How the National Insurance (NI) Increase is Shaping Our Hiring Strategy for 2025.

The recent changes to National Insurance contributions have brought about significant Adjustments for businesses across the UK. As we look ahead to 2025, it’s important to understand how these changes impact our hiring strategies

What’s Changing?

Starting from April 2025, the UK government will reduce the Secondary Threshold for secondary Class 1 NI contributions from £9,100 to £5,000 per year. Additionally, the secondary NI rate will increase from 13.8% to 15%. These changes mean that employers will start paying NI contributions sooner and at a higher rate.

The Impact on Hiring Strategy

While it may take around three months to train a new hire, this investment is often more efficient than leaving a role vacant for six months or more. During this training period, new employees can be moulded to fit the specific needs and culture of your organisation. This tailored approach ensures that they are not only skilled but also aligned with your company’s values and goals.

• Cost Management: With the increase in NI contributions, hiring new employees will become more expensive.

To manage these costs, we need to be more strategic about our hiring decisions. This might involve prioritising roles that are critical to our operations and finding ways to optimise our current workforce.

According to a survey conducted by CIPD, 32% of employers plan to reduce their employee headcount through redundancies or recruiting fewer workers.

• Focus on Efficiency: To offset the higher costs, we’ll focus on improving efficiency within our teams. This could mean investing in training and development to enhance the skills of our current employees, allowing them to take on more responsibilities and reduce the need for additional hires.

• Leveraging Technology: Embracing technology can help us streamline our processes and reduce the need for additional staff. Automation and AI tools can handle repetitive tasks, freeing up our employees to focus on more strategic work.

• Flexible Work Arrangements: Offering flexible work arrangements, such as remote work or part-time positions, can help us attract a wider pool of talent without the full financial burden of additional full-time employees. This approach can also improve employee satisfaction and retention.

• Enhanced Employer Branding: To attract top talent despite the increased costs, we’ll focus on strengthening our employer brand. Highlighting our company culture, values, and benefits will help us stand out to potential candidates.

Conclusion

The NI increase presents challenges, but it also offers an opportunity to rethink and refine our hiring strategies. By focusing on efficiency, leveraging technology, and enhancing our employer brand, we can navigate these changes and continue to attract and retain top talent in 2025.

For employers seeking to invest in high-performing engineers, navigating these NI changes strategically will be key to securing and retaining the best minds in the field. For top engineering candidates, now is the time to align with companies that are adapting and innovating to remain competitive.

Explore opportunities and connect with top-tier talent today.