In our latest article, our Director of Development and Construction, Chris Litras, dives into 4 economic factors that are impacting the industry, to help you stay ahead of the curve in today’s rapidly evolving business and hiring landscape.
Mortgage activity
Simon Gammon, Managing Partner at Knight Frank Finance suggested at our flagship event Banking on the Future that we should expect a reduction in mortgage rates to around 4-5%.
Lower rates result in more affordable mortgages which can increase demand for housing. The higher demand means greater need for residential developments, therefore this will present build opportunities for businesses in the real estate sector.
Despite this however, Simon continued to share how a drop in mortgage applications from 60,000 to 40,000 over the last 12 months has been reported, indicating a potential slowdown in the housing market, which businesses should consider when planning their next steps.
2. Interest rates
It is anticipated that there will be an increase in interest rates followed by a decline, suggesting a change in the monetary policy environment.
Higher interest rates can affect borrowing costs for businesses, potentially impacting investment decisions and economic growth.
However, the subsequent decline in interest rates may benefit businesses by reducing borrowing costs and supporting faster income growth for assets. It is essential that businesses closely monitor interest rate changes and adapt their strategies accordingly.
In May 2023, Andrew Deverell-Smith reported in his Total Talent Update, “Whilst we forecast mixed conditions, we remain very optimistic that companies who are focused, determined, and funded can achieve significant growth under these conditions by attracting and retaining the best people in their organisations.”
3. Cost of living
The predicted drop in inflation is targeted at 2% within the next year indicating a potential improvement in the cost-of-living crisis. Lower inflation can relieve financial pressure on both businesses and individuals, decreasing costs for energy & building materials and allowing businesses to offer employees more pay.
However, businesses that are serious about retaining their top talent should look further than remuneration according to deverellsmith’s sister company Hintel - an RPO, Recruitment Process Outsourcing business.
Pete Sheppard - Managing Director at Hintel commented, “An employer now needs to take a holistic approach to support wellbeing and provide the training for soft skills as well as academic development.”
Ensuring you give employees clear progression plans, learning and development programmes, the option for flexibility within their role or even covering employees' travel cards for a month will ultimately improve employee satisfaction and motivation.
4. Tight labour market
The scarcity of qualified candidates in various disciplines attributed to factors such as Brexit, Covid, cost of living and flexible working requirements has presented challenges for businesses looking to attract top talent. In such a competitive landscape, innovative recruitment strategies are necessary to stand out and secure skilled professionals.
In spite of that, according to deverellsmith’s data, we are experiencing a buyer’s market for the first time since the pandemic. Job applications have soared, increasing by 196% compared to 2022, whereas job vacancies have stayed the same.
Andrew Deverell-Smith continues to comment within his Total Talent update, “Smart, bold, and well-capitalised organisations within our sector are absolutely taking advantage of those conditions in attracting the top 1% of the market to their businesses.”
The key word here is confidence…
Although we find ourselves in a tight labour market, deverellsmith has access to world-class candidates within the real estate sector and is working with market-leading housebuilders and developers to find businesses committed to growing the top talent to get them there.
Get in touch to see how I can support you in leveraging our expertise and network of candidates within the real estate space, and help your business find high-quality candidates.
Chris is an experienced Director in construction recruitment. Having worked at a market-leading corporate agency for over a decade, he brings a wealth of knowledge and experience to the industry and is able to advise on all aspects of the recruitment process to secure the very best talent for deverellsmith’s clients.
If you would like to discuss how we can support your hiring needs, get in touch below.
