Work Pay” proposal.
The months ahead are likely to be somewhat tumultuous for companies planning to hire new financial talent and financial candidates.
Here’s what we can expect if Labour lives up to its campaign promises.
Understanding the Labor Government’s Impact on Recruitment
Crucially, it isn’t easy to know which new movements, bills, and policies will be passed by any new government group. However, the last time Labour was in government, we saw significant shifts in the recruitment landscape under Tony Blair and Gordon Brown.
A national minimum wage was introduced to ensure fair remuneration for workers. Labour also boosted rights for employees with capped working hours and better maternity and paternity leave policies. Plus, the group poured significant money into education and skills training, ultimately helping to create a more proficient workforce.
As Labour rose to power again, they announced numerous plans to influence the recruitment space. Minimum wage and worker’s rights will be re-assessed, new tax reforms will come into play, and we’ll also see a greater focus on sustainability and green business practices.
The Impact for Companies Hiring Financial Candidates
For companies looking to recruit new team members, hiring practices, policies, and professional development strategies will likely evolve in the years ahead. A few of the most important shifts business leaders will need to prepare for include:
Updates to Workers Rights
Labour plans significantly improve worker’s rights, starting with cracking down on unfair dismissal in the business landscape. Employees must work for a business for two years before they gain unfair dismissal rights. However, Labour plans to change this, granting the same rights to all team members from the first day of employment. Although employers can still use probationary periods, these must follow fair, transparent guidelines.
Changes to Zero-Hour Contracts
Labour has said it plans to end the one-sided flexibility of exploitative zero-hour contracts, ensuring all team members can request contracts reflecting their regular hours. Additionally, team members may be entitled to reasonable notice of changes in their shift patterns and to be able to request compensation for their cancelled regular hours.
Evolutions for Contract Workers
As contracting becomes increasingly popular in all sectors, including the finance industry, Labour plans to introduce new rules for hiring and supporting temporary employees. Gig economy workers may be reclassified as employees, leading to higher costs for employers who choose to work with freelancers. The Employment Rights Bill may introduce additional rights, such as day-one statutory sick pay for financial agency workers.
Updates to Skill Development and Training
Labour’s continued focus on improving education and training in the UK should lead to a more skilled workforce. This means recruitment companies and hiring managers will potentially have access to more qualified candidates, but they’ll still need to keep on top of upskilling their staff. We could see increased benefits for employers who offer apprenticeships or provide substantial training opportunities to new employees in the years ahead.
Potential Immigration Policies
Although Labour has suggested it will support various aspects of the skilled worker system, it does plan to block companies from hiring overseas employees if they’re unwilling to offer significant training. This could significantly change how businesses work with team members from other countries, narrowing the potential hiring pool for UK teams.
Taxation and Wage Changes
With Labour at the helm of the UK’s government, corporate taxes may increase again, impacting hiring budgets. This could be exacerbated by the current economic climate, which has already forced some financial companies to implement hiring freezes. Additionally, the government is planning some big changes to the national minimum wage.
They’re planning on updating the Low Pay Commission guidelines to reconsider the cost of living, and they also plan on getting rid of the current age bands affecting the national minimum wage. These changes will make salary benchmarking even more important for business leaders.
The Impact on Job Seekers in the Financial Industry
For employees in the financial sector, the changes Labour suggested seem overwhelmingly positive. Labour’s focus appears to be ensuring all employees receive the wages, support, and training they deserve to thrive in their roles.
The most significant changes to prepare for will include:
Improved Rights for Workers
As mentioned above, Labour plans to implement a range of changes that will enhance workers’ rights in the financial sector. Contractors and freelance workers could be classified as employees and have access to more benefits.
Full-time team members will also benefit from an increase in minimum wage and reduced national insurance payments. Additionally, paternity leave may be extended and shared parental leave could become more accessible to new parents.
Additionally, Labour’s focus on social justice and equality means that there’ll be more pressure on business leaders to fight against discrimination, bias and harassment in the workplace. This could lead to the more diverse and inclusive workforce today’s teams are searching for.
New Skill Development Opportunities
Skill development and training opportunities have long been a priority for financial professionals, but many feel they still don’t get the support they need from their employers. Labour’s rise to government, alongside ever-evolving regulations and technologies in the financial sector, will force companies to focus more heavily on professional development.
Labour will encourage companies to implement new coaching, training, and upskilling programmes for existing and new employees. We’re also likely to see a wider range of government-funded retraining and training programs, particularly in emerging industries like sustainable finance.
Labour may also provide companies with more support with training initiatives, particularly when tackling skill gaps in digital literacy and AI. However, it’s worth noting that greater investment in skill development could also lead to a more competitive market for job seekers.
Job Market Shifts and Work-Life Balance
The financial job market is constantly changing with new technologies and policies. However, with Labour in government, we could see additional shifts, creating new opportunities for employees to explore different roles. In particular, increased roles will likely be focused on environmental, social, and governance (ESG) initiatives.
Evolving contractor rights will also introduce new opportunities for financial professionals to experiment with more flexible roles and freelance positions. A changing approach to zero-hour contracts could also lead to better job security for professionals.
On a broader scale, Labour’s new policies could also significantly impact work-life balance. There may be a greater push for companies to deploy the four-day workweek model, and the rights to request flexible working could be expanded, offering access to more non-traditional schedules.
New regulations that affect overtime and out-of-hours contact could also be implemented to fight back against the risk of burnout in highly stressful industries.
Looking Ahead to the Next Age of Recruitment
While it’s impossible to know which policies will come to light in the months and years ahead, we can expect to see changes in the recruitment sector going forward. Labour has big aspirations for changing how companies hire new team members, develop their staff, and pay their employees.
This could lead to a better working environment and experience for financial candidates, but it will also mean that business leaders and HR teams must rethink their approach.
Ensure you’re prepared for the new recruitment age by working with an experienced financial recruitment team. Rebus Recruitment can help you navigate the new policies that emerge as they’re implemented, whether you’re searching for a finance role or looking to hire the top candidates in the industry.
Thanks
Rachel
About Rebus Financial Recruitment
Rebus Financial Recruitment provides a specialist and focused recruitment service to its customers, ranging from various organisations, including SMEs, to large PLCs.
We strive to offer both the client and candidate a seamless recruitment experience. Using our expertise, we get to the heart of employer and employee needs, and, in doing so, we match the two perfectly.
To learn more, contact one of our team members today or call us at 01282 930930.
