Business Activity in 2024: Interest Rates Take a Toll

Increased interest rates and access to funding were major challenges for business in 2024, with 59% of companies reporting a negative impact on business activity. With recent interest rate cuts, it will be interesting to see if these conditions improve in 2025.

Hybrid Work: More Days in the Office

Of the 66% of companies that offer hybrid work, only 41% specify the days in the office. However, we’re seeing a shift from employees being expected to be in the office from 3 days a week, to 4 or 5 days.

Salaries: Growth Slows but Outperforms Predictions

Salary increases are slowing, with the average salary increase down from 6.1% in 2024, to now 5.7%. Though, positively, this figure is still higher than the 4.7% salary increase companies predicted it would be.

Graduate Recruitment: A 13-Year Low

Only 56% of companies hired graduates in 2024, the lowest figure in the PACE Report’s 13-year history. This is indicative of a difficult year for businesses in 2024, where 58% of companies either held steady or reduced business activity.

Workforce Trends: Slight Shift Toward Downsizing

In 2024 we saw slightly more organisations reducing staff numbers (35%) than increasing staff numbers (34%). This is compared to 25% reducing and 45% increasing staff the previous year. 

Redundancies: A 316% Surge in Two Years

Redundancies are up 46% on last year with 3.8% of the total surveyed workforce having their positions made redundant in the 2024 calendar year. This is up from 2.6% in 2023 and 1.2% in 2022, marking a 316% increase over two years.

Temp Hiring: Steady but Low Demand

Only 17% of companies regularly hire temporary staff, a trend that has remained relatively stable in the post-COVID years. The only notable exception was in 2022, when there was a temporary surge in demand. Since then, businesses have continued to favour permanent hires over short-term solutions.

Why Employees Stay vs. Why They Leave

Salary, flexibility/work life balance, and office location have been the top reasons employees stay for two years running. However, in 2024, employers cited career advancement, salary, and leaving the industry as the main reasons for resignations.

AI Adoption: Rapid Growth 

Last year, 38% of companies said AI didn’t apply to their business — this has now dropped to 19%. Today, 75% regularly use AI, with an uptick in its application for technical tasks.

Business Activity in 2025: Cautious Optimism 

Looking ahead, 57% of companies expect business activity to increase in 2025, while only 14% predict a decline. Longer-term optimism is also strong, with 49% positive about the next two years and just 12% holding a pessimistic outlook.

If you’d like more insights from our 2025 PACE Report, you can download it  here, with 100% of proceeds going to our charity partner, Women’s Property Initiatives, to support them in their quest to provide permanent and affordable homes to women and children at risk of homelessness.