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Britain is becoming a more “unattractive” place to hire people permanently as wage pressures and tax hikes push firms towards automation and offshoring, recruitment giant Hays has warned.

Staff meanwhile no longer value loyalty to their employer, the company said.

Hays, which is one of Europe’s biggest recruitment agencies, has recently been warning over weaknesses in the world’s jobs market.

But it said there were several specific challenges facing the UK that was making it a less competitive place for work.

Tom Way, its UK and Ireland chief executive, said: “The UK is a great place to work if you are an employee but it’s becoming more unattractive to hire people permanently.

“Wage pressures and national insurance changes are pushing employers to explore automation and offshoring.”

The national minimum wage rose in April, boosting pay for many workers but driving up labour costs for employers.

It came on top of many businesses having to increase their national insurance contributions as a result of tax changes outlined in last year’s budget.

Hays said the cost pressures have pushed companies to think about work where “humans are essential” and then digitalising or outsourcing the rest.

Mr Way also said that ongoing worries about the cost of living mean that workers are not as confident to move jobs and companies are reluctant to hire.

This is lengthening the time required to fill vacancies across all sectors, which the recruiter views as a key indicator of the market.

“Loyalty to your employer is no longer considered a valuable trait and people are eager to exercise control over their career, opting to deliver project-based work rather than commuting five days a week,” he said.

Accompanying research by Hays showed that the UK lags behind most of its peers in terms of benefiting from workforce investment, and how adaptable the labour market is to changing business needs.

Hays said UK employers need to embrace new workforce models that combine permanent, contract, and project-based roles, and invest in both its people and digital assets in order to stay competitive.