UK labour market outlook uncertain post budget

According to data from Indeed, the UK’s employment market outlook is uncertain after October’s budget announcement.

The global recruitment platform warned that while the economy in general outperformed the low expectations for this year, the job postings could drop by 24% next year.

The 2025 Jobs & Hiring Trends Report revealed that the UK has seen the biggest decline in new listings compared with other countries like Australia, Canada France Germany and US.

In addition, Given the impending rise of national minimum wages and business rates as well as the increase in employer contributions to national insurance and the lowering threshold, Indeed believes that companies will be more cautious in their recruitment decisions in the coming year.

Fewer job postings

The UK job market has declined in all occupational categories. However, the most notable drop was noted in the electrical engineering, security, and public safety sectors. Only the legal sector out of 48 tracked sectors saw an increase in job postings.

There were also weaknesses in the categories that offered remote working, namely technology roles and some professional categories.

Pay and bonus dip

Data also showed a decline in the number of posts that mentioned a signing incentive, which went from a peak of 2,1% in February to just 1.0% in October.

The Indeed Wage Tracker has found that the pay for postings is now 6.7%, despite the slight drop from the 7% it was in June.

The wage gap between low- and high-paid roles grew by 7.6% versus 6.0%.

Increase in zero-hours contracts

Indeed found that despite the government’s plans to limit them, mentions of zero-hours contracting increased in job advertisements, rising from 1.1% in April to 1.9% in Oct.

These contracts are most common in low-paid jobs, especially in sports, personal care, home health and hospitality.

Increased transparency in pay

The report found that transparency of pay in UK job advertisements has increased over the last five years. In October, nearly three-quarters (72%) included some salary information, as opposed to less than half before the pandemic.

In fact, employers are now more aware of the benefits that pay transparency brings. These include talent attraction as well as recruitment efficiencies gained by matching salaries expectations at an earlier stage.

Demand for remote and hybrid work continues to be high

The study found that remote or hybrid working is still quite high, at 14.6%. This is despite the push to return to the office. This is down from 16,3% in May but still well above the 3% commonly noted before the pandemic.

Even employers who require staff to be present in person are flexible. Vetinary, childcare and education/instruction were among the most common industries with four-day work weeks.

Jack Kennedy, senior economics at Indeed, said: “The UK’s economy performed better than anticipated in 2024 but that doesn’t mean the year 2025 will be a breeze.”

The best-case scenario for most businesses is likely to be slow job creation.

The combination of an increase in employer National Insurance Contributions and a possible soft labour market could impact the pay packets for workers.

The ability to attract top talent is dependent on being competitive in terms of pay and benefits such as flexibility and remote working.

The evidence of the decline in job postings and the decline in signing bonuses, as well as the easing of wage growth, means that the power shifts back to the employers, with the cooling labour market. This will influence the way candidates approach interview and negotiation in the New Year.

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