Tax hikes push firms to automate jobs, says top UK recruiter
Tax hikes and wage pressures are putting Brits at risk of losing roles to automation and offshoring, a top UK recruitment firm has warned.
Hays has warned Britain is becoming “unattractive to hire people permanently” as employer costs mounted over the last year.
“Wage pressures and national insurance changes are pushing employers to explore automation and offshoring,” Tom Way, Hays’ UK and Ireland chief executive, said.
He said the rising financial strain combined with loyalty to employers “no longer considered a valuable trait” had created a weakness across the jobs market.
Businesses have been reeling over the last year after Chancellor Rachel Reeves hiked the national insurance 1.2 per cent in the 2024 Autumn Budget.
This was also accompanied with an increase to the national minimum wage. Both changes came into effect this April.
Hays said the ongoing pressures had force companies to evaluate where “humans are essential” leading to many turning to the likes of AI.
Tax pressures lead firms to trim headcount
The rise of artificial intelligence has already began to dampen the jobs market with firms scaling back hiring roles.
A Bank of England survey of UK finance chiefs released earlier this month showed employers had slashed jobs at the fastest pace in four years as they suffer the costs of Reeves’ tax hikes.
Companies cut employment by an annual rate of 0.5 per cent in the three months to August – the worst figure since 2021.
The UK’s Big Four accountancy giants have chopped their intake of graduate roles – in some cases by as much as 29 per cent – as they bet on AI.
In the banking industry, City PM reported earlier this year one in ten jobs were at risk of being asked as the industry ploughs billions into AI.
As attention turns towards Rachel Reeves’ second Autumn Budget, firms have called for some relief to heavy financial burden thrust upon them.
Britain’s largest retail business group warned on Tuesday that further hikes would keep shop prices “higher for longer”