The recent increase in employer National Insurance (NI) contributions in the UK, announced in the Autumn Budget 2024, is expected to have a notable impact on the senior recruitment market. The employer NI rate will rise by 1.2 percentage points, reaching 15%, and the earnings threshold at which employers begin to pay NI has been lowered from £9,100 to £5,000. This change is projected to generate an additional £25 billion in tax revenue but significantly raises the cost burden on businesses, especially for those employing higher earners.

From a senior recruitment perspective, companies might adopt varied strategies in response. On one hand, larger employers may delay or limit hiring to mitigate these increased costs, potentially leading to more stringent control over wage budgets. However, some businesses may instead choose to strategically invest in hiring or retaining senior talent. By doing so, they hope to leverage this expertise to drive efficiencies, streamline operations, and protect or enhance profitability amid growing financial pressures.

Furthermore, sectors that rely heavily on skilled financial and strategic management may find that experienced professionals are crucial in navigating cost-saving measures, managing tax implications, or enhancing revenue streams to offset increased NI costs. As a result, we could see continued demand for high-calibre leaders in roles that directly influence a company’s financial health and long-term stability.

Overall, while the impact of the NI hike may curb aggressive expansion plans in some firms, it could conversely open opportunities for strategic hires in senior roles to ensure business resilience.

Here at Savant, we have seen the market at the senior end show signs of improvement when compared to the first half of the year. We look to 2025 with increased positivity as the wider political environment stabilises and confidence improves. It would be interesting to hear comments on the recent changes and the market in general.