For three decades, John Fletcher has placed executives in the City’s top firms. Now, in an unusually candid interview, he reveals what the British jobs market is really telling us: the recovery is patchy, wage inflation is sticky, and the government’s labour policies are a drag on productivity. Fletcher, who runs a boutique headhunting firm in Mayfair, argues that the official unemployment figures mask a deeper rot.
'The headline jobs numbers look robust, but dig into the details and you see a two-tier market,' he says. 'Top-end professionals are still in demand, but middle managers are being squeezed by automation and offshoring.' Fletcher notes that his clients are increasingly hiring on short-term contracts to avoid the new tax burdens introduced by the Autumn Budget.
'Employers are terrified of the new National Insurance hikes and employment rights reforms. They’d rather pay a premium for temporary staff than commit to permanent hires,' he explains. This, he warns, will fuel wage inflation in the short term but depress long-term investment in training.
The recruitment guru also points to a worrying trend in capital flight: 'High earners are leaving London for Dubai and Singapore. The cumulative effect of higher taxes, regulatory creep, and Brexit red tape is driving talent away.' He predicts that the Bank of England will struggle to tame inflation because the labour market is structurally tighter than the data suggest.
'The BoE looks at average weekly earnings, but those figures are distorted by high earners in finance. The real story is that small and medium enterprises are offering double-digit pay rises just to fill basic roles.' Fletcher’s advice for jobseekers is characteristically blunt: 'Upskill or get left behind.
The state won’t save you.' His revelations serve as a stark reminder that the UK’s employment market is a microcosm of its broader economic malaise: low productivity, high taxes, and a two-speed recovery. For investors, the key takeaway is simple: expect gilt yields to remain elevated as the market prices in higher labour costs and persistent inflation.
The bottom line? The jobs market is not as healthy as it appears, and the government’s fiscal plans are making it worse.
