Review of the UK Jobs Market – February 2025

Welcome to our Review of the UK Jobs Market for February. Each month, we share market insight on the state of the UK jobs market.

You can either read our short blog, or see our infographic.

The main findings were:

• Softer deterioration in recruitment activity
• Starting salary inflation weakens to four-year low
• Availability of workers increases at quicker pace
• Demand for staff continues to fall rapidly

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Staff Appointments

February signalled a sustained decline in billings from the employment of short-term staff. Temp billings have now fallen in each of the past eight months. The latest reduction was driven by weaker demand for staff, tighter client budgets and the non-renewal of temp contracts.

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Vacancies

Demand for staff continues to weaken in February

February data pointed to slightly softer, but still substantial declines in demand for both permanent and temporary workers. Permanent vacancies fell at a sharper pace than that seen for temp roles, with the respective index posting in contraction territory for 18 months in a row. Concurrently, demand for short-term staff fell for the seventh straight month.

The latest official data from the Office for National Statistics (ONS) indicated that there were 819,000 vacancies across the UK in the three months to January. This was 110,000 less than that recorded the same period a year ago. Furthermore, the data signalled that vacancies have settled at a level that is over one-third (37.2%) below the post-pandemic peak (1,304,000 in the three months to May 2022).

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Staff Availability

Slowest increase in staff availability for nearly a year

There was a sharp and accelerated upturn in the availability of candidates for permanent roles during February. Permanent staff supply has now increased in each month of the past two years, with the latest expansion slightly quicker than the average seen over this period. Redundancies and a lack of job opportunities had increased the pool of available workers.

The availability of short-term/contract workers also increased at a quicker pace midway through the first quarter. Notably, the rate of growth edged up to a four-month high and was among the steepest seen over the current two-year sequence of expansion. Company lay-offs and fewer short-term roles had pushed up the supply of temp workers, according to recruiters.

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Pay Pressures

There was a softer rise in starting salaries for permanent staff for the second straight month in February. Notably, the latest increase was the slowest seen over the current four-year period of inflation and only modest. Where higher salaries were reported, this was generally linked to an increase in market rates and efforts to attract skilled candidates.

Source: KPMG and REC UK Report on Jobs 10th March 2025