UK employers remain cautious about hiring, with recruitment intentions largely stagnant since spring 2025.
The net employment balance – the difference between employers expecting staffing levels to rise and fall over the next three months – remains at +9, close to its lowest level outside the pandemic, according to the CIPD’s latest Labour Market Outlook.
Only a quarter (26 per cent) of employers expect staffing levels to increase in the coming quarter, while 17 per cent anticipate a decrease, the survey found.
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James Cockett, senior labour market economist at the CIPD and author of the report, said the data suggested the UK labour market had “largely stopped moving”.
“Hiring has weakened, but redundancy levels haven’t risen, leaving us in a ‘low hire, low fire’ environment that’s increasingly looking like a ‘new normal’,” he said.
“A stagnant labour market closes off routes into work for first-time jobseekers, blocks progression for existing employees, and erodes the talent pipeline organisations rely on to refresh skills and support innovation,” Cockett added.
Labour market remains subdued
Despite weaker hiring demand, recruitment challenges persist. Almost a third (31 per cent) of employers report hard-to-fill vacancies, while 14 per cent expect significant recruitment difficulties in the next six months.
The findings also show that most employers expect their workforce to stay the same or shrink in the coming months.
John Palmer, senior advisor at workplace conciliation service Acas, urged organisations to consider the impact of decreasing staff numbers on existing teams.
“Acas would encourage employers to talk to staff, and check team workloads and outputs to ensure staff are not overworked, and the organisation can remain productive,” he added.
Similarly, Daniel Harris, managing director for the UK and Ireland at Robert Walters, said that hiring freezes amid uncertainty put pressure on an organisation’s “capacity” for future growth.
“The organisations that perform best in these conditions don’t put their growth plans on hold to wait for greater clarity. They build caution into their existing strategies, and that’s what we’re seeing from most firms today,” he said.
Meanwhile, separate Recruitment and Employment Confederation (REC) figures point to some improvement in parts of the jobs market. There were 1,669,203 active job postings in July, down 2.6 per cent from June but up 7.7 per cent compared with the same month last year.
Maxine Bligh, the REC’s chief membership and innovation officer, said the seasonal jobs market had started to pick up, helped by warm weather and a run of major sporting, music and cultural events, including the men’s football World Cup.
“It is not totally straightforward for young people to earn wages just yet, with many entry-level jobs still not bouncing back as much as we would like, but there are undoubtedly more opportunities across hospitality, tourism and construction than last year,” she said.
Pay expectations have also remained static. Median expected basic pay increases stand at 3 per cent, where it has remained for more than two years.
The CIPD warned that with inflation expected to rise further, real pay growth could slow and potentially turn negative in the coming months.
For more information, read the CIPD’s report on the changing face of the youth labour market