The latest Recruitment and Employment Confederation (REC) / Whitestone Insight JobsOutlook suggests the chances of there being a sustained bounce back in hiring this year hangs in the balance because of employers’ concerns about the strength of the economy.
The latest JobsOutlook shows the short-term permanent hiring outlook, for the next three months, improved by three points (to net: +9) in the three months to April 2025. The medium-term hiring outlook, for the next four to 12 months, improved by four percentage points in the three months to April 2025 (+9). Adding further hope of a potential jobs comeback, the balance of sentiment towards short-term use of temporary and/or contract workers was restored to positivity this quarter – up 3 percentage points to net: +3, with an uptick to net: +5 in the last month (April 2025). Finally the five-point rise in hiring intentions for medium-term recruitment of temps experienced across the quarter (+8) was largely driven by a spike in optimism in April 2025 (to net: +14).
This bodes well for immediate recruitment, such as summer seasonal hiring 2025, as well as encouraging news for school leavers and graduates looking to enter the workforce after their exam results.
But whether a significant jobs market comeback occurs and how sustainable it turns out, is in the balance because of employers increased negativity about the economy, with employers dealing with strong economic headwinds this year from cost inflation and the impact of government policies such as the National Insurance rise. There is also anxiety about the workability of proposals in the government’s Employment Rights Bill.
Across February-April 2025, employers’ perceptions on how the UK economy was performing were a notable 12 points lower – at net: -35 – than in the three months to February 2025. Employers’ confidence in making investment and hiring decisions similarly fell, by 5 points to net: -9 February-April 2025.
“Firms clearly see potential, but they also see risk,” said REC Deputy Chief Executive Kate Shoesmith. “While improving hiring intentions suggest a jobs comeback this year, the extent of any bounce back depends on the economic and political headwinds on firms easing a fair bit. This makes it the critical test of the Spending Review: does it present a clear, optimistic and long-term path to growth?”
Shoesmith goes on to say getting the Employment Rights Bill right will no doubt help the situation. “Firms want reassurance that the application of the Bill avoids tying businesses and workers up in greater costs and complexit,” she remarks. “Reform to the Bill, and the emphasis on using apprenticeship funds effectively announced this week, will help to keep the job pipelines working.
“It is hoped that London will prove a bellwether for the job market as it has in the past, with employers in that region markedly optimistic about their hiring intensions.”
Indeed, optimism in London on permanent hiring for the next three months notably restored – moving from net: +3 to net: +18, quarter-on-quarter. The medium term, next four-12 months, hiring intention in London was restored – bouncing from net: -2 to net: +19, quarter-on-quarter.
On the temp short-term hiring side of things, the bounce back in London – from net: -3 in the three months to February to net: +13 in the three months to April – was notable. And on medium-term temporary hiring, there was a significant improvement in optimism in London, from net: -5 to net: +10.
Across the UK, there was a significant improvement in the permanent hiring outlook among mid-sized (50-249 employees) enterprises and the same was true of that size firms’ intention to hire temporary workers in the short and medium term.
