As we move into the final quarter of 2025, the UK labour market is showing tentative signs of stabilisation. Insights from the KPMG and REC, UK Report on Jobs (compiled by S&P Global), the REC’s latest commentary, and Indeed Hiring Lab data all point towards a market that’s subdued, but far from stalled.
📉 Hiring Weakens – But at the Slowest Rate in a Year
The latest KPMG and REC, UK Report on Jobs survey, revealed a further, albeit softer, decline in the recruitment of permanent staff at the end of the third quarter. Low employer confidence and cost concerns weighed on staff hiring, according to survey participants.
Vacancy data meanwhile highlighted a marked drop in demand for staff, similar to that seen in August. The sustained fall in hiring and reports of redundancies have driven a further rapid increase in candidate numbers for both permanent and temporary positions. The shift in demand and supply for workers has placed downward pressure on pay, with both permanent salaries and temp pay rates up only marginally.
📊 Indeed Data Shows Ongoing Cooling in Demand
Indeed’s Job Postings Index shows UK job postings still sitting below their mid-2024 peak, indicating softer hiring intent across most professional sectors.
For HR roles, postings remain well above early-pandemic levels (index ≈ 180 vs 100 in Feb 2020), but have eased steadily through 2025 as companies consolidate teams and focus on retention rather than expansion.
This mirrors the wider corporate trend towards cost control and productivity rather than headcount growth.
🎓 Opportunities Still Uneven Across Roles
Graduate and early-career roles continue to be affected, with fewer entry-level positions compared to pre-pandemic years.
Sectors such as Engineering and Technical Services are showing more resilience, while Retail, Hospitality, and Marketing continue to see the steepest declines in hiring.
🏡 Flexibility and Retention Still Front of Mind
Hybrid working remains firmly embedded, with around 15% of all UK job adverts referencing remote or hybrid options.
Employers are also leaning more heavily on internal mobility and upskilling to maintain engagement, especially as external hiring slows.
💡 Implications for Employers
• Retention matters more than recruitment – focus on internal growth, flexibility, and clear progression.
• Be realistic about salary pressure – wage growth is slowing, but candidates remain selective.
• Keep flexibility visible – hybrid policies and part-time options still drive attraction.
The market may be subdued, but it’s showing resilience. For HR and People Leaders, this moment offers space to strengthen culture, invest in development, and prepare for recovery when confidence returns.
Sources:
• KPMG and REC, UK Report on Jobs – October 2025 (compiled by S&P Global)
• REC Labour Market Commentary – October 2025
• Indeed Hiring Lab – UK Job Postings Index (October 2025)