2025 Labour Market Update – What It Means for Candidates and Employers in England

At Harris Lord, we’re committed to keeping our clients and candidates informed with the latest data and honest commentary on the changing labour market.

The KPMG and REC Report on Jobs (May 2025) gives us a strong sense of where the market is heading. And while there are some signs of stabilisation, recent data tells us that both employers and candidates in England are navigating a cautious and highly competitive landscape.

Here’s what the numbers, and our experience, are saying.

Permanent Placements: Still Down, But Not Spiralling

Across England, permanent staff placements dropped for the 31st consecutive month. That said, the 44.7 index reading for April (anything under 50 = contraction) was the least severe decline in seven months.

📍 In London, the drop was mildest, hinting at slightly stronger confidence among capital-based employers.

📍 The South of England saw the most pronounced slowdown, reflecting tighter budgets and greater hiring hesitation.

Temp Billings Dip

Temporary hiring also declined for the 10th straight month, with a national index reading of 46.3. Again, this is better than earlier in 2025, but it highlights how uncertainty around costs and future demand is making companies reluctant to commit, even to short-term staff.

 📍 The steepest fall was seen in the South, whereas London showed stronger resilience with billings near pre-decline levels

Candidate Availability at 4-Year Highs

Availability of both permanent and temporary candidates surged again in April. This marks the second-fastest rise in candidate supply since December 2020. Why?

• Ongoing redundancies and company restructures
• Job losses in response to weaker hiring demand
• Candidates actively seeking new roles due to fears around job security and a desire for better pay

In England, all regions reported substantial increases in jobseeker availability, with the Midlands and North seeing particularly high spikes for temp roles.

Pay: Still Rising, But Slowly

Pay for new starters continued to grow, but more modest than historical trends.

• Permanent salary growth stayed solid but below average, with an index reading of 53.9 (Midlands saw the highest increases).
• Temporary pay rose to its strongest rate in 11 months (index 53.3), driven largely by April’s national minimum and living wage increases.

This suggests that wage inflation is being driven more by legislative change than by employer competition, at least for now.

Vacancies: Eighteen Months of Decline

The Total Vacancies Index for April was 43.1, showing a further decline in employer demand. This marked the 18th month in a row that vacancy levels have fallen.

• Permanent roles saw continued decline across both public and private sectors.
• Temporary vacancies fell sharply, especially in retail, where demand hit a post-pandemic low.

In healthcare specifically, demand fell dramatically:

• Permanent healthcare vacancies dropped from 46.6 to 34.7 in a single month.
• Temporary healthcare demand also fell, down from 44.4 to 37.9.

 Skills in Demand (and Oversupply)

Skills shortages continue, but vary by region and sector. In England, engineering, IT, HR, and healthcare roles are still in high demand.

In-demand skills (England, May 2025):

• Engineers (electrical, mechanical, field service)
• Software developers and cyber security specialists
• Healthcare assistants and research scientists
• HR professionals and project managers

Oversupplied areas:

• General administration and clerical work
• Retail roles
• Entry-level IT and customer service
• Blue collar warehousing/production

What It Means for you

For Employers

• It’s a buyer’s market, candidate pools are large, but competition for skilled talent remains.
• Review your onboarding and retention strategies to attract top talent without overextending budgets.
• Use this period to identify future hiring needs and partner with recruiters early.

For Candidates

• Now is the time to polish your CV, enhance your online presence, and get tailored guidance.
• Consider short courses or certifications to stay competitive in a crowded market.
• Work with a recruiter who understands sector trends, not just job boards.

Partner with us

We’re here to guide you through the data, the noise, and the uncertainty. Whether you're a business navigating hiring freezes or a candidate exploring your next move, we can help you act with clarity.

Harris Lord – Insight-led recruitment that delivers clarity in a changing world.