Recruiters Face 37th Straight Quarter of Falling Demand
The latest August 2025 labour market figures confirm a further squeeze on recruitment activity, as both payrolled employment and vacancies continue their downward trend.
Between June 2024 and June 2025, the number of payrolled employees fell by 149,000 (0.5%), with a further 26,000 drop month-on-month. Looking at the April–June quarter, payrolled employees declined by 110,000 year-on-year and 66,000 over the quarter.
Early estimates for July 2025 also signal more strain, with employee numbers dipping by another 164,000 year-on-year, though monthly changes remained broadly flat. At 30.3 million, the workforce has lost significant momentum compared with last year.
Vacancies Slide to 718,000 – Lowest in Years
Recruiters are navigating the 37th consecutive quarterly fall in vacancies, with numbers dropping by 44,000 (5.8%) to 718,000 between May and July 2025. Vacancies declined across 16 of 18 sectors, as feedback from employers points to a reluctance to expand or even replace departing staff.
This contraction reflects cautious business sentiment and signals fewer opportunities for placements, intensifying competition among recruiters for available roles.
Employment Rate Holds Up, Labour Supply Expands
Despite weaker demand, the employment rate edged up to 75.3%, slightly above last year’s level. The unemployment rate rose to 4.7%, giving agencies a larger pool of active jobseekers. Economic inactivity fell to 21.0%, its lowest in recent quarters, suggesting more people are seeking work.
For recruiters, this means a greater supply of candidates, but with fewer roles to fill, matching skills to opportunities will be critical.
Pay Growth Slows but Stays Positive in Real Terms
Earnings growth continued, but at a slower pace. Regular pay rose by 5.0%, while total pay (including bonuses) grew by 4.6%. In real terms, after inflation, growth was modest: 0.9% for regular pay and just 0.5% for total pay (CPIH-adjusted).
The public sector (5.7%) outpaced the private sector (4.8%) in wage growth, highlighting potential hotspots for recruiters focused on public service hiring.
Recruitment Outlook: Navigating a Tighter Market
For the recruitment industry, August’s figures confirm a challenging environment: falling vacancies, cautious employers, and only modest real wage growth. Yet, with more candidates entering the labour market, agencies that invest in strategic client relationships, niche specialisms, and candidate care may find opportunities even in a shrinking jobs market.
Vacancies and jobs in the UK: August 2025
- 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.
- This is the 37th consecutive period where vacancy numbers have dropped compared with the previous three months, with vacancies decreasing in 16 of the 18 industry sectors.
- Total estimated vacancies were down by 145,000 (16.8%) in May to July 2025 from the level of a year ago, and 77,000 (9.7%) below their pre-coronavirus (COVID-19) January to March 2020 level.
- The number of unemployed people per vacancy was 2.3 in April to June 2025; this is up from 2.1 in the previous quarter (January to March 2025).
Office for National Statistics (ONS), released 12 August 2025, ONS website, statistical bulletin, Labour market overview, UK: August 2025
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