JobsOutlook: Prospect of a jobs comeback in the balance because of tough economic headwinds

The chances of seeing a sustained bounce back in hiring this year is possible but hangs in the balance because of employers’ concerns about the strength of the economy, suggests the latest Recruitment and Employment Confederation (REC) / Whitestone Insight JobsOutlook.

Permanent hiring intentions are a bellwether for the economy. And today’s 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).

And to add 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). And 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. And employers’ confidence in making investment and hiring decisions similarly fell, by 5 points to net: -9 February-April 2025.

REC Deputy Chief Executive Kate Shoesmith said:

“Firms clearly see potential, but they also see risk. 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?

“Getting the Employment Rights Bill right will help. Firms want reassurance that the application of the Bill avoids tying businesses and workers up in greater costs and complexity. 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.”

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.

Notes to editors

JobsOutlook is produced by the REC in partnership with Whitestone Insights. Till October 2024 it was in collaboration with Savanta ComRes, but from November 2024, to improve the sample size and the robustness of the data REC is partnered with Whitestone Insights. 700 UK employers participated via online survey in the JobsOutlook survey, which was conducted between 10^th February 2025 and 22^nd April 2025. Data were weighted to be representative of UK adults in employment by region, broad industry sector and public/private split. Whitestone Insights is a member of the British Polling Council and abides by its rules.

Change in collaborator and the methodology led to minor adjustments in the quarterly data. The adjustments are within the margin of error.