UK employers are postponing hiring decisions, with 42% planning no changes to their workforce for Q2 2025, according to the ManpowerGroup Employment Outlook Survey.
The survey, an economic indicator for the Bank of England and the UK Government, highlights employers’ cautious approach amid impending tax increases.
An additional 11% of organisations remain uncertain about future staffing levels.
Of those expecting changes, planned hiring is down 27% for the quarter, as businesses assess the impact of upcoming cost increases.
This trend suggests the UK’s hiring recession may persist until summer 2025, according to the survey.
ManpowerGroup managing director Michael Stull said: “With less hiring taking place, many employees are understandably reluctant to consider changing roles. Given this, employers must prioritise workforce optimisation and internal mobility.
“Offering opportunities to upskill and finding ways to keep teams motivated and energised will drive much-needed productivity during this period of stagnation.
“The Government’s vast policy changes announced in the Autumn budget will be coming into effect in Q2. This means the hiring recession we have been experiencing looks set to continue until the impact is fully realised by cautious business leaders.
Employers are advised to focus on productivity, treating their workforce as they would in an economic downturn.
Businesses that optimise operations now may be better positioned when the economy improves, Stull said.
The Energy & Utilities sector shows the most movement, with 27% planning no headcount changes, followed by IT (35%) and finance & real estate (37%).
Industries such as industrials and materials, real estate, and transport and logistics forecast net positive hiring changes, defying the overall trend.
Stull added: “Looking forward, it is great to see some glimmers of positivity in the UK’s energy, utilities and real estate sectors. These are where we hope to see growth, especially when the economy is flat, as it would signal investment is coming back into the country.”
Public sector recruitment is also rising, raising questions about the impact of increased national defence spending and housebuilding plans on private sector businesses.
The ManpowerGroup executive concluded: “For the time being, economic uncertainty and cost pressures remain a real issue for many employers as the negative sentiment, alongside flat consumer spending and growing insolvencies all adds to a sense there is only so much more they can do.
“It is likely they will continue to hold tight until we have seen the full impact of next month’s tax rises. Therefore, we urge those who can, to navigate the uncertainty and find new solutions to drive productivity and efficiencies. They will likely reap the rewards later in the year when it is hoped the market will stabilise and improve.”
In February 2025, Prospero.Ai warned that the job market outlook for 2025 is “bleak” amid the rise of silent firing.
