UK businesses are cutting back on hiring plans amid a surge in labour costs and growing economic uncertainty, with employment confidence falling to its lowest level in over a decade outside of the pandemic, new research reveals.
According to the Chartered Institute of Personnel and Development (CIPD), the net hiring outlook — the difference between employers expecting to increase staffing and those anticipating cuts — has fallen to just 8, the weakest since 2014 excluding pandemic years. The figure stood at 13 last quarter.
The slowdown is most evident among large private-sector companies and retailers, though public-sector hiring — particularly in education — is also under strain. Just 32 per cent of private-sector firms said they expected to add staff over the next three months, while 24 per cent of all employers surveyed said they were planning redundancies.
Separate figures from KPMG and the Recruitment and Employment Confederation (REC) paint a similarly downbeat picture. Their latest labour market report for April shows declining demand for both permanent and temporary staff, alongside a rising number of jobseekers. Recruitment agencies reported an uptick in candidate supply, driven by restructuring, redundancies, and an overall drop in new hiring.
The south of England recorded the sharpest drop in permanent placements, while London fared slightly better with the softest decline. Engineering was the only sector to see an increase in demand for permanent staff. In contrast, vacancies fell sharply in nursing, retail, and hospitality — with temporary staff demand down across all ten tracked industries.
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