As the year draws to a close, it’s the perfect time to reflect on the key developments that shaped 2024’s job market. Throughout this article, we’ll be taking a closer look at what’s happening in the UK job market today, exploring the challenges faced by both employers and candidates and providing some insights into what 2025 might hold.
Key Challenges Faced by UK Employers
The Autumn Budget brought with it some difficult challenges for UK employers, stemming from squeezes on budgets across industry sectors, increases in wages, and the uncertainty of a change in government. Information shared by The British Chambers of Commerce suggests that cost pressures remain a concern for SMEs, with many fearing the upcoming increase in employer National Insurance contributions, the rise in the National Living Wage, and the Employment Rights Bill.
Despite these challenges, The CIPD’s Labour Market Outlook shows encouraging signs as recruitment still remains a priority, with 67% of employers planning to hire in the next three months, led by the public sector at 78%. On the other hand, the report found that SMEs are less likely to hire groups that face barriers in the labour market, such as parent returners, with 21% saying they don’t plan to hire from these groups over the next three years.
A Decline in Permanent Job Vacancies and Rising Competition for Candidates
Throughout 2024, the UK job market experienced a significant slowdown, with permanent job vacancies declining across the country. According to KPMG and REC UK, permanent placements in November fell at their fastest rate since August 2023, which suggests we are seeing a rise in fearful hiring practices following October’s budget. This decline was led by the South of England.
This reduced hiring activity means candidates are now facing greater competition for available positions. However, temporary recruitment offers some hope, as private sector temporary hiring activity was almost flat across the country, in comparison with the drop in permanent hiring.
The Office for National Statistics (ONS) Labour Market Overview
The Office for National Statistics (ONS) shared some insightful data to summarise the key trends of the UK job market:
- The UK unemployment rate for people aged 16 years and over was estimated at 4.3% from July to September 2024.
- The UK employment rate for people aged 16 to 64 years was estimated at 74.8% from July to September 2024.
- The estimated number of vacancies in the UK decreased from August to October 2024 by 35,000 in the quarter to 831,000 but still remained above pre-pandemic levels.
- There were an estimated 48,000 working days lost because of labour disputes across the UK in September 2024.
You can click here for a deep dive into these statistics.
A Positive Outlook for the UK Job Market in 2025
Although 2024 has presented various challenges for both employers and candidates, there are still reasons to remain optimistic about the UK job market in 2025. For example, the UK economy is projected to grow by approximately 1.4% in 2025, driven by improved consumer confidence, a recovering housing market, and increased business investments. As this occurs, the demand for skilled labour will rise, creating job opportunities across various sectors.
There are also specific sectors that are expected to grow significantly throughout 2025, mainly due to ongoing skill shortages. This includes:
- STEM
- Healthcare
- Construction and Skilled Trades
- Artificial Intelligence and Machine Learning
Flexible and remote working are also expected to continue being a growing part of the job landscape, opening up more hiring opportunities for both employers and candidates.
Advice for Employers
With rising costs on the horizon, it’s important for employers to ensure that they’re doing everything they can to keep costs down. Here are three tips to help you manage costs effectively:
- Hiring temporary workers is a great way to meet your operational demands without the long-term financial commitment.
- Take a look at where you could possibly be overspending and make the necessary adjustments to cut these costs. For example, you might consider hybrid or remote working models to save on the cost of your office space.
- Utilising the latest technology to handle repetitive tasks is a great way to reduce the manual workload of your workforce, allowing your team to make more efficient use of their time.
Advice for Candidates
To make the most of the opportunities in 2025, it’s essential for candidates to adopt a strategic approach. Here are three tips to help you stand out:
- Investing in your own upskilling is a brilliant way to acquire new skills and make yourself more appealing to potential employers. There are numerous certifications and online courses you can do to stay competitive in your field.
- Tailoring your CV and cover letter for each job is essential. Make sure to highlight how your specific skills and experiences are relevant to the job you’re applying for as this shows you have genuine interest in the role.
- Networking is a great way to discover new job opportunities. Attending workshops or connecting with industry leaders on LinkedIn is a great way to stay informed.
How Plus One Recruitment Can Help
Are you planning to hire in the New Year? Our Recruitment Team can ensure that only the most suitable people are introduced to your business. We offer a range of services to suit your requirements and budget. Book a Discovery Call today, to meet with one of our friendly team members, who will be happy to discuss how we can support you.
Conversely, if you are looking to start your New Year job search, we would love to support you on your journey. Simply Register with us today, and we’ll be in contact with you to discuss how we can help. Don’t forget to also check out our useful fact sheets and video guides over on our advice page.
