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How will inflation impact jobs in the finance sector?

Published 8th Dec 2022

There are few industries and sectors – both in the UK and globally – that haven’t been impacted by inflation in 2022. From a consumer perspective, the cost of products and services has risen exponentially, with food, energy and fuel prices rising to 11.1% higher in October 2022 than the previous year.

Inevitably, businesses all over the UK have also been impacted by inflation – and understandably, organisations that employ finance professionals have seen the effects that inflation can have on finance jobs.

So, as we head towards the end of the year, how will inflation impact jobs in the finance sector as we go into 2023?

The cost of labour

When inflation is high, every unit of currency buys less goods and services as a result. From this comes a domino effect, and many businesses find it difficult to maintain their profit margins, which then causes: 

  1. Overheads needing to be monitored more closely
  2. Recruitment for new roles slowing down, or being paused
  3. The cost being passed on to consumers in the form of higher prices
  4. Businesses alternatively absorbing the costs, which then puts a strain on profits
  5. The cost of labour being reviewed

Businesses employing finance professionals therefore have a choice to make when it comes to the cost of their existing workforce. 

On one hand, ensuring your business runs smoothly and finances are monitored effectively is the responsibility of your finance department. For this reason, retaining your employees is extremely important, and if inflation has had a detrimental effect on your business overall, there may be a need to make adjustments in other areas in order to maintain the smooth running of your finance team. Monitoring the cost of labour is something that organisations will need to assess from all angles.

On the other hand, inflation may call for businesses to recruit more finance professionals in order to monitor and manage the impacts inflation is having on company funds. For this reason, the impact inflation is having on the finance sector isn’t all negative.

Ongoing recruitment in the finance sector

Despite a number of organisations tightening their purse strings in order to stay afloat as inflation increases, many businesses are also in a position to invest in their finance team in order to monitor profit margins.

Job vacancies in the UK finance sector, despite being impacted throughout the course of 2022, are still improving in comparison to 2021. The Office of National Statistics released data in November 2022 stating that vacancy rates in the UK finance sector were at 5% this year, in comparison to 3% last year (vacancy rates in this dataset were calculated as the number of vacancies per 100 jobs).

This demonstrates that despite inflation taking hold of our current economy, and numerous other factors contributing to a slowdown in business growth, organisations employing and recruiting finance professionals are still forging ahead. 

Finance jobs are a necessity

Although circumstances differ from business to business, the overall finance sector will continue to thrive given that without finance professionals in both public and private sector roles, our economy would come to a standstill.

As organisations continue to navigate the uncertainty that inflation brings, one thing professionals can be sure of is that jobs will always be available. Despite fluctuations in the number of vacancies, and recruitment efforts being scaled back by some and increased by others, the knowledge and expertise of those working in the finance sector will continue to be in demand.

Get in touch

Are you looking for jobs in the finance sector, or is your organisation recruiting new team members in your finance department? McCarthy Recruitment can help – get in touch with us to find out more.

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