One-third of UK workers to look for new jobs across economy

As many employers ignore calls to raise wages amid the cost-of-living crisis, firms risk seeing an exodus of talent in the coming months. A new study suggests a third of workers in Britain are set to look for a new career elsewhere, in the hope of landing an inflation-proof salary.

The annual inflation rate in the UK increased to 9.4% in June of 2022 which is the highest rate since 1982 and slightly above market forecasts of 9.3%. As gas prices continue to surge, bleak predictions abound that this may double to 18.6% in the coming 12 months – deepening the cost-of-living crisis that is already leaving employees across Britain struggle to make ends meet at the supermarket, or to build for a dignified retirement.

Amid this, bosses across the country have remained steadfast in their policy of not increasing salaries to keep up with inflation. Half of UK SMEs have not offered any of their staff raises in line with inflation, while the majority of businesses have done so for well under 50% of their workforce. As such, a huge portion of UK consumers are currently watching their pay decrease dramatically in real terms – decreasing their spending power, and making the increasing the likelihood of a long, deep recession in Britain.

Frustrations at bosses failing to help out looks set to finally boil over, according to new research from KPMG. The Big Four firm has surveyed 1,500 members of the UK workforce, and found that 35% of respondents were planning on finding a new career in the next 12 months, due to the rising cost of living. This is four points higher than at the height of the Covid-19 pandemic in 2020.

According to KPMG, this presents a major opportunity for firms in the professional services and financial services spaces – which have been struggling to attract talent amid the great resignation. A 23% chunk of individuals looking to change career would consider working in professional services, and the same number would consider financial services – making them the joint most popular sectors.

Speaking on the opportunity this provides financial firms in particular, Karim Haji, Head of Financial Services at KPMG UK, said, “Given the rising cost of living and the broader economic uncertainty, it makes sense that many individuals will be considering their current roles, career choices and where they live and work. In the competition for talent, financial services firms should consider extending the scope of their search to include non-traditional pools of talent which can help boost diversity and inclusion. This could mean investing more in return-to-work, military transition, apprenticeships or school leaver programmes.”

Among 58% of those looking for a career in financial services, a higher salary and bonus expectations was the key for starting a new life there. Meanwhile, 43% hoped for a better work-life balance, 36% believed the topic sounded interesting, and 24% wanted more flexibility regarding working from home arrangements.

However, the situation is not only an opportunity for the financial sector – it is also a challenge. Financial services operators are far from immune to the trend of workers looking to trade up in the coming months – and 42% of those working there are looking to change career in the coming year. That is a minor two-point reduction from the 2020 lockdown months – but still represents a problem for financial services firms, who may be plagued with retention issues even as they bring in new hires.

Among financial services workers looking for a new career, 30% want improved salary and benefits, while 23% want more job security and 20% want more flexibility regarding working from home arrangements. In this case, Haji added that it was important firms did not take an oversimplistic view of what it takes to hang on to talent.

“Since the Covid-19 pandemic, many financial services firms have also made positive changes to their working practices, including dropping some of their more conservative employee policies in line with other sectors,” Haji concluded. “This will go some way in tackling outdated perceptions of the industry and help to attract a more diverse workforce.”