The 2025 UK labour market shows mixed wage trends, declining postings, and resilience. Workers demand flexibility and transparency, while employers must adapt to evolving workplace behaviors amid uncertainty.
Key Takeaways
- The UK labour market remains relatively tight, with 1.9 unemployed people per vacancy, though job postings are declining, now below pre-pandemic levels—the only major economy showing this trend.
- Wage growth is cooling but remains higher than in the eurozone and U.S. rates, while salary transparency has significantly increased, with most job postings now including pay information.
- Workers increasingly prioritize flexibility and work-life balance, with many willing to forgo promotion for remote work or accept lower pay for unlimited remote flexibility.
The UK job market in 2025 presents a mixed picture of stability and transformation. These insights can guide employers through the evolving economic landscape.
1. The UK Labour Market Remains Tight But Job Postings are Down
While the UK maintains a relatively tight labour market with 1.9 unemployed people per vacancy, job vacancies declined over the past year, reaching 812,000 from October to December 2024, yet remain slightly above pre-pandemic figures. In the first quarter of 2025 (January to March), the UK saw approximately 816,000 job vacancies.
Meanwhile, job postings declined below pre-pandemic levels. This drop is likely driven by rising employment costs—including increased employer National Insurance contributions and a higher minimum wage taking effect in April—alongside growing global economic uncertainty amid escalating trade tensions. The UK is the only major economy where this trend has taken hold, reflecting growing employer caution and economic uncertainty.
2. UK Wage Growth is Cooling But Still Outpaces Europe and the U.S.
UK wage growth is cooling, hitting a three-year low of 5.7% in February, though still above the eurozone (2.5%) and U.S. (3.1%). ONS data supports the trend, with average earnings at 5.8% and this year’s National Living Wage rise (6.7%) smaller than last year’s 9.8%. If wage moderation continues, the Bank of England may cut interest rates more aggressively, offering relief to businesses facing high costs and weak productivity.
3. Salary Transparency is Becoming the Norm
Salary transparency has grown sharply, with 72% of job postings now including pay info, up from 47.7% in 2019. Meanwhile, signing bonuses have declined from 2.1% in 2023 to 1% in late 2024, as companies prioritize boosting base pay—especially for hourly workers. Despite progress, the gender pay gap persists, with full-time women earning 15% less than men on average.
Employers should prioritize salary transparency and highlight pay equity initiatives in their employer branding to attract a more diverse talent pool.
4. UK Workers Demand More Flexibility than Ever
Flexible work continues to shape the UK job market, with 15.8% of job postings now offering flexible arrangements and over 200 businesses having permanently adopted a four-day workweek. Remote roles remain in high demand, with searches nine times above pre-pandemic levels. A CV Genius survey found that 53% of workers would give up a promotion for remote work, 51% would take lower pay for full flexibility, and 30% of those returning to the office due to mandates would start job hunting immediately. Employers enforcing in-office policies may need to offer strong workplace benefits to retain talent.
Source: Indeed
5. Redundancies Aren’t Rising Despite Employer Pessimism
Despite ongoing concerns that rising labour costs could trigger widespread layoffs, current evidence doesn’t support this. While employer confidence surveys have weakened and business sentiment remains pessimistic, government data on planned redundancies shows no significant increase, indicating no signs of impending mass layoffs.
6. UK Labour Shortages Persist in Key Industries
Due to visa restrictions, labour shortages persist in blue-collar roles, heavily impacting industries like logistics, manufacturing, and skilled trades. While overall pay growth is starting to slow, wage gains for blue-collar workers have been notable, with the National Living Wage rising over 75% in the past six to seven years.
In 2024, the number of job seekers per vacancy rose to 2.05, indicating a slightly looser labour market that could make some roles easier to fill. However, declining net migration may affect industries reliant on international workers.
Despite the UK’s skills gap narrowing in 2025, shortages persist in IT, data, engineering, sales, and customer-facing roles. In general though, white-collar candidate availability is higher, making hiring more affordable. Talent supply for white collar workers may grow even further into 2025 if unemployment ticks up due to businesses adjusting for higher costs related to National Insurance contributions, increased minimum wage, and global economic uncertainty.
Employers should emphasize competitive benefits, job stability, and career growth opportunities to attract and retain talent in these sectors.
Source: Adzuna
7. UK Job Seekers Prioritize Simplicity and Transparency
Job seekers have clear expectations regarding the hiring process. Three-quarters of candidates avoid roles that do not list a salary range and are more likely to complete applications that take less than 10 minutes. Similarly, 74% expect updates at every stage of the hiring process, and 58% prefer applying via mobile devices.
To avoid high candidate drop-off rates, employers should ensure that job postings include salary details, streamline applications to be mobile-friendly, and use automated tools to provide candidates with real-time updates.
Source: Total Jobs
8. Workplace Culture and DEI Matter, Especially to Gen Z
UK job seekers value job security, fair hiring, and career alignment, with Gen Z focusing on salary, flexibility, and growth. Half of workers expect employers to promote diversity, equity, and inclusion. To attract talent—particularly Gen Z and Millennials—job postings should highlight career progression, workplace flexibility, and an inclusive culture.
Source: CV Genius
9. UK Workers are Moving Jobs Less Often
Workers are changing jobs less frequently, as shown in the chart below. This trend is influenced by several factors, including complex hiring processes that deter candidates due to multiple interview rounds and presentations. Economic uncertainty also plays a role, with 71% of workers hesitating to switch jobs because of concerns over job security. Additionally, many workers who value flexibility are reluctant to sacrifice hybrid or remote work arrangements, further contributing to the job-switching decline.
To attract talent, employers should simplify application processes, emphasize job stability, and promote workplace flexibility as a key benefit.
Source: Statista
10. New Work Behaviours Shape the Future of Employment
Shifting workplace attitudes toward work-life balance, loyalty, and productivity drive new employment behaviors, as the Future of Work survey highlights. A notable trend is "Resenteeism," where 64% of employees remain in jobs they dislike due to a lack of better opportunities. Many workers, 63%, also engage in "career cushioning," quietly searching for other jobs in case of layoffs. More than half, 59%, practice "Bare Minimum Mondays," easing into their tasks at the start of the week to reduce burnout.
Additionally, 50% of employees admit to practicing "Fauxtivity," appearing busy but accomplishing little, while 58% practice "Quiet Quitting," doing only the bare minimum. Meanwhile, 23% of employees confess to working multiple remote jobs without informing their employers, and 18% have accepted job offers but failed to show up on their first day.
Source: CV Genius
The UK job market in 2025 is full of contradictions, thriving in some spots but feeling the pressure in others. As workers demand more from employers—greater flexibility, fairness, and transparency—businesses that adapt quickly will be better positioned to attract and retain quality talent in this evolving landscape.
---
Contact Recruitics today for data-driven recruitment strategies tailored to your industry's challenges and opportunities.
