Tania Bowers, Global Public Policy Director, APSCo charts what’s in store for the rest of the year.
September is the time to reset and reinvigorate business activity and, in normal circumstances, recruitment. It may have been a tough year so far, but we are seeing some signs of optimism. In fact, according to APSCo’s latest Recruitment Index (produced in conjunction with Bullhorn), contract placements in particular are showing signs of stability, up 2 per cent month-on-month in July. Permanent vacancies also saw an 8 per cent increase when compared to June.
On a broader level, we’re also seeing reports of elevated optimism in the UK. According to the August Lloyd’s Business Barometer, business confidence has risen two points to 54 per cent. These are all promising signs for the majority of UK firms, regardless of sector or size. However, for staffing companies across the country, this optimism may be overshadowed by the continued changes in employment regulations that everyone is attempting to navigate.
A year of change
It’s been over a year since Labour came into power with grand plans of significantly reshaping and revamping employment law – and they have certainly lived up to their aims so far. It’s important to state that APSCo does recognise the need for reforms in legislation to ensure that it is relevant in the modern world of work and business, which is now more fluid, global, complex and technologically influenced than it has ever been. However, regulation needs to be balanced and should ultimately support economic growth, as well as stability for businesses and workers alike.
While we continue to work closely with ministers and policy makers to ensure the recruitment sector is supported, rather than penalised, in all legal reforms, staffing companies also need to be up to speed with not only the latest developments, but also the future roadmap for employment legislation. Here’s an overview of what is in store for the remainder of the year.
Employment Rights Bill
Of course, the biggest element of Labour’s focus in the recruitment world is the introduction of the Employment Rights Bill (ERB). Introduced in October 2024, the Bill is expected to receive Royal Assent in October of this year following its third reading in the House of Lords. As most readers will already be aware, it introduces guaranteed hours and reasonable notice of shifts, extends ‘day one’ employment rights to agency workers, removes waiting days for Statutory Sick Pay, and establishes the Fair Work Agency (FWA) to enforce employment rights such as holiday pay.
While these reforms aim to enhance worker protections, APSCo and a range of other sector bodies have warned that they could make hiring more complex and costly, potentially stifling job creation and seasonal recruitment.
Given the complexity of the Bill, the implementation will be phased to allow businesses to adapt. There is a full timeline available, but we do not doubt that the November Autumn Budget announcement will be a prime time for further updates.
Equalities Bill
In parallel to the ERB, the Government is preparing to introduce a new Equalities Bill, announced in the King’s Speech last year. This legislation seeks to strengthen workplace protections for ethnic minorities and disabled individuals, with a particular focus on preserving equal pay rights.
Although the draft Equality (Race and Disability) Bill has yet to be published, a call for evidence concluded in June, and the Government’s response is expected to be unveiled at some point in September. Key areas under consideration include improving pay transparency, tackling discrimination, and ensuring compliance with equality duties. This will impact staffing firms on two fronts: through the services they offer clients and their own recruitment and people management.
Skills reforms and apprenticeship strategy
Skills development is another major focus of the Government’s agenda. The Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Act 2025, which received Royal Assent in May, formally established Skills England and transferred key responsibilities to it.
Additionally, the English Devolution and Community Empowerment Bill, introduced in July, will devolve control of adult skills funding to Mayoral Strategic Authorities, with Royal Assent anticipated in February 2026.
Industrial Strategy and Investment in Training
The Government’s Industrial Strategy, published in June, outlined a vision for supporting eight high-growth sectors through targeted investment in skills and training. This includes a £400 million boost to 16–19 education funding, £160 million for colleges to address recruitment and retention challenges, and up to £6,000 in tax-free retention incentives for early-career FE teachers.
By 2028, annual investment in skills is set to reach £1.2 billion, with partnerships involving NVIDIA, Google, and Microsoft aiming to train 7.5 million UK workers in AI-related skills. The Small Business Plan, released in July, reinforces these commitments with shorter apprenticeships now available from August 2025 and short courses in priority sectors launching in April 2026.
For skill-short remits such as technology and engineering, this investment will be welcome news; however, the impact won’t be felt for some time, making the role that recruiters play in sourcing hard-to-find talent fr more critical for the immediate future.
AI regulation
Technology and AI regulation are also evolving at speed. The Data (Use and Access) Bill, passed in June 2025, mandates economic impact assessments on the use of copyrighted material in AI development. Although it stops short of requiring companies to disclose their use of such material, it lays the groundwork for future regulation. A separate AI Bill is expected, alongside the AI Opportunities Action Plan launched in January. These initiatives aim to position the UK as a global leader in artificial intelligence, while also ensuring the workforce is equipped for emerging roles in AI-powered industries.
For staffing companies that are already exploring the use of AI, it will be vital to ensure that data is safeguarded and ethical technology practices are being followed. While the EU AI Act doesn’t apply to UK recruitment businesses operating in the domestic market, it is a useful guide as to the potential regulation that firms could be expected to abide by and should act as a baseline for best practice.
Immigration reform and workforce strategy
Immigration policy has also undergone a major overhaul. In July, Home Secretary Yvette Cooper announced reforms designed to reduce net migration and restore control over the system. These changes, which took effect immediately, included raising Skilled Worker visa thresholds, removing 111 occupations from eligibility, and ending overseas recruitment for care workers due to concerns over exploitation. A temporary shortage list will allow limited access to critical roles until 2026, after which sectors must demonstrate domestic workforce strategies to retain immigration talent routes. Additional changes expected by year-end include increased immigration skills charges, stricter language requirements, and a new family migration framework. The Migration Advisory Committee has been tasked with monitoring sectors experiencing skills shortages and advising ministers annually.
Looking ahead
As the recruitment sector navigates this complex and rapidly changing environment, staying informed and proactive is essential. The remainder of 2025 promises further developments that will shape the future of staffing and employment in the UK. For recruitment business owners and professionals, understanding these changes and preparing accordingly will be key to maintaining resilience and driving growth in a transformed landscape.
