The recruitment market has changed, but reward is no less important

A focus on upskilling

Technology, engineering and healthcare continue to experience skills shortages, while AI capability is appearing in an increasing number of job adverts across HR, finance and marketing as well as technical disciplines. That is significant because it points to a change in employer expectations rather than simply a change in recruitment volumes.

Employers aren't looking for more people at any cost. They are looking for different capabilities. That distinction matters.

It's reflected in our own research too. Organisations continue to invest in HR systems, workforce data and automation because workforce decisions are becoming more complex, not less.

Tracking trends

Reward professionals are expected to make sense of labour market trends, internal pay data, retention risks and workforce planning simultaneously.

Better technology supports those decisions, but it doesn't replace judgement.

One finding from the survey illustrates the point particularly well. Almost half of organisations still say they pay new recruits more than existing employees in comparable roles. That figure has moderated since the height of the recruitment market, but it remains surprisingly common.

Those pay decisions were understandable when vacancies were exceptionally difficult to fill. They are harder to justify once recruitment activity begins to slow. This is where employers can be focusing their attention over the next year.

Rather than asking whether recruitment has become easier, the better question is whether reward practices remain fit for the market we're moving into. The answer won't be the same for every organisation, but the direction of travel is becoming clearer.

Less volatility

We are seeing a labour market where stability is returning, turnover is becoming more predictable and wage growth is less volatile. That creates an opportunity to revisit salary structures, strengthen career pathways and address inconsistencies that were accepted during a period of exceptional labour market pressure.

The organisations that benefit most from a calmer market won't necessarily be those spending less on recruitment. They will be the ones using this period to make better decisions about pay, progression and workforce capability before competition intensifies again.

The Indeed figures tell us that recruitment has slowed. Our research suggests something more important. The labour market is becoming less reactive. Reward strategies need to be built for purpose, with the flexibility to respond as the market evolves.

Instead of responding to every shift in the labour market, reward strategies should be grounded in workforce data and aligned with long-term organisational goals.