As we move into late summer 2025, the UK labour market is in a period of gentle adjustment rather than dramatic change. Insights from the REC Response to ONS Labour Market Figures (Aug 2025), the KPMG/REC Report on Jobs (Aug 2025), and the Indeed Hiring Lab UK Mid-Year Report (Aug 2025) all point in the same direction: hiring is slowing, but the market is far from collapsing.
📉 Hiring Activity Slows, but Stability Remains
Recruitment consultancies report a continued fall in permanent and temporary placements, with demand particularly cautious across sectors such as HR, Marketing, Project Management, and Tech.
Indeed data shows UK job postings are down compared with earlier in the year, especially for professional roles and positions with high remote flexibility.
Despite this, redundancies remain modest. Unemployment has edged up slightly, but the ratio of unemployed people to vacancies remains below historical norms (2.2 vs 2.8) — suggesting employers are still keen to retain staff amid ongoing skills shortages.
🎓 Early-Career Talent Faces Challenges
Graduate and entry-level positions are fewer than in previous years, highlighting the difficulties for new talent entering the workforce. Employers remain cautious about committing to training and onboarding at a time of economic uncertainty.
🏡 Hybrid and Flexible Working Still Key
Roles offering remote or hybrid options remain attractive (approx. 15% of postings), demonstrating that flexibility continues to be a crucial factor in recruitment and retention.
At the same time, zero-hours contracts are in decline (1.8% in May), reflecting legislative changes and a broader shift toward more stable employment terms.
💡 Implications for Employers
- Invest in retention: With hiring intentions lower, focus on upskilling, succession planning, and flexible contracts.
- Support emerging talent: Graduates and early-career professionals need clear pathways and guidance.
- Keep flexibility competitive: Hybrid roles remain a strong draw for candidates.
The UK labour market is cooling, not collapsing. This period offers HR and People Leaders the chance to strengthen teams, refine EVP, and prepare for a future shaped by flexibility, inclusion, and digital readiness.
Sources:
- REC Response to ONS Labour Market Figures – August 2025
- KPMG/REC UK Report on Jobs – August 2025
- Indeed Hiring Lab – UK Employment Figures, August 2025
At Resourcing4HR, we speak every day with HR professionals adjusting to the current market — from individuals looking for greater job security or flexible working, to clients rethinking their team structures.
Whether you’re hiring now or planning ahead, we can support you with:
Specialist HR recruitment advice Up-to-date insight into what candidates want Flexible options — permanent, contract or interim
Contact us at annabel@resourcing4hr.co.uk or karen@resourcing4hr.co.uk to find out how we can help.