Marvin OnumonuUK hiring demand fell to its lowest level in years, with employers reporting a net employment outlook of +11%, according to the latest ManpowerGroup Employment Outlook Survey.
Research found the UK recorded the sharpest drop in planned hiring globally, down 17% year-on-year and 8% on the quarter.
Petra Tagg, director at ManpowerGroup UK, said: “The UK economy has stalled and with it so has hiring.
“The labour market has been moving at an almost glacial pace for months and while there remains some movement in roles for the highly skilled, we’re very far off the +30% hiring Outlooks we saw in early 2022.
“Employers are weighing recruitment investment against the need to drive efficiency through AI and automation.”
Tagg added: “What’s needed now is a corrective course of action – relief on employment costs, clarity on policy timelines and bold investment in long-term infrastructure and pragmatic innovation.
“The first half of 2025 showed that entry-level hiring was falling as firms reached for AI to take on routine tasks.
“Our latest survey shows this demand will stabilise again towards the end of the year and will make up 61% of all hiring.”
She said: “Employers are on a sharp learning curve, and are reimagining the value of the emerging workforce, not as ‘cheap labour’, but as digitally fluent candidates who can seamlessly integrate with AI and help plug skills gaps.
“Competence is currency in today’s job market. It’s an employer’s market; candidates who bring the right skills match will be in a strong position to negotiate and shape their career paths.”
She added: “Managers, meanwhile, facing headcount restrictions, are scrutinising ways they can maximise productivity with existing talent and resources.
“But this pressure can lead to less transparent recruitment processes.
“Employers can’t slack – reputations are maintained just as much in downturns as in times of growth.”
Information technology remained the best performing sector, followed by financials and real estate.
Consumer goods and services and industrials and materials posted the steepest annual declines, while Government roles stayed the weakest.
Energy and utilities saw the biggest quarterly growth, linked to ongoing discussions about energy bills and relief schemes.
Tagg said: “It’s a tough outlook for the UK at the moment. Whereas last year the same pressure was being felt across Europe, this year the UK labour market is steering its own course, and it’s unlike one we’ve faced before.
“A new market predicament is an opportunity for organisations to evolve and become more efficient; by focusing on productivity and the strategic development of talent, businesses can weather uncertainty, attract high-quality candidates and position themselves for long-term success.”
