​​In my final Talent Market Insight Report of 2024,  I discussed the options that businesses faced if they wanted to address the challenges of Rachel Reeves mini budget.

One solution being to squeeze costs to accommodate the additional ones being forced upon businesses through tax rises.

The other (which was obviously going to be our preferred approach), was for businesses to meet the challenges head on and seek to mitigate the costs through commercial growth.

Of course, our experiences only provide a snapshot of how the wider industry is responding, however, if our start to the year is indicative of how FMCG businesses are responding to economic challenges, they’ve clearly focused their efforts on the latter of these two options.

To put this into context, our WIP (total fee value of active roles we are working) is up 32% compared to where it was in the month immediately after the mini budget. Now of course this could be down to numerous factors, one of which could be that from a target-client point of view, the majority of businesses that work with us are very much of the forward-thinking, speculate-to-accumulate ilk.

What this could mean, for example, is that 90% of the market are tightening their belts and only 10% are looking to increase their topline… we just happen to be working with that 10%.

To try to unpick this further, we can look at where our business is coming from to assess whether it is from existing clients who we have already established are aligned with our strategic recruitment offering, and how many were from new businesses where there will ultimately be a higher level of attenuation as we work together to see if our process compliments their outlook.

What we actually saw was that in the quarter leading up to the budget, our split between existing clients/ new business was 62% / 38%, which was pretty reflective of the full year preceding that quarter.

What we witnessed after the budget was a fairly immediate shift which saw the final quarter of the year delivering a 76% / 24% split, and the first quarter of 2025 delivering 77% / 23%.

This ratio change can be attributed to two things; both a slight decrease in new business being placed compared to previous quarters, alongside a substantial increase in roles placed with existing clients (this growth being even more pronounced in the latest quarter of figures). This further reinforces the hypothesis that the wider market is stalling slightly but we are managing to buck the trend with our relationship-led approach.

This is only a working hypotheses and there are clearly many variables at play, but it suggests to me that businesses who invest in their people strategy are more agile when bumps in the road arise, and are more resilient to challenges in the wider economy.

If you’d like to chat to break this down further and discuss how we can support you in navigating the current economic challenges, don’t hesitate to get in touch.