The UK job market is going through a bit of a shift right now, and the latest data from the KPMG and REC UK Report on Jobs for June 2025 offers some interesting insights. If you’re a business trying to hire or a job seeker looking for your next opportunity, the trends highlighted in this report can help guide your strategy. Here’s a breakdown of what’s happening in the job market and what it means for both sides.
1. Hiring Slows Down as Economic Uncertainty Looms
The report points to a noticeable dip in hiring activity, with permanent job placements falling at the fastest rate in almost two years. Companies are holding back due to worries about the economy, cost pressures, and the future outlook.
For employers, this means it’s a good time to focus on refining your recruitment process, making sure you’re attracting the best talent without rushing things. With hiring slowing down, you have the chance to be more selective and thoughtful about your hires, which is a win in a competitive market.
For job seekers, things are a little tougher. Fewer permanent roles are available right now, so it’s important to stay flexible. If you’re open to temporary or contract work, this could still be a great way to get your foot in the door, especially in certain sectors like Construction, Engineering, and Healthcare, where vacancies are holding steady.
2. More Candidates on the Market: What This Means for Employers
On a more positive note, there’s a significant increase in the availability of candidates. The labor supply has risen at the fastest rate since November 2020, meaning employers have more options to choose from. This is largely due to layoffs and fewer companies hiring, but it’s also an opportunity for businesses to snag great talent without needing to rush their decisions.
For employers, this is your chance to be picky! You can take your time with hiring, ensuring that the talent you bring in is the perfect fit for your team. But be careful not to miss out on top candidates—when the market shifts, things can change quickly.
For candidates, the increased competition might make it harder to land your dream job, but it’s not all bad news. With more opportunities available, you’ve just got to be strategic. Tailor your applications, stay open to new types of roles, and keep a positive mindset. Flexibility is key!
3. Pay Growth Slows: Is This Good or Bad?
Another key finding from the report is that pay growth for both permanent and temporary roles is slowing down. Starting salaries and wages for temporary positions are still growing, but at a much slower pace than usual.
For employers, this could be an opportunity to manage budgets while still attracting talent. While salary increases might be modest, you can balance this with other perks or benefits, like flexible working arrangements or development opportunities.
For job seekers, it’s important to keep expectations in check. Pay may not be growing as quickly as before, but consider the overall value of a role—things like career progression, company culture, and work-life balance matter too. It’s not all about the salary, especially when you’re building for the future.
4. Regional Differences: Hiring Trends Vary Across the UK
The data also shows that some regions are feeling the slowdown more than others. For example, hiring activity in the South of England has taken a bigger hit, while areas in Construction and Engineering are still seeing some growth.
For employers, it might make sense to shift your focus toward areas or sectors that are still experiencing demand. If you’re in a region where the market is slower, this could be the perfect time to reassess how and where you’re looking for talent.
For job seekers, consider broadening your search to include different regions or industries. Some parts of the country and certain sectors are seeing more activity, so keep your options open!
5. Sector-Specific Insights: Where the Jobs Are
Different sectors are feeling the effects of the current job market in different ways. Retail, for example, has seen a significant drop in demand for permanent staff, while Construction and Engineering are seeing some growth.
For employers, it’s clear that certain industries are still thriving, while others are more sluggish. If you’re hiring in sectors like Retail or Secretarial/Clerical, it might be a good idea to focus on adaptability, while industries like Construction or Healthcare still offer more opportunities for new hires.
For candidates, this means it’s important to be flexible in your job search. If you’re in a sector with fewer opportunities, it may be worth exploring industries that are still seeing hiring growth, like Engineering, Logistics, or Healthcare.
6. Looking Ahead: What’s Next for Hiring?
So, what does the future hold? The report highlights some uncertainty, with global challenges continuing to impact the overall economic outlook. But there’s still hope on the horizon—government initiatives in construction and infrastructure could provide a boost to certain industries, and this may help create new job opportunities in the second half of the year.
For businesses, it’s all about planning ahead. While the current market is slower, it won’t stay this way forever. Investing in talent now, especially in industries with a solid outlook, can set your business up for success when the market improves.
For job seekers, the key is to stay informed and adaptable. Look for opportunities in sectors that are still hiring, and keep building skills that will make you stand out when demand picks up again.
The UK job market in 2025 is definitely in a period of transition, but with the right approach, both employers and job seekers can navigate these changes successfully. By staying flexible, keeping an eye on industry trends, and being strategic about opportunities, everyone can find a way to thrive in a changing landscape.
Source: KMPG https://kpmg.com/uk/en/media/press-releases/2025/07/kpmg-and-rec-uk-report-on-jobs-july.html