The Recruitment Slowdown: What’s Happening in the UK Job Market?

The UK recruitment industry, which up until recently was riding the wave of post-pandemic recovery, now faces a much rougher journey.

As we close out 2024, the sector is grappling with a mix of economic uncertainty, slower hiring, and cautious business behaviour.

It’s clear that businesses are taking a more conservative approach, while jobseekers are hesitant to make bold moves.

So, where do things stand, and what’s next?

Job Postings and Placements: What’s Going On?

Following the post-pandemic hiring boom, the UK is now seeing a noticeable slowdown in job postings and placements.

Recent data from the Recruitment & Employment Confederation (REC) paints a clear picture—both permanent and temporary hires are down. The drop is especially pronounced in fields like IT, finance, and education.

In fact, according to their Labour Market Tracker, job adverts peaked in mid-2022, only to drop sharply throughout 2023. While we’ve seen a slight recovery in 2024, the numbers are still nowhere near where they were before.

This slump reflects the broader hesitancy among companies to hire and candidates to move.

Different Sectors, Different Stories

Not every part of the job market is struggling in the same way. Some sectors, like logistics and nursing, are doing relatively well. Job postings for large goods vehicle drivers, for example, jumped by 13.2% between June and July 2024​.

However, sectors like education have been hit hard, with roles like primary school teachers seeing a sharp drop of 8.8% in job adverts during the same period.

Regionally, London is faring better than other parts of the country, particularly the South and parts of the North, which are seeing much slower growth​

London’s professional services sector is giving it a bit of an edge, but even there, the recovery is shaky.

How Recruitment Firms Are Coping

Recruitment agencies themselves are feeling the heat. Hays, one of the largest recruiters in the UK, recently announced a 90% plunge in profits—a stark reminder of how tough things are.

It’s not just Hays; other major players like Robert Walters and Pagegroup are also struggling with significant drops in both profits and job placements.

To adapt, these companies are cutting costs, including significant layoffs. Hays and Pagegroup have each reduced their workforce by about 15% in the last year. Smaller agencies are even worse off, with a rising number of recruitment firm insolvencies​.

Many smaller firms, unable to cope with the downturn, have been forced to shut their doors.

Looking Ahead: What Can We Expect?

The short-term outlook for the recruitment industry isn’t great. Businesses are cautious, jobseekers are holding off on big moves, and the economy remains a question mark. 2024 will likely see continued slow growth, with both job postings and placements staying relatively low​.

However, there’s some hope for 2025. Economic forecasts suggest that things could start looking up by next year, with business confidence expected to pick up​.

If that happens, we could see companies ramping up their hiring efforts, and recruitment agencies that have managed to weather the storm may be among the first to benefit from an improving job market.

Right now, the UK recruitment industry is in a tough spot. Economic uncertainty, rising operational costs, and cautious hiring behaviours have created a challenging environment for businesses, jobseekers, and recruiters alike. But if firms can adapt and stay resilient through these turbulent times, with any luck, 2025 might bring the growth and stability we’re all hoping for.