As the dust settles on the UK’s latest Budget announcement, business leaders with workforce responsibilities are examining its impact on their roles and organisations.
The Budget, presented amidst challenging economic conditions, brings targeted initiatives and changes in funding that will affect employment practices, recruitment strategies, and workforce management. Here, we summarise key points from the Budget, particularly as they relate to HR and employment, to provide insights on what business leaders should expect in the months ahead.
1. Investment in Skills and Training
A central theme of the Budget was enhancing the UK workforce’s skillset, emphasising future-ready skills and lifelong learning. Recognising the needs of an evolving digital and green economy, the Government has committed to significant funding to increase the accessibility of skills training in emerging fields. This focus will benefit organisations working to close skills gaps, as it may lead to more candidates with specialised skills in technology, renewable energy, and digital transformation.
Additionally, schemes like the “Lifelong Loan Entitlement” (LLE), set to launch in 2025, will provide workers with flexible access to financial support for upskilling throughout their careers. Business leaders can encourage employees to take advantage of such schemes, potentially aiding employee retention, by supporting career growth within the organisation.
2. Workforce Inclusivity: Boosts for Childcare and Flexible Working
To address barriers to workforce participation, particularly among parents and carers, the Budget has earmarked funds to expand affordable childcare. This initiative aims to ease the financial and logistical challenges for working parents, enabling them to re-enter or remain in the workforce. Business leaders should consider how expanded childcare access can influence recruitment, employee retention, and absenteeism. Furthermore, with continued calls for flexible working arrangements, businesses may look to blend government support with in-house policies to support work-life balance, known to be a key factor in employee satisfaction.
The Budget’s increased investment in inclusive workforce participation reflects a broader governmental push toward diversity, equity, and inclusion (DEI) that organisations may wish to mirror. Expanding internal DEI initiatives to align with these public goals can enhance the employer brand and attract a more diverse talent pool.
3. National Minimum Wage and Living Wage Increases
In line with the Government’s ambition to improve living standards, the Budget announced a rise in the National Minimum Wage (NMW) and the Living Wage. While beneficial to workers, this increase will raise costs for employers, especially those with large, low-wage workforces. It will also mean reassessing wage structures to accommodate new minimums while maintaining fair pay across the board. This shift might also impact budgeting for hiring and other workforce costs.
To balance these rising wage demands, organisations may look to adopt more efficient workforce management strategies, like automated scheduling and workforce planning, that can help streamline processes and reduce operational costs.
4. Encouraging Employment of Older Workers
The Budget places an emphasis on policies that support the recruitment and retention of older workers, aiming to capitalise on their experience and contribute to a multi-generational workforce to enhance knowledge sharing and create more inclusive workplaces. The Government is offering support for tailored training and wellbeing programmes for older workers. Employers can build on this initiative by developing age-inclusive policies, reassessing recruitment practices to reduce age bias, and exploring flexible work arrangements that cater to older workers’ preferences.
5. Green Jobs and Sustainability Initiatives
With the UK’s commitment to reaching net-zero emissions by 2050, the Budget has allocated funds toward creating “green jobs” in industries that support sustainability. As the demand for eco-friendly products and services grows, the workforce will need new skills to meet these demands. Organisations should be proactive in identifying green skills relevant to their sectors and consider partnering with training providers to upskill their employees accordingly.
Additionally, businesses with established environmental commitments may benefit from government grants for sustainability projects. Employers can use these developments to strengthen their organisation’s appeal among environmentally conscious job candidates and engage current employees in eco-friendly initiatives.
6. New Compliance Measures and Incentives
With a commitment to modernising compliance, the Government is increasing support for digital record-keeping and tax automation tools, especially for small and medium-sized enterprises (SMEs). This may mean adopting new technology platforms for HR and payroll that integrate with government systems for real-time reporting and compliance with payroll and tax legislation.
The Budget also introduced incentives for employee wellbeing, with new funds earmarked for mental health support in workplaces. This provides organisations with an opportunity to access grants for mental health initiatives, such as mental health first aid training and wellness programmes, which can improve productivity and retention while meeting growing employee expectations for mental health support.
Preparing for Change
The 2024 Budget offers employers both challenges and opportunities. From wage adjustments to support for skills development and inclusivity, there are numerous initiatives that will shape workplace practices in the coming years. To adapt effectively, organisations will need to:
- Evaluate pay structures to ensure compliance with new minimum wages while maintaining internal equity;
- Encourage upskilling through government-backed schemes, which can benefit retention and build a more resilient workforce;
- Prioritise diversity, equity, and inclusion (DEI) by capitalising on childcare support and flexible work initiatives;
- Foster an age-diverse workforce through re-training programmes and flexible work options;
- Advance sustainability by aligning recruitment and training practices with emerging green job requirements.
By proactively integrating these changes, organisations can strengthen their competitive edge, foster an inclusive workplace, and contribute to a more sustainable and skilled workforce.
If you would like help to ensure you are adapting to and optimising opportunities arising from the 2024 Budget, or if you have any other HR queries, please contact Jo Bradbury in our NQHR team, on 07570 372118.