Recruiters Face Mounting Challenges Amid Steep Drop in Job Openings
The UK labour market continued its downward trend in June 2025, delivering a stark warning to the recruitment sector: hiring is slowing, and quickly. According to the latest figures, the number of payrolled employees dropped by 55,000 between March and April, with a year-on-year fall of 115,000, showing clear signs of a pullback in employer demand.
Early estimates for May 2025 paint an even grimmer picture. With a provisional decline of 109,000 employees month-on-month and a staggering yearly fall of 274,000, payrolled employment now stands at 30.2 million — its lowest in recent years. These early numbers are flagged as more uncertain due to earlier-than-usual data extraction, but the trend is consistent: recruitment demand is softening.
Vacancies Hit New Low: 35th Straight Quarterly Decline
For recruiters, the most pressing signal is the ongoing collapse in job vacancies. The number of advertised roles fell by 63,000 in the quarter to 736,000 — marking the 35th consecutive quarterly fall. Notably, 14 out of 18 industry sectors reported a decline, and vacancies now sit 59,000 below pre-COVID levels.
Feedback from employers suggests many firms are pausing recruitment or holding back on backfilling roles, increasing the pressure on staffing firms relying on job flow to maintain revenue.
Unemployment Rises, While Real Wage Growth Slows
Despite a steady employment rate of 75.1%, the unemployment rate edged up to 4.6%, offering recruiters a larger candidate pool — but fewer available jobs. Economic inactivity fell slightly to 21.3%, suggesting some return to the labour force, but not enough to offset demand issues.
Wage growth is also starting to cool. Regular earnings rose by 5.2% year-on-year, with real wage growth (adjusted for inflation using CPIH) at just 1.4%, down from recent peaks. This suggests budget-conscious employers may be less willing to negotiate on salary — something recruiters will need to navigate carefully when placing candidates.
Where Opportunity Still Exists
While overall workforce jobs rose to 37.1 million in March 2025, with growth in both public and private sectors, the rise is likely driven by part-time or lower-wage roles. For recruiters, the key lies in sector diversification, candidate pipeline optimisation, and stronger advisory support for clients navigating economic uncertainty.
The message is clear: the market is tightening, and recruiters must adapt to stay ahead in a hiring climate that shows no signs of loosening soon.
Vacancies and jobs in the UK: June 2025
- The estimated number of vacancies in the UK fell by 63,000, or 7.9%, on the quarter, to 736,000 in March to May 2025; this is the 35th consecutive quarterly decline.
- Total estimated vacancies were down by 150,000, or 16.9%, in March to May 2025 from the level of a year ago, and 59,000 (7.4%) below their pre-coronavirus (COVID-19) January to March 2020 level.
- The number of unemployed people per vacancy was 2.2 in February to April 2025; this is up from 1.9 in the previous quarter (November 2024 to January 2025).
- The estimated number of workforce jobs in the UK was 37.1 million in March 2025; this is an increase of 187,000 (0.5%) from December 2024, with increases of 120,000 (0.4%) in the employee jobs component and 70,000 (1.6%) in the self-employment jobs component.
- The estimated number of workforce jobs was up by 304,000 (0.8%) in March 2025 from the level of a year ago; human health and social work activities had the largest increase of 166,000 (3.3%).
Office for National Statistics (ONS), released 10 June 2025, ONS website, statistical bulletin: Labour market overview, UK: June 2025
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