Signs of an uptick in recruitment this year have been revealed, new research reveals, but businesses remained cautious over the economic outlook.
According to the latest JobsOutlook from the Recruitment and Employment Confederation (REC) and Whitestone Insight, a sustained bounce-back in hiring this year remained possible. However, employers still had significant concerns about the strength of the economy.
The JobsOutlook showed that the short-term permanent hiring outlook, for the next three months, had improved by three points (to net +9) in the three months to April. The medium-term hiring outlook, for the next four to 12 months, improved by four percentage points in the three months to April (+9).
Labour market trends
Budget costs lead to lower 2025 pay awards
The balance of sentiment towards short-term use of temporary workers was restored to positivity this quarter – up three percentage points to net +3, with an uptick to net +5 in the last month (April 2025).
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 (to net +14).
According to the REC, this was grounds for optimism for immediate recruitment, such as summer seasonal hiring this year, as well as encouraging news for school leavers and graduates looking to enter the workforce after their exam results.
But it cast doubt on whether this would be grounds for a significant jobs market comeback because of employers’ negativity about the economy, with fears over the cost implications of the government’s Employment Rights Bill weighing heavily in some quarters.
Across February-April, 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. And employers’ confidence in making investment and hiring decisions similarly fell, by 5 points to net -9 for February-April.
REC deputy chief executive Kate Shoesmith said businesses could see potential, but also 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?”
She added that reforms to the Employment Rights Bill, and the emphasis on using apprenticeship funds effectively announced this week, would help to keep the job pipelines working.
London was markedly more optimistic about hiring than other regions, noted Shoesmith. “It is hoped that London will prove a bellwether for the job market as it has in the past,” she said.
Optimism in London on permanent hiring for the next three months was robust, the report found. It moved 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 – stood out. 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 of firms’ intention to hire temporary workers in the short and medium term, the REC stated.
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
Latest HR job opportunities on Personnel Today
Browse more human resources jobs
