Recruitment Market Update 2025:
Forecasted Trends and Growth - November
Pockets of welcome positive news for the employment market, following the Chancellor’s Autumn 2025 Budget announcement this week.
The government plans to raise the wage floor with the National Living Wage / minimum wage being increased, meaning many low-paid workers could see a boost in earnings. This action will help reduce in-work poverty and improve the take-home pay for large numbers of people, especially younger workers and those in lower-paid jobs.
The framing of the Budget suggests the government is aiming to “make the economy work better for working people,” implying a potential focus on job quality, support for workers, and structural reforms that could benefit the employment market over time.
Temporary placements expanded slightly for the first time since June 2024 (light green line), while the downturn in permanent placements eased for the fourth straight month. See chart below:
Stats at a Glance:
Recruitment Market Update 2025 - November
- The UK employment rate is standing at 75.0%. This is down on the last quarter, but above estimates of a year ago.
- The UK unemployment rate is standing at 5.0%. Above estimates from a year ago, and up on the latest quarter.
- The UK economic inactivity rate now stands at 21.0%. Largely unchanged on the last quarter, but below estimates of a year ago.
- Estimated vacancies stand at 723,000, a small increase (0.2%) in the period August to October 2025.
- Annual growth in total earnings (excluding bonuses) was 4.6% in June to September 2025. Annual growth in employees’ average regular earnings (including bonuses) was 4.8%.
- Payrolled employees fell by 117,000 (0.4%) between September 2024 and September 2025, and decreased by 32,000 (0.1%) between August and September 2025.
- Early estimates of payrolled employees for October 2025 decreased by 32,000 (0.1%) on the month, to 30.3 million and decreased by 180,000 (0.6%) on the year.
- There were 39,000 working days lost due to labour disputes across the UK in September 2025.
Stats by Region:
Recruitment Market Update 2025 - November
In July to September 2025, the highest employment rate in the UK was in the South West (79.5%). The lowest was in the North East (69.0%).
The highest unemployment rate was in London (6.5%) and the lowest was in Northern Ireland (2.4%).
The highest economic inactivity rate was in the Northern Ireland (26.8%) and the lowest was in the South West (17.7%).
Comparing September with last year, the number of payrolled employees decreased for all regions. Except for Northern Ireland, where it has increased by 1.0%.
Topical Data - Barriers preventing employers increasing their hiring
The REC surveyed employers asking what are the barriers preventing them from hiring.
Six in ten (61%) employers in the UK are actively or considering hiring. Yet, the majority of these employers (88%) are facing at least one barrier that is making hiring challenging.
Comments from Industry Expert:
Commenting on the latest employment market: Jon Holt, Group Chief Executive and UK Senior Partner KPMG, said:
“Economic uncertainty continues to weigh heavy on business, but further stabilisation in the jobs market last month indicates that a Budget that builds business confidence, could be a catalyst for renewed hiring.
“We know from our recent CEO Outlook that chief execs remain upbeat about their growth prospects, and the rise in temporary hiring indicates that opportunities are increasing – there just aren’t enough strong signals currently for bosses to commit to building their workforce on a more permanent basis. As we expect both interest rates and inflation to fall further in 2026, we may finally see hiring start to grow more steadily.”
Key November Market Takeaways:
Hiring activity continues to be subdued with employers remaining cautious about long term/permanent hires. However, temporary/contract roles are relatively more active now.
Competitive advantage will likely come from flexibility: offering flexible work arrangements, focusing on niche skills, or building talent pipelines for high-demand sectors.
Upskilling and adaptability count. As AI and automation reshape roles, demand shifts towards people with specialist skills, flexibility and adaptability.
Recruitment Market Update 2025:
Forecasted Trends and Growth - October
After the traditional summer slowdown, the UK job market made a confident comeback in September, signalling renewed optimism from employers and continued resilience across the labour market.
This is reflected in the number of new job postings that rose sharply to 742,967, marking an 11.3% increase from August 2025, as businesses reactivated their hiring plans post-summer.
The momentum was also reflected in the total number of active job postings, which climbed to 1,638,924, up 10.6% from the previous month. Encouragingly, this figure also represents a 5.5% rise compared with September 2024, highlighting the UK’s steady progress toward a more stable hiring landscape.
While last year’s September data painted a quieter picture—with a 9.6% dip in active postings compared to August 2024—this year’s growth signals renewed business confidence and a more consistent rhythm in hiring.
Stats at a Glance:
Recruitment Market Update 2025 - October
- The UK employment rate is standing at 75.1%. This is down on the last quarter, but above estimates of a year ago.
- The UK unemployment rate is standing at 4.8%. Above estimates from a year ago, and up on the latest quarter.
- The UK economic inactivity rate now stands at 21.0%. Largely unchanged on the last quarter.
- Estimated vacancies stand at 717,000 in the period July to September 2025.
- Annual growth in total earnings (excluding bonuses) was 4.7% in June to August 2025. Annual growth in employees’ average regular earnings (including bonuses) was 5.0%.
- Payrolled employees fell by 93,000 (0.3%) between August 2024 and August 2025, but increased by 10,000 (0.0%) between July and August 2025.
- Early estimates of payrolled employees for September 2025 decreased by 10,000 on the month and decreased by 100,000 (0.3%) on the year to 30.3 million.
- There were 15,000 working days lost due to labour disputes across the UK in August 2025.
Stats by Region:
Recruitment Market Update 2025 - October
In June to August 2025, the highest employment rate in the UK was in the South West (79.5%). The lowest was in the North East (68.8%).
The highest unemployment rate was in the West Midlands (6.2%) and the lowest was in Northern Ireland (2.6%).
The highest economic inactivity rate was in the North East (26.9%) and the lowest was in the South West (17.5%).
Comparing September with last year, the number of payrolled employees decreased for all regions. Except for Northern Ireland, where it has increased by 1.0%.
Topical Data I - Statutory Sick Pay (SSP) Upcoming Changes under the Employment Rights Bill - October
The Employment Rights Bill (ERB), which is currently in the final stages of parliamentary process, introduces significant changes to SSP designed to increase access and fairness. The Bill is expected to receive Royal Assent any day now. Following this, we are expecting consultations to be launched, one of which should cover the changes to SSP.
The measures proposed in the Bill include:
- Removal of the Lower Earnings Limit, making SSP available to all employees regardless of income.
- Revised payment structure, so that SSP is paid at 80% of an employee’s weekly earnings or £118.75 per week, whichever is lower.
- Abolition of the ‘waiting days’ rule, meaning employees will be entitled to SSP from day one of absence, rather than the fourth.
- Transfer of enforcement responsibility to the Fair Work Agency, which will oversee SSP enforcement and dispute resolution and should be in place from April 2026. The FWA will have the power to recover underpayments of SSP as well as their costs in taking enforcement action.
Recommendations for Employers to Prepare for SSP Changes:
- Businesses should incorporate the changes into their strategic plans and budgets, preparing to implement the necessary updates to their payroll systems, to ensure that the correct rate of SSP is paid to all eligible employees, and to ensure that employees are paid SSP when they should be.
- While not required by law, many employers offer enhanced or occupational sick pay schemes. Employers should review these arrangements to ensure they align with the revised statutory framework and consider whether any contractual terms need updating to reflect the new SSP rules.
- Employers should review, and if necessary, amend, their sickness/absence policies to ensure that they align and are compliant with the new law.
Topical Data II - Real Living Wage Increases
The Living Wage Foundation has announced the Real Living Wage rates for 2025-2026. The Real Living Wage is the only UK wage rate based on the true cost of living. It is independently calculated each year to reflect what people need for a decent standard of life. This includes everyday costs such as rent, food, transport, and household bills.
New figures to be implemented by 1st May April 2026, as below:
Comments from Industry Expert:
Commenting on upcoming Autumn UK Budget on 26th November 2025, Neil Carberry, REC Chief Executive, said:
“Businesses are the heart of driving investment and growth. They need a Budget that backs them, not more burdens that slow them down, and with it the path to recovery in our economy and the public finances. This Autumn Budget is a chance to restore confidence, unlock investment and deliver opportunities through a focus on making the most of the opportunities we have.
“There is clear potential in the economy that is not being realised. Consumers are holding cash and firms are optimistic they can deliver, yet this is not translating into hiring or investment while they wait out what government does next. The Autumn Budget can turn confidence into action with bold action that focuses on unlocking potential through delivering on skills reform, supporting business investment and reforming the approach to the Employment Rights Bill, which will slow down growth.
“The government also needs to be data rather than ideology led when it comes to the public sector workforce. The Department of Health and Social Care needs to work with healthcare staffing agencies to reform an approach which is now increasing risks and costs to trusts. Blaming agencies has run its course – we can now see that the NHS was more efficient when it adopted the best and most cost-effective solutions to meeting patient needs, rather than setting out to ban agency workers for ideological reasons that do not make practical sense. Winter is coming and agency staff are the backbone of meeting peak demands on the system.”
Key October Market Takeaways:
Offer hybrid/flexible working and a compelling Employee Value Proposition (EVP). With highly skilled candidates having more options and employers less likely to rely solely on salary, the overall offer – flexibility+culture+growth – becomes a deal breaker.
Time-to-hire and process efficiency matter. As some hiring is delayed, clients who streamline their processes may gain an edge in securing talent when demand picks up.
The business-support market is shifting from reactive, speedy hiring to more selective, strategic hiring. Companies are focusing on quality and fit instead.
Recruitment Market Update 2025:
Forecasted Trends and Growth - September
Despite recent headlines about cooling or uncertainty, there is some good news and silver linings in the UK employment market at the moment.
Regular pay (excluding bonuses) is still rising year-on-year. Wages are still positive, although modest, and regular pay is up by 0.7% in real terms. This means that for many workers, earnings are still outpacing inflation, even if only by a small margin.
There is a strong increase in ‘green jobs’ postings, rising by 9%. Sectors tied to net-zero, renewable energy and sustainable infrastructure are seeing increased demand. This suggests opportunities for those with or who are developing the relevant applicable skills.
Some reports are pointing to ‘first signs of stability’ in hiring in certain sectors or areas. Even though many sectors are contracting or hiring less, recruitment activity in a few pockets is holding up.
Also, junior-level hiring has begun to pick up in certain areas and sectors. This activity suggests that employers are cautiously moving from freeze/delay to selective hiring.
Stats at a Glance:
Recruitment Market Update 2025 - September
- The UK employment rate is standing at 75.2%. Above estimates of a year ago, and up on the quarter.
- The UK unemployment rate is standing at 4.7%. Above estimates from a year ago, and up on the latest quarter.
- The UK economic inactivity rate now stands at 21.1%. Below estimates from a year ago, and down on the last quarter.
- Estimated vacancies fell by 10,000 on the quarter to 728,000 in June to August 2025. This is the 38th consecutive period where vacancy numbers have dropped.
- Annual growth in total earnings (excluding bonuses) was 4.8% in May to July 2025. Annual growth in employees’ average regular earnings (including bonuses) was 4.7%.
- Payrolled employees fell by 142,000 (0.5%) between July 2024 and July 2025 and fell by 6,000 (0.0%) between June and July 2025.
- Early estimates of payrolled employees for August 2025 decreased by 8,000 on the month and decreased by 127,000 (0.4%) on the year to 30.3 million.
- There were 83,000 working days lost due to labour disputes across the UK in July 2025.
Stats by Region:
Recruitment Market Update 2025 - September
In May to July 2025, the highest employment rate in the UK was in the South West (80.0%). The lowest was in the North East (68.3%).
The highest unemployment rate was in the West Midlands (6.0%) and the lowest was in Northern Ireland (2.2%).
The highest economic inactivity rate was in the North East (27.9%) and the lowest was in the South West (17.2%).
Comparing August with last year, the number of payrolled employees decreased for all regions. Except for Northern Ireland, where it has increased by 0.4%.
Topical Data - CIPD Labour Market Outlook - September
August sees the latest Labour Market Outlook report released by the CIPD, produced four times a year in February, May, August and November. The reports provide analysis on employers’ recruitment, redundancy and pay intentions, combined with unique insights on labour market topics. Highly respected within the employment industry; we’ve summarised a few key points here:
- April’s NI changes have raised costs for 84% of employers, with a third (32%) seeing a large rise. Lower-paying industries and those employing young workers have been hardest hit. NI changes are reported as the largest cost pressure by employers over the last 12 months.
- Median basic pay awards hold at 3% across the public and private sectors for the fifth consecutive quarter.
- Public sector employers expect staff numbers to decrease, rather than increase over the next three months.
Click here for the full report: CIPD Labour Market Report Summer 2025
CIPD Current Market Recommendations:
- Keep workloads manageable amid reduced recruitment.
- Invest in young people as a long-term workforce strategy.
- Strengthen recruitment strategies to overcome hard-to-fill roles.
- Review workforce plans in light of immigration changes.
- Retain key talent through skills and career development.
Comments from Industry Expert:
Commenting on the latest ONS figures, Neil Carberry, REC Chief Executive, said:
“A slower labour market in the early summer is no surprise – it reflects what business surveys have been telling us. Firms were struggling with low growth and rising employment costs from National Insurance to National Minimum Wage to energy, and from fears about the Employment Rights Bill. But the picture has steadied, and our members report a slightly brighter outlook for the rest of the year after a longer and tougher hiring summer slowdown than usual.
Private sector wages are normalising, with upward pressure now driven by government choices on public sector pay and the National Minimum Wage. This is significant, given the impact of these figures on the costly Pensions Triple Lock next year.
With more recent business surveys a little more positive than the early summer, employers want to see government back them to deliver growth. That means a Budget without the nasty cost surprises of last year and far greater pragmatism on the delivery of their employment agenda. That would give firms the confidence to shift gears and help labour market momentum to build.”
Key September Market Takeaways:
The Employment Rights Bill is in its final stages in Parliament. Currently the House of Lords is considering amendments from the Commons. Royal Assent can then follow. The roadmap for implementation has scheduled reforms from late 2026/early 2027.
Evidence has identified that job applications are increasing, even as vacancies fall. However, many candidates are not meeting the required skill level or company expectations. This mismatch is creating inefficiency and delays.
Job specific skills gaps are evident. Especially in skilled trades, sustainability, AI, net zero roles, digital technology and problem solving.
Recruitment Market Update 2025:
Forecasted Trends and Growth - August
Hiring activity slowed at the start of the third quarter, with both permanent and temporary placements easing. Employers remain cautious about adding headcount amid budget pressures, keeping the overall picture restrained.
The Bank of England’s rate cut to 4% may help ease costs and give some confidence to hire, though it’s more likely to steady the market than trigger a sharp rebound.
Candidate availability rose further, driven by more jobseekers and workforce restructuring. Starting salaries are still inching up but at the slowest pace in years, while temp pay growth stayed modest.
Demand for staff also softened, with vacancies declining more quickly, particularly for permanent roles. Still, specialist skills remain in demand, keeping competition for top talent alive despite the slowdown.
Stats at a Glance:
Recruitment Market Update 2025 -August
- Permanent placements fell across all four monitored English regions in July. The steepest reduction was seen in the South of England.
- The UK employment rate was estimated at 75.3% in April to June 2025. This is above estimates of a year ago, and up in the latest quarter.
- The UK economic inactivity rate now stands 21.0% in April to June 2025. This is below estimates of a year ago, and down in the latest quarter.
- The estimated number of vacancies in the UK fell by 44,000 (5.8%) on the quarter, to 718,000, in May to July 2025.
- Annual growth in employees’ average earnings in Great Britain for regular earnings (excluding bonuses) was 5.0% and for total earnings (including bonuses) was 4.6%, in April to June 2025.
- Estimates for payrolled employees in the UK fell by 149,000 (0.5%) between June 2024 and June 2025, and by 26,000 (0.1%) between May 2025 and June 2025.
- There were an estimated 38,000 working days lost because of labour disputes across the UK in June 2025.
Stats by Region:
Recruitment Market Update 2025 - August
Between April and June 2025 the highest employment rate in the UK was in the South West (80.2%). The lowest was in the North East (68.2%)
The highest unemployment rate was in London (6.0%) and the lowest was in Northern Ireland (2.4%)
The highest economic inactivity rate was in the North East (28.2%) and the lowest was in the South West (17.0%)
Comparing July with last year, the number of payrolled employees has decreased for all regions and countries of the UK. Apart for Northern Ireland where it has increased by 0.7%
Topical Data - Flexible and hybrid working practices in 2025 - August
The CIPD has released the results of a survey exploring the current state of flexible and hybrid working practices from both an employer and employee perspective.
Among the key findings:
- 3% of employees say they have left a job in the last year (since January 2024). This is due to a lack of flexible working.
- The vast majority of organisations (91%) offer some kind of arrangement, with the most common on offer being: – working from home/remotely on a regular or ad hoc basis (58%) – part-time hours (55%) – informal flexibility (43%)
- 61% of organisations believe it is important to provide flexible working as an option when advertising jobs
- Overall, 14% of all employers that allow hybrid working are planning to either introduce or increase the number of mandatory days in the workplace over the next 12 months
- More than half of employees believe there is either a great deal (23%) or a fair amount (30%) of pressure for employees to spend more time in the physical workplace, while 39% say there is no pressure or not very much.
- Eighty per cent of employees say that working flexibly has had a positive impact on their quality of life; just 4% say it has had a negative impact.
Comments from Industry Expert:
Commenting on the latest KPMG and REC UK Report on Jobs survey, Kate Shoesmith, REC Deputy Chief Executive, said:
“There is a path to jobs market recovery – but it will take co-ordinated action from Government, the Bank of England and business to maximise on any potential upswing.
“With starting salaries and temp pay rising only modestly, it was right to cut interest rates last week. More action like this, to stabilise the business cost-base, is what will support growth and boost the jobs market this year. That is what the Chancellor should be keeping firmly in mind when preparing this year’s Autumn Budget.
“Fluctuations in permanent and temporary job placements signal a labour market that remains resilient but uneven. Construction, a key economic bellwether, has seen a rise in temp vacancies, an early sign of confidence returning. Demand for blue-collar temp roles and permanent engineering jobs also remains steady, offering another glimmer of optimism.
“At the same time, hiring in retail and hospitality are down. Employers in these sectors are pausing due to cost pressures and uncertainty around employment law, although when the turn comes, these industries typically rebound quickly.
“Meanwhile, widespread skills shortages remain, which indicates the need for urgent support from government to upskill and retrain people; while businesses need to act now to secure the talent they will require when hiring picks up later this year, as our separate employer sentiment surveys suggest it will.”
Recruitment Market Update 2025:
Forecasted Trends and Growth - July
A small burst of UK hiring starts saw the number of new job postings rise to 757,594 in June, up by 6.2% on the previous month. This is behind the number measured a year ago, but some regions including London and the South East are showing higher numbers than last year. The overall number of active job postings in June was 1,485,542, also an increase of 4.5% on the number of job postings in May.
As we hit the half-year point, the employment market is indicating stability, rather than expansion. Market guidance indicates that those companies who stay adaptive, data-driven and human-centred will be better placed when market confidence fully returns.
Stats at a Glance:
Recruitment Market Update 2025
- The UK employment rate is standing at 75.2%. Above estimates of a year ago, and up on the quarter.
- The UK unemployment rate is standing at 4.7%. Above estimates from a year ago, and up on the latest quarter.
- The UK economic inactivity rate now stands at 21%. Below estimates from a year ago, and down on the last quarter.
- Estimated vacancies fell by 56,000 on the quarter to 727,000 in April to June 2025.
- Annual growth in total earnings (excluding bonuses) was 5.0% in March to May 2025. Annual growth in employees’ average regular earnings (including bonuses) was also 5.0%.
- Payrolled employees fell by 135,000 (0.4%) between May 2024 and May 2025 and fell by 25,000 (0.1%) between April and May 2025.
- Early estimates of payrolled employees for June 2025 decreased by 41,000 (0.1%) on the month and decreased by 178,000 (0.6%) on the year to 30.3 million.
- There were 37,000 working days lost due to labour disputes across the UK in May 2025.
Stats by Region:
Recruitment Market Update 2025
Topical Data - CIPD Good Work Index
Issued this month – the CIPD Good Work Index is an annual benchmark of job quality in the UK.
Each year, CIPD surveys more than 5,000 workers from different sectors and occupations about key aspects of their work and employment. The resulting data and our analysis provide evidence-based insights for people professionals, employers and policy-makers to improve work and working lives.
Now in its 8th year, the report gives an overview of how employees view aspects of their work and what factors most influence whether their experience is positive or negative. Crucially, it highlights significant associations between those factors and outcomes such as reported performance, engagement, discretionary effort, health and intention to quit.
A few key findings:
- Better pay satisfaction correlates with better reported performance, improved mental health and lower likelihood of quitting.
- Most staff are satisfied with their job, irrespective of their contract type.
- 80% of those who have formal flexible working arrangements say it has a positive impact on their quality of life.
- 16% of staff have had job tasks automated by AL. 85% of those say this has improved their performance.
- Employee ratings of line managers have improved since 2023, particularly around their support for L&D and openness on issues like mental health.
- Excessive workloads, stress and exhaustion correlate with poorer mental health and physical health. Poor relationships with colleagues and line managers are also likely to influence health issues.
In March to May 2025, the highest employment rate in the UK was in the South West (80.5%). The lowest was in the North East (68.5%).
The highest unemployment rate was in London (6.2%) and the lowest was in Northern Ireland (2.1%).
The highest economic inactivity rate was in the North East (28.3%) and the lowest was in the South West (16.8%).
Comparing June with last year, the number of payrolled employees decreased for all regions. Except for Northern Ireland, where it has increased by 0.5%.
Topical Data - Employment Rights Bill
The government has given clear guidance on the Employment Rights Bill rollout. They’re taking a step-by-step approach because businesses were worried about too many changes at once. The staggered timeline runs from April 2026 through to 2027, giving employers crucial time to adapt their practices.
This month sees movement within the phased implementation timelines – for the full update, please click: Employment Rights Bill Roadmap: The Complete Guide for Hiring Managers
Comments from Industry Expert:
Commenting on the latest data, Neil Carberry, REC Chief Executive, said:
“As businesses adjust to higher National Insurance and react to growing demand, even at an anaemic level, they are returning to hiring in a steady but unspectacular way. London is more buoyant this year than last, which is often a leading indicator of a better trend for the whole country. The key to the labour market now is the same as it is for the wider economy: confidence. We need to see delivery on the new Industrial Strategy and planning reforms, pragmatism and caution on the raft of new employer costs that are being proposed by Ministers, and a “no surprises” Budget that avoids the tax hikes on jobs that we saw last year.
“In the education sector, primary and secondary schools typically do most of their recruitment in late spring and summer to prepare for the September term. But the government’s education recruitment policies need to deliver real results given there are still more than 40,000 unfilled teaching vacancies across these schools.”
Key July Job Market Takeaways:
53% of employers had trouble recruiting suitable candidates in the past year. The most cited barrier was lack of required technical skills, followed by mismatched attitudes or motivation.
58% of employers are finding it harder to hire mid-level talent compared to three years ago.
21% of leaders struggle with sourcing the right questions and volume of right applicants during interviews.
27% of employers experienced candidates ghosting on their first day and 41% saw new hires resign within their first 12 weeks.
Please note that the above Market Update 2025 data may be subject to statistical revisions over time.
Recruitment Market Update 2025:
Forecasted Trends and Growth - June
Responding to increases in ENI, combined with employment legislation changes, areas of the labour market are showing signs of cooling.
Despite this, wage growth is remaining healthy at just over 5%, although slowing. Also the number of new job postings increased to 726,084, rising by 0.3% on April 2025. Active job postings remain above 1.4 million at 1,440,792; a decrease from April as older adverts roll off websites.
To combat policy changes affecting hiring activity, the government has responded with industrial strategy support. This 10-year strategy provides strong focus on supporting high-growth sectors, skills development and cost competitiveness.
The Bank of England is responding by pausing rate hikes and preparing to cut rates, while businesses adapt to a more cautious hiring environment.
Stats at a Glance:
Recruitment Market Update 2025
- When comparing regions, Scotland (9.2%) and the South West (4.7%) saw the highest levels of increase in the total number of job postings.
- The UK employment rate is standing at 75.1%. Above estimates of a year ago, and up on the quarter.
- The UK unemployment rate is standing at 4.6%. Above estimates from a year ago, and up on the latest quarter.
- The UK economic inactivity rate now stands at 21.3%. Below estimates from a year ago, and down on the last quarter.
- Estimated vacancies fell by 63,000 on the quarter to 736,000 in March to May 2025. Vacancies were 59,000 below their January to March 2020 level.
- Annual growth in total earnings (excluding bonuses) was 5.2% in February to April 2025. Annual growth in employees’ average regular earnings (including bonuses) was 5.3%.
- Payrolled employees fell by 55,000 (0.2%) between March and April 2025 and fell by 115,000 (0.4%) between April 2024 and April 2025.
- Early estimates of payrolled employees for May 2025 decreased by 109,000 (0.4%) on the month and decreased by 274,000 (0.9%) on the year to 30.2 million.
- There were 47,000 working days lost due to labour disputes across the UK in April 2025.
Stats by Region:
Recruitment Market Update 2025
In February to April 2025, the highest employment rate in the UK was in the South West (80.0%). The lowest was in the North East (68.2%).
The highest unemployment rate was in London (6.4%) and the lowest was in Northern Ireland (1.8%).
The highest economic inactivity rate was in the North East (28.1%) and the lowest was in the South West (17.2%).
Comparing April with last year, the number of payrolled employees decreased for all regions. Except for Northern Ireland, where it has increased by 0.8%.
Topical Data - The effects of heightened employment costs:
The REC surveyed employers asking:
What was your biggest challenge in Q1 2025 in attracting and retaining talent?
and
What do you see as your biggest challenges in the next 6-9 months in attracting and retaining talent?
Comments from Industry Expert:
Commenting on the latest data, Neil Carberry, REC Chief Executive, said:
“This month’s postings data reflects both anecdote from recruiters and the core ONS workforce jobs survey – that the labour market is more stuck than going backwards. Despite the headwinds of tax rises and lower growth there seems to be some resilience. After a long jobs market slowdown, a second month of weak growth in new postings is a sign more of hope than concern.
While the global growth picture is weaker than anyone would like, the UK is relatively well-positioned to take advantage of what opportunities there are. We are past the interest rate peak, the UK looks good value by comparison to the US, has banked progress on trade deals and has a stable legal and political picture for the next few years.
With interest rates staying steady and a possibility of reductions later this year, the challenge now is to build business confidence to invest. That is why it is crucial that this month’s announcements on infrastructure and the industrial strategy set a clear plan for growth that companies can get behind, and that there are no more nasty business tax surprises. You can’t tax and regulate your way to prosperity – it takes business growth. And getting our workforce policy right – as an economic essential, not just a rights issue – will be vital. With a troubling Employment Rights Bill, a big jobs tax increase and anti-business language about agency workers in some parts of government – there is a lot to change to get us there.
Scotland and the South West of England are particularly notable in today’s numbers, with job listings rising in these regions, likely reflecting growing demand as we move into the summer tourist season. Although early trends suggest some market shifts, we cannot yet draw firm conclusions about summer hiring. The coming weeks will play a crucial role in shaping the full picture, and yes, the good weather will help.”
Key Takeaways:
Finding candidates with the right skillset is still the top challenge.
Hiring budgets are under pressure.
Poor-quality applications and slow processes are hindering hiring efficiency.
AI is widely adopted, but confidence and skill readiness lag behind.
Many companies are focusing on reskilling, DE&I efforts, and flexible culture to attract and retain talent.
Sectors facing strain – construction, engineering, logistics, hospitality and retail.
Please note that the above Market Update 2025 data may be subject to statistical revisions over time.
Recruitment Market Update 2025:
Forecasted Trends and Growth - May
There are signs in the latest recruitment market data that London may well be leading a recovery with new and total job postings increasing for the second month in a row.
In April, there were 729,029 new job postings across the UK, a slight increase of 0.4% on March 2025.
However, overall active job postings dropped by 4.8%, suggesting that roles are being filled or withdrawn faster. But here’s the standout: London actually bucked this trend, with a 1.7% increase in total job postings. This is important, because London is often the leading indicator of wider market shifts for the rest of the UK. If this momentum continues, it could signal the start of a broader recovery, one we will be tracking closely.
Stats at a Glance:
Recruitment Market Update 2025
- Total active job postings remain above 1.4 million. When comparing regions, London (1.7%) and the South West (0.8%) were the only regions that had an increase in the total number of job postings.
- The UK employment rate is standing at 75.0%. Above estimates of a year ago, but largely unchanged on the quarter.
- The UK unemployment rate is standing at 4.5%. Above estimates from a year ago, and up on the latest quarter.
- The UK economic inactivity rate now stands at 21.4%. Below estimates from a year ago, and down on the last quarter.
- Estimated vacancies fell by 42,000 on the quarter to 761,000 in February to April 2025. Vacancies were 34,000 below their January to March 2020 level.
- Annual growth in total earnings (excluding bonuses) was 5.6% in January to March 2025. Annual growth in employees’ average regular earnings (including bonuses) was 5.5%.
- Payrolled employees fell by 53,000 over the quarter, and fell by 4,000 over the year, when looking at January to March 2025.
- Between March 2024 and March 2025, payrolled employees decreased by 63,000.
- There were 55,000 working days lost due to labour disputes across the UK in March 2025.
- Permanent staff appointments fell for the 29th month in a row, amid reports that organisations have pared back hiring plans. This is due to a weaker economic outlook and increased payroll costs. Though sharp, the latest drop in placements was the softest since last October.
Stats by Region:
Recruitment Market Update 2025
In January 2025 to March 2025, the highest employment rate in the UK was in the South West (79.9%) and the lowest was in the North East (68.0%).
The highest unemployment rate was in London (6.2%) and the lowest was in Northern Ireland (1.6%).
The highest economic inactivity rate was in the North East (28.4%) and the lowest was in the South West (17.3%).
Comparing April with last year, the number of payrolled employees decreased for all regions, except for Northern Ireland, where it has increased to 1.1%.
Over the long term average weekly earnings for both total and regular pay showed a steady increase:
Topical Data - UK employers to review sex-based policies to ensure compliance
On 16th April 2025, the Supreme Court returned the ruling that the Equality Act’s definition of a woman is based on biological sex. CIPD states that UK employers need to review sex-based policies and practises to ensure compliance with the new ruling. The national equality and human rights regulator is working at pace to update its statutory and non-statutory guidance. This is to help employers understand their duties under the Equality Act and put them into practice.
The interim update from the EHRC outlines that under the Equality Act:
In workplaces, it is compulsory to provide single-sex toilets, as well as sufficient single-sex changing and washing facilities, where these facilities are needed.
In workplaces that are open to the public – trans women should not be permitted to use the women’s facilities and trans men should not be permitted to use the men’s facilities.
Where facilities are available to both males and females, trans people should not be put in a position where there are no facilities for them to use.
The EHRC is aiming to provide the updated Code of Practice to the UK Government by the end of June 2025. This will then be reviewed by ministers for approval.
CIPD Recommendations
- Audit relevant HR and EDI policies to ensure language reflects the legal definition of sex.
- Track employee feedback, complaints, or HR casework to identify where policy or practice may need adjustment.
- Update training content to explain the clarified legal definitions of “sex” and “gender reassignment” under the Equality Act.
- Equip managers to handle sensitive conversations with empathy, and provide practical case studies on lawful, respectful inclusion.
- Reinforce confidential support mechanisms for all employees (eg dedicated contacts in HR, EAP access, or peer support networks).
- Compose clear, inclusive messages to all staff explaining the ruling, its impact, and the organisation’s ongoing commitment to inclusion and respect for all identities, beliefs and views.
- Promote a workplace culture that ensures that debate does not become discrimination.
- Engage with employment lawyers to ensure compliance with the ruling, especially when navigating any complex occupational requirements or single-sex provision.
- Evidence and document decision-making processes clearly and objectively when exclusions or distinctions are made.
For the full CIPD Briefing click: EHRC Interim update on Supreme Court ruling on definition of “sex”.
Topical Data - Employment Rights Bill
The Government’s Employment Rights Bill aims to improve workers’ rights in a range of areas including: improving job protection from day 1, introducing rights to guaranteed hours, and improving access to statutory sick pay.
The REC surveyed employers asking: How do you think this will affect your future decisions about hiring young people aged 16-25?
For a reminder of proposed legal updates for 2025 click: Legal Updates for Employment 2025.
Comments from Industry Expert
Commenting on the latest data, Neil Carberry, REC Chief Executive, said:
“The British labour market is resilient, but facing some strong headwinds this year from cost inflation and the impact of government policies like the National Insurance rise. These figures show that there is underlying demand, however.
Getting confidence to hire and invest going is what matters most – and firms will be looking to government decisions that make growth easier, unlike the effect of last year’s Budget. Many firms report that fear of the Employment Rights Bill is holding up investment – one quick win for government is to reassure firms that application of the Bill will be staged, and done in a practical way that avoids tying businesses and workers up in the costs and complexity of the tribunal system. Real reform to the Bill is needed to achieve this.
The dip in active job postings shows that employers are still cautious, but the slight rise in new postings suggests that hiring plans are still on the table. The resilience seen in London and the South West is a positive sign, as London in particular is often the leading indicator of change in our jobs market.”
Please note that the above Market Update 2025 data may be subject to statistical revisions over time.
Recruitment Market Update 2025:
Forecasted Trends and Growth - April
Better news for the employment market as the overall number of active job postings for March 2025 was 1,583,465 – an unexpected increase of 2.3% on the number of job postings in February.
The number of new job postings in the UK was 749,311, up by 10.3% on February and returning the trend to January levels.
The stabilising of the jobs market in March will no doubt be challenged by rising costs of employment seen this month in the form of Employer’s National Insurance Contributions, as well as the increase in the National Minimum Wage. Hope remains with recent more positive economic growth across all main sectors, to help push back against the effects of rising costs.
Stats at a Glance:
Recruitment Market Update 2025
- Good news as March saw overall active job postings at 1,583,465 – an increase of 2.3% on the previous month.
- The UK employment rate is standing at 75.1%. Above estimates of a year ago and up on the latest quarter.
- The UK unemployment rate is standing at 4.4%. Above estimates from a year ago, but largely unchanged in the latest quarter.
- The UK economic inactivity rate now stands at 21.4%. Below estimates from a year ago, and down on the last quarter.
- Estimated vacancies fell by 26,000 on the quarter to 781,000 in January to March 2025. This is the first time they were below pre-pandemic levels.
- Average UK pay continued to rise; annual growth in total earnings (excluding bonuses) increased to 5.9% in the last quarter. Annual growth in employees’ average regular earnings (including bonuses) was 5.8%.
- Estimates for payrolled employees decreased by 8,000 between January and February 2025, but rose by 35,000 between February 2024 and February 2025.
- Payrolled employees fell by 21,000 over the quarter, but increased by 50,000 over the year, when looking at December 2024 to February 2025.
- There were 52,000 working days lost due to labour disputes across the UK in February 2025.
- Permanent staff appointments fell for the 29th month in a row, amid reports that organisations have pared back hiring plans. This is due to a weaker economic outlook and increased payroll costs. Though sharp, the latest drop in placements was the softest since last October.
Stats by Region:
Recruitment Market Update 2025
In December 2024 to February 2025, the highest employment rate in the UK was in the South West (79.9%) and the lowest was in the North East (69.7%).
The highest unemployment rate was in London (6.5%) and the lowest was in Northern Ireland (1.5%).
The highest economic inactivity rate was in Northern Ireland (27.5%) and the lowest was in the South West (17.3%).
Comparing March with last year, changes in the number of payrolled employees ranged from a 1.4% increase in Northern Ireland, to a 0.5% decrease in Wales.
For the 12 months ending December 2024, average weekly hours worked varied between London, with 33.8 hours worked, and Wales, with 31.2 hours worked; London saw the most total weekly hours worked, at 164 million hours per week.
Topical Data - 1 in 4 workers worry that AI will lead to job losses
This month sees workplace expert Acas carry out a poll asking employees from England, Scotland and Wales what their biggest concerns about the use of AI were.
The results have identified that more than a quarter of workers are worried that AI will lead to job losses. Further survey results, as below:
- 17% are concerned about AI making errors
- 5% are worried about the effects on the environment
- 26% fear job losses
- 15% are worried about AI not being regulated
- 11% have data protection concerns
- 17% have no concerns
- 1% have other concerns and 8% have no comment
Some tips for Employers from Acas on the use of AI at work include:
- Develop clear policies regarding the use of AI in the workplace
- Consult employees on the introduction of AI as it could mean a change in T&Cs
- Highlight how AI can improve employees’ roles
- Remember that AI is not perfect, therefore its use needs to be checked for accuracy, tone and bias
- Train employees how to use AI
- Remember that data privacy policies will apply for the use of AI – be aware of GDPR responsibilities
- Check with IT re the use approved AI platforms
- Employees need to be careful entering any business sensitive or personal information into public AI tools
Earlier this year, Signature completed a deep-dive into AI adoption. Click here for an essential five minute read to uncover industry specific applications, how to make AI work for you, the tech and tools driving progress and more: Reshaping Work, Education, and Business: AI in 2025.
Topical Data - Finding solutions to sickness absence
Amid rising sickness rates in the UK, employers are struggling with a significant hit to productivity, according to a new survey by the REC.
When asked about the impacts of sickness absence, surveyed employers shared their concerns:
48.5% of employers feel that sickness absence reduces productivity.
36.5% of employers think that sickness absence results in a decline of the quality of service provided.
31% of employers believe sickness absence decreases the morale of co-workers.
26% of employers are of the opinion that sickness absence increases direct and indirect financial implications.
When asked what, if any, measures they are taking to enhance and promote health and wellbeing, whilst minimising sickness absences, the surveyed employers said they offer:
- Flexible work policies – 51%
- Workplace safety measures such as health & safety training and/or guidance – 40%
- Educating employees about health and wellbeing – 37%
- Employee Assistance Programmes/counselling or mental health support – 30%
- Measures to monitor and manage addressing workload – 29%
- Promoting workplace physical hygiene – 27%
If this subject is of interest to you, keep an eye out for the ONS publishing its Sickness Absence in the UK Labour Market 2023 to 2024 at the beginning of May.
Comments from Industry Expert
Commenting on the AI survey results, Dan Ellis, Interim Chief Executive of Acas, said:
“Some employers may be looking to embrace new technologies as a way to cut costs, increase productivity or make workers’ jobs easier.
“There can be concerns from staff when new technologies are introduced at work and it’s clear from our study that their biggest worry is that AI will result in job losses.
“Bosses should have clear policies on the use of AI at work, remember that it is not a perfect technology and have open conversations with employees around its use.”
Please note that the above Market Update 2025 data may be subject to statistical revisions over time.
Recruitment Market Update 2025:
Forecasted Trends and Growth - March
Welcome to your Recruitment Market Update 2025.
As we come to the end of the financial year, if you manage a team, important UK employment law changes are coming into effect throughout April. See below:
- From 6th April 2025, the secondary class 1 NIC employer threshold will be reduced from £9,100 to £5,000 and the main rate of secondary Class 1 NIC employer contributions will rise from 13.8% to 15%. It’s predicted that businesses may offer lower salaries and increase prices to help balance the additional cost.
- Employees will have a new statutory right to up to one week of unpaid carer’s leave per year to care for a dependent with long-term care needs.
- Employees will be able to make a flexible working request from day one of employment (previously after 26 weeks). Employers must respond within two months and cannot reject a request without consultation.
- Redundancy protection is extended to pregnant employees, starting from the day they notify their employer. Employees on maternity, adoption or shared parental leave with protection continuing for 18 months after the child’s birth/adoption placement. Paid neonatal care leave is also expected to be enhanced.
- Paternity leave reforms – such as the option to split paternity leave into two separate one week blocks. Leave can be taken within 52 weeks of the child’s birth/adoption (currently 8 weeks). Employees must give only 28 days’ notice, instead of the previous requirement to give notice by the 15th week before the expected week of childbirth.
- Shared parental pay, maternity pay, paternity pay, adoption pay and parental bereavement pay increases from £184.03 to £187.18 per week.
- From April 2025 onwards, workers can request a more predictable working pattern after 26 weeks of service.
- On 6th April 2025, Statutory Sick Pay (SSP) will increase from £116.75 to £118.75 per week, with qualifying parameters.
- The maximum week’s pay used to calculate statutory redundancy payments will increase from £700 to £719 from 6th April 2025.
- Changes to unfair dismissal – the maximum compensatory award increases from £115,115 to £118,223.
- 4th April 2025 is the deadline for publishing gender pay gap data for private and voluntary sector employers with at least 250 employees.
- From 1st April 2025, the National Minimum Wage will increase to £12.21. The Real Living Wage will also rise to £13.85 in London, and to £12.60 across the rest of the UK. As Champions of the Real Living Wage, this rise will need to be implemented by 1st May 2025.
Click for more information following the Government’s amendments to the Employment Rights Bill.
Key Employment Law Dates For Your Diary
1st April – National Minimum and Living Wage rates increase.
4th April – Gender pay gap data deadline.
6th April – SSP increases to £118.75.
6th April – Shared Parental, Maternity, Paternity, Adoption & Parental Bereavement Pay rises to £187.18. Neonatal Leave & Pay comes into play.
6th April – Unfair dismissal limits come into effect.
6th April – Employer NI increases from 13.8% to 15%.
Stats at a Glance:
Recruitment Market Update 2025
- Good news as February saw overall active job postings at 1,550,191 – an increase of 0.1% on the previous month.
- The UK employment rate is standing at 75%. Above estimates of a year ago and up in the latest quarter.
- The UK unemployment rate is standing at 4.4%. Above estimates from a year ago and up on the latest quarter.
- The UK economic inactivity rate now stands at 21.5%. Below estimates from a year ago, and down on the last quarter.
- Estimated vacancies fell by 3,000 to 816,000 in December 2024 to February 2025, however, they are still above pre-pandemic levels.
- Annual growth in total earnings (excluding bonuses) increased to 5.9% in the last quarter. Annual growth in employees’ average regular earnings (including bonuses) was 5.8%.
- Early estimate of payrolled employees for January 2025 increased by 9,000 on the month and increased by 44,000 on the year.
- There were 50,000 working days lost due to labour disputes across the UK in January 2025.
Stats by Region:
Recruitment Market Update 2025
In November 2024 to January 2025, the highest employment rate in the UK was in the South West (79.1%) and the lowest was in Wales (69.9%).
The highest unemployment rate was in London (6.3%) and the lowest was in Northern Ireland (1.5%).
The highest economic inactivity rate was in Northern Ireland (26.6%) and the lowest was in the South West (18%).
Comparing February with last year, changes in the number of payrolled employees ranged from a 1.3% increase in Northern Ireland, to a 0.1% decrease in Scotland.
Topical Data - Effects of Employment Law Changes
Companies’ response as part of the REC’s topical data survey when asked – Which of the following Government announcements , if any, do you anticipate will have the greatest impact on your business practices:
Comments from Industry Expert
Commenting on the latest labour market statistics, Neil Carberry, Chief Executive of the REC, said:
“Today’s data reflects a greater stability in the labour market, with payrolled employees and job vacancies holding steady, and the employment rate up.
“There’s a frustrating sense of ‘what if?’ in this data though. The upcoming national insurance changes have likely dampened some hiring, adding pressure to businesses already struggling with rising costs – including those providing essential staff for public services. Today’s relatively strong pay numbers also need to be set in the context of the downward pressure on pay we will see from April as employment costs rise.
“In that challenging context, it is good to see progress on tackling economic inactivity. Business and government must work together to get more people into the workforce sustainably. But that has to start with helping business to hire people on whom they are taking a chance. Welfare reform is one part of that, but so is tackling barriers to hiring people on potential. Addressing the design of the Employment Rights Bill to build firm confidence in taking a chance on someone and getting skills right with a focus on learners and their employers should both be priorities if we are to pick up pace.”
Please note that the above Market Update 2025 data may be subject to statistical revisions over time.
Recruitment Market Update 2025:
Forecasted Trends and Growth - February
Welcome to your Recruitment Market Update 2025.
A glimmer of hope for the recruitment market as the number of overall active job postings in January 2025 was 1,516,535 – an increase of 7.2% on the number of job postings from December 2024. Every region in the UK saw a rise in active job postings, marking the first time that job postings have risen since June 2024.
Unsurprisingly, with the current economic climate, fewer employees, particularly in professional services are willing to change jobs. To add to this, it’s reported that skills shortages remain a major challenge for companies.
Stats at a Glance:
Recruitment Market Update 2025
- The UK employment rate is estimated at 74.9%. Above estimates of a year ago and up in the latest quarter.
- The UK unemployment rate is estimated at 4.4%. Above estimates from a year ago and up on the latest quarter.
- The UK economic inactivity rate now stands at 21.5%, below estimates from a year ago, and down on the last quarter.
- Estimated vacancies fell by 9,000 to 819,000 in November to January 2025, however, they are still above pre-pandemic levels.
- Annual growth in total earnings (excluding bonuses) increased to 5.9% in the last quarter and annual growth in employees’ average regular earnings (including bonuses) was 6.0%.
- Early estimate of payrolled employees for January 2025 increased by 21,000 on the month and increased by 49,000 on the year to 30.4 million.
- There were 52,000 working days lost due to labour disputes across the UK in December.
Stats by Region:
Recruitment Market Update 2025
In October to December 2024, the highest employment rate in the UK was in the South West (78.8%) and the lowest was in Wales (70.0%).
The highest unemployment rate was in London (6.1%) and the lowest was in Northern Ireland (1.6%).
The highest economic inactivity rate was in Northern Ireland (26.6%) and the lowest was in the South West (17.9%).
Comparing January with last year, changes in the number of payrolled employees ranged from a 0.1% increase in Northern Ireland, to a 0.1% decrease in Scotland.
Topical Data - CIPD Labour Market Outlook
February sees the latest Labour Market Outlook report released by the CIPD, produced four times a year in February, May, August and November. The reports provide analysis on employers’ recruitment, redundancy and pay intentions, combined with unique insights on labour market topics. Highly respected within the employment industry; we’ve summarised a few key points here:
- Almost nine in ten employers believe measures in the Budget will be costly for them – two in five employers believe the increase in the rate of National Insurance Contributions (NICs) from 13.8% to 15%, and the reduction in the ‘secondary threshold’ from £9,100 to £5000, will increase their employment costs to a large extent.
- In response to increased employment costs, 42% of employers who report their organisation will be impacted plan to raise prices. A third (32%) of employers plan to reduce the number of employees through redundancies and/or recruiting fewer workers.
- One in five firms plan to cut back on training expenditure, something which is evidenced to have positive productivity effects, particularly important in times of skills shortages.
- The median expected basic pay increase remains at 3%. Expected pay awards in the next twelve months are also stable in the private and voluntary sectors (both at 3%) but have fallen in the public sector from 4% to 2.5%.
Employer stats when asked about the impact of key budget measures to increase employment costs:
Data suggests that only 22% of employers plan to absorb the costs and take lower profits. Employers also plan to reduce the amount of overtime/bonuses (23%). One in four (24%) of employers expect to cancel or scale down plans for investing in or expanding their business.
Employers planned responses to the increases in employment costs:
Click for the full report: CIPD Labour Market Outlook – Winter 2024/2025
CIPD Recommendations
- Take a long-term approach to decision-making and avoid knee-jerk reactions
to acute trends and developments. Aligning with your business objectives, take
a proactive approach to workforce planning and assess both your current and
future skills needs, revising your strategy as necessary. - Invest in developing your workforce and prioritise continuous learning and
training to enhance adaptability, productivity and employee retention, particularly
if your organisation has to make do with less. - Take advantage of technology and use it to empower your workforce. Leverage
automation and digital tools including AI to improve efficiency, streamline
processes and operations, to augment and extend the capability of your
workforce. - If downsizing is unavoidable, consider alternative solutions, such as
redeployment, job-sharing, short-time working, and so on, where possible.
Comments from Industry Expert
Commenting on the latest data from the REC’s Labour Market Tracker, Kate Shoesmith, Deputy Chief Executive of the REC, said:
“While there are tough conversations going on in boardrooms across the country, today’s report suggests it is too soon for gloom about the UK economy’s prospects overall for 2025. The increase in job postings is a clear sign that employers will hire when they need to. A 34.4% increase in new jobs signals a solid rebound in demand, showing that businesses remain resilient, despite both domestic and international headwinds. We will look closely in the coming months to see if we are looking at a broader turn.
“The government’s increased focus on economic growth is encouraging, but fostering business confidence requires tangible actions, not just rhetoric. Ongoing fiscal uncertainty, looming national insurance increases, and a potentially burdensome employment rights framework may yet dampen momentum. For real growth, businesses need a clearer strategy on how government industrial policies will truly drive economic progress.”
Please note that the above Market Update 2025 data may be subject to statistical revisions over time.
Recruitment Market Update 2025:
Forecasted Trends and Growth - January
Welcome to your Recruitment Market Update 2025.
Looking at the REC’s comments following Deloitte’s latest Q4 Consumer Tracker released this month. It is positive to learn there are reasons for cautious optimism as we look forward to mid-2025. Comparing Q3 to Q4, the tracker shows UK consumer confidence remains close to its highest level in five years. Deloitte’s forecasts of UK growth improving over the summer, supported by financial easing, align with this outlook. This provides further encouragement for employers and those seeking work.
Hiring and Economic Activity
The number of overall active job postings in December 2024 was 1,415,574, a decrease of 5.5%. This continues a trend of moderation back to pre-pandemic levels and also reflects the annual Christmas slowdown. Most pressing demand for workers includes Childminders, Optometrists, Authors, Writers and Translators and Train and Tram Drivers.
KPMG/REC Report on Jobs highlights further declines in both permanent and temporary placements for the end of 2024. Whilst firms signal willingness to pay higher salaries to suitable candidates, permanent salary growth softens.
Stats at a Glance:
Recruitment Market Update 2025
- The UK employment rate is estimated at 74.8%. Largely unchanged from a year ago, but down on the last quarter.
- The UK unemployment rate is estimated at 4.4%. Above estimates from a year ago and up on the latest quarter.
- The UK economic inactivity rate now stands at 21.6%, below estimates from a year ago, and down on the last quarter.
- Estimated vacancies fell by 24,000 on the last quarter to 812,000, however, they are still above pre-pandemic levels.
- Annual growth in total earnings (excluding bonuses) increased to 5.6% in the last quarter and annual growth in employees’ average regular earnings (including bonuses) was 5.6%.
- Early estimate of payrolled employees decreased by 32,000 between October and November 2024, but rose by 95,000 between November 2023 and November 2024.
- There were 51,000 working days lost due to labour disputes across the UK in November.
Stats by Region:
Recruitment Market Update 2025
In September to November 2024, the highest employment rate in the UK was in the South West (78.3%) and the lowest was in Wales (70.0%).
The highest unemployment rate was in London (6.2%) and the lowest was in Northern Ireland (1.7%).
The highest economic inactivity rate was in Northern Ireland (26.1%) and the lowest was in the South West (18.5%).
Comparing December with last year, changes in the number of payrolled employees ranged from a 0.6% increase in Northern Ireland, to a 0.5% decrease in Scotland.
Topical Data - General Pay Awards
The REC has carried out a survey asking:
‘Think about the 2023/2024 financial year, did your organisation grant staff members a general pay award, separate from individual bonuses or salary increases resulting from promotions?’
Responses revealed that where staff had received a general pay rise, 59% have been awarded an increase of +4%, including a notable 29% where the raise has been +6%. This compared to 25% of organisations where the increase was less than 2% or was between 2-3.9%. The remaining 16% of organisations surveyed who had made a general pay award, preferred not to disclose the extent of the increase.
The REC also asked:
‘What was the average percentage pay rise given to staff?’
Topical Data - UK Recruitment Industry Status Report 2023/2024
The REC has published its annual Industry Status Report sharing data on the value and size of the staffing industry and the number of people placed into work. Key findings as below:
- In the recruitment industry, while 41% currently already use AI for recruitment, another 30% express intentions to adopt these technologies within the next year. However, one in four (26%) do not plan to implement AI in their recruitment efforts.
- The recruitment industry contributed £44.4 billion to the UK economy in 2023, accounting for 1.8% of the UK’s Gross Value Added (GVA).
- £10.5 billion (23.6%) was achieved through permanent placement activity.
- £33.9 billion (76.4%) was achieved through temporary/contract placement activity.
Comments from Industry Expert
Commenting on the latest data from the Office for National Statistics, Neil Carberry, Chief Executive of the REC, said:
“December is always a recruitment low point, so we will have to wait for January and February figures to judge where we are as firms return to the market in 2025. Despite a long slowdown in demand, the fact that we are only returning to pre-pandemic norms now shows that there are still opportunities out there for jobseekers, who skilled recruiters are ready to help with their next step.
“A new job is the best way to build wage growth and opportunity into someone’s career. We anticipate that a return to growth this year will drive business confidence to hire and invest. Firms will be looking to the Chancellor to underpin this confidence in her interventions later in the month. At the moment, government policy feels like more of a hindrance than a help in getting employment rates up.
“The UK’s labour market is one of the most competitive in the world – and our labour supply is only getting tighter over time. As recruitment specialists, we can see that the approach firms take needs to change to ensure that we make the best of our people and the new tech that is available for us. For any firm, hiring should be a strategic activity – too many businesses aren’t there yet.”
Please note that the above Market Update 2025 data may be subject to statistical revisions over time.
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