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Summer 2025
OUTLOOK
VIEWS FROM EMPLOYERS
LABOUR MARKET
The CIPD has been championing better work and
working lives for over 100 years. It helps organisations
thrive by focusing on their people, supporting our
economies and societies. It’s the professional body for
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independent thought leadership. It’s a leading voice in
the call for good work that creates value for everyone.
1
Report
Labour Market Outlook
Summer 2025
Contents
1 Foreword from the CIPD 2
2 Key points 3
3 Recruitment and redundancy outlook 4
4 Job vacancies 13
5 Pay outlook 17
6 Recommendations for employers and people practitioners 19
7 Survey method 19
8 Appendix 21
Publication information
When citing this report, please use the following citation:
Cockett, J. (2025) Labour Market Outlook – summer 2025. London: Chartered Institute
of Personnel and Development.
Labour Market Outlook Summer 2025
2Foreword from the CIPD Key points
Foreword from the CIPD
The quarterly CIPD Labour Market Outlook (LMO) provides an early indication of future
changes to the labour market around recruitment, redundancy and pay intentions. The
findings are based on a survey of more than 2,000 employers.
Business confidence remains at an unprecedented low, outside of the pandemic. Our
net employment balance stands at +9, little changed on the +8 recorded last quarter.
Hiring intentions among private sector firms also remain at a record low, outside of the
pandemic. Just 57% of private sector employers plan to recruit staff in the next three
months, down from 65% in autumn 2024. Policy changes from the government’s first
year in office are reflected in our data. The increase in the rate of employer National
Insurance and the lowering of the secondary threshold has had the same impact on costs
as expected when they were first announced. These changes have disproportionately
impacted lower-paying industries, and those hiring staff working fewer hours, due to the
concurrent rise in the National Minimum Wage and National Living Wage (NMW/NLW).
Policy-makers should be particularly concerned about the impact on young people.
While employers don’t pay National Insurance contributions (NICs) for workers under
21 or apprentices under 25, those who hire them were more likely to report that their
employment costs have risen significantly.
The public sector net employment balance remains below zero at −6. There has also
been a fall in the proportion reporting hard-to-fill vacancies, coupled with a rise in
those reporting no vacancies among public sector employers in the latest quarter. The
government has outlined its plans for a leaner public sector. One example is the merger
of NHS England and the Department for Health and Social Care, with NHS England
currently subject to a recruitment freeze. There have also been announcements around
digitalisation, defaulting communications regarding health through the NHS app, and
embedding artificial intelligence (AI) as part of day-to-day working in the public sector.
All factors point to reduced hiring plans.
The government’s white paper Restoring control over the immigration system, published
in May, and the sudden enforcement of new rules in July to end overseas recruitment in
social care, have had a marked impact on the sector. This quarter, the net employment
balance in social care fell sharply from +23 to −2. Other changes, including the raising
of the skills and salary thresholds for workers from overseas, are likely to affect many
employers. The complexity of the system has not been helped by the introduction of
a new and haphazardly put together temporary shortage list, which allows employers
to continue to hire workers at the lower skills threshold. These
occupations are said to be based on the eight high-growth
industries, identified in the new industrial strategy. While not an
exact mapping, employment intentions are positive in all these
areas within our data.
Overall, pay intentions remain at 3% for the year ahead,
unchanged over the past five quarters. This now sits below the
latest inflation figure of 4.1%, if you include housing costs, as the
cost of living continues to play on employees’ minds.
Read on for our latest labour market data and analysis on employers’
recruitment, redundancy and pay intentions this summer.
James Cockett, CIPD
Senior Labour Market
Economist
1
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
3
Foreword from the CIPD Key points
2Key points
• The net employment balance – the difference
between employers expecting there will be an
increase in staff levels and those expecting there
will be a decrease in the next three months –
remains stable this quarter at +9. However, this
remains an unprecedented low, outside of the
pandemic.
• Employment intentions in the public sector
remain below zero and have fallen from −4 last
quarter to −6 this quarter. This means more
public sector employers expect staff numbers
to decrease rather than increase over the next
three months.
• 84% of employers report their employment
costs have increased due to rises in employer
National Insurance contributions (NICs). A
third (32%) report that these changes have
increased their costs to a large extent. The
National Insurance changes are reported as
the largest cost pressure by employers over
the last 12 months.
• The level of public sector employers currently
reporting hard-to-fill vacancies has fallen
significantly from 44% last quarter to 34% this
quarter. Half (49%) of public sector employers
currently have no vacancies or are unsure if
they have any vacancies, up from 40% last
quarter.
• The median expected basic pay increase
remains at 3% overall, and in both the public
and private sectors.
NICs cause significant rise
in employment costs
Public sector expects staff decrease
£
3
%
Median expected basic pay
increase remains at 3%
+21
+13
+8 +9
Net employment balance
Autumn
2024
Winter
2024/25
Spring
2025
Summer
2025
Hard-to-fill vacancies
have decreased
NO VACANCIES
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
4
Recruitment and
redundancy outlook
The net employment balance – the difference between employers expecting there
will be an increase in staff levels and those expecting there will be a decrease in
staff levels in the next three months – has remained stable this quarter at +9. This,
however, remains an unprecedented low, having fallen to +8 last quarter – the lowest
figure on record apart from during the first year of the pandemic.
Employer confidence remains low as businesses lick their wounds following a period
of rising costs, including the tax rises which have come into effect from April. While
news may have quietened around the ‘Trump tariffs’, the impact on UK exports to the
US was evident, with a fall from £6.1bn in March 2025 to just £4.1bn in May 2025.1
Employment intentions in the public sector remain below zero and have fallen
from −4 last quarter to −6 this quarter. This means more employers in the public
sector expect a decrease than an increase in staff levels over the next three months.
Employment intentions remain stable in the private sector at +12. Last quarter the net
employment balance had fallen to +11, a record low for the private sector (outside of
the early stages of the pandemic) since we began collecting this measure in 2014.
Net employment balance remains low
Figure 1: Net employment balance, by broad sector
–25
–35
–15
–5
5
0
15
25
35
45
Spring 2014
Summer 2014
Autumn 2014
Winter 2014/15
Spring 2015
Summer 2015
Autumn 2015
Winter 2015/16
Spring 2016
Summer 2016
Autumn 2016
Winter 2016/17
Spring 2017
Summer 2017
Autumn 2017
Winter 2017/18
Spring 2018
Summer 2018
Autumn 2018
Winter 2018/19
Spring 2019
Summer 2019
Autumn 2019
Winter 2019/20
Spring 2020
Summer 2020
Autumn 2020
Winter 2020/21
Spring 2021
Summer 2021
Autumn 2021
Winter 2021/22
Spring 2022
Summer 2022
Autumn 2022
Winter 2022/23
Spring 2023
Summer 2023
Autumn 2023
Winter 2023/24
Spring 2024
Summer 2024
Autumn 2024
Winter 2024/25
Spring 2025
Summer 2025
Net employment balance
Quarter
Base: summer 2025, all employers (total: n=2,018; private: n=1,500; public: n=326; voluntary: n=192).
9
12
–6
7
Total
Voluntary sector
Public sector
Private sector
1 Oce for National Statistics. (2025) UK trade: May 2025.
Recruitment and redundancy outlook
3
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
5
As with last quarter, 25% of employers expect their staff levels to increase in the
next three months. The proportion of surveyed employers expecting a decrease in
staff levels is 16%, matching the figure from winter 2024/25. Roughly half (53%) of
all employers believe their staff levels will be maintained in the next three months
(see Figure 2).
Employment intentions show little change
Figure 2: Composition of employment intentions (%)
Increase total staff level Maintain total staff level Decrease total staff level Don’t know
40
50
70
80
90
100
60
0
10
20
30
Autumn 2020
Winter 2020/21
Spring 2021
Summer 2021
Autumn 2021
Winter 2021/22
Spring 2022
Summer 2022
Autumn 2022
Winter 2022/23
Spring 2023
Summer 2023
Autumn 2023
Winter 2023/24
Spring 2024
Summer 2024
Autumn 2024
Winter 2024/25
Spring 2025
Summer 2025
Composition of employment intentions (%)
Quarter
Base: summer 2025, all employers (n=2,018).
24 27
36 40 43 43 42 41 39 38 37 36 35 33 30 31 32 29 25
44
50
50 46 45 47 46 47 46 47 49 51 51 52 55 51 52
50
52
25
15
98666710 10 10 8910 11 12 11 16 18
25
53
16
7766656455455455555 5
Twenty-nine per cent of large private sector organisations and 24% of private sector
small and medium-sized enterprises (SMEs) say they expect their staff levels to
increase in the next three months. This is significantly higher than the rate recorded
in the public sector (18%). Instead, one in four (25%) public sector employers expect
a fall in staffing levels over the next three months. This is at a higher rate than both
large private sector organisations (17%) and SMEs (12%). The public sector figure is
unchanged from last quarter.
Recruitment and redundancy outlook Recruitment and redundancy outlook
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
6
One in four public sector employers expect staff levels to fall
Figure 3: Composition of employment intentions, by broad sector (%)
The net employment balance is now below zero in several industries. It is lowest
among public administration and other public sector employers (−12). There is a
negative net employment balance in both education categories. It is −8 among
employers in compulsory education, which includes primary and secondary
education, and −4 among non-compulsory education, which includes vocational
and higher education institutions. The government’s initial announcement,2 and
subsequent enforcement, of ending overseas recruitment for social care has had a
marked impact on the net employment balance in this industry, which has fallen
from +23 last quarter to −2 this quarter.
At the same time, the government has set out its priorities for growth as part of its
industrial strategy.3 As part of this it has identified eight high-growth industries. While
not an exact mapping, employment intentions are positive in all these areas.
2 GOV.UK (2025) Overseas recruitment for care workers to end. 11 May.
3 GOV.UK (2025) The UK’s modern industrial strategy. London: Department for Business and Trade.
Recruitment and redundancy outlook
20
10
30
40
50
60
70
80
90
100
Increase total staff level
Maintain total staff level
Decrease total staff level
Don’t know
0
Sector and employer size
Private sector large Public sectorPrivate sector SME
Base: summer 2025 (private sector large (250+): n=498; private sector SME: n=1,002; public sector: n=326).
Composition of employment intentions (%)
49
29
17
5
59
24
12
5
51
18
25
6
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
7
Employers expect sta levels to fall in several industries
Figure 4: Net employment balance, by industry (%)
–5 30252015 355 10–10–15
30
28
15
14
12
12
11
10
10
10
8
5
4
1
–2
–4
–8
–12
0
Other professional, scientific
and technical activities
Information and communication
Legal, accounting, consultancy and
activities of head offices
Retail
Arts, entertainment and recreation
Construction
Administrative and support service
activities and other service activities
Human health activities
Manufacturing
Transport and storage
Voluntary
Hotels, catering and restaurants
Finance and insurance
Wholesale and real estate
Care, social work and other
healthcare activities
Non-compulsory education
Compulsory education (including
pre-primary)
Public administration and other
public sector
Industry
Net employment score
Base: industries with base sizes less than 50 have been excluded. For a breakdown of base sizes, see Table 5.
Recruitment
Hiring intentions among private sector firms also remain at a record low, outside of
the pandemic. Just 57% of private sector employers plan to recruit staff in the next
three months, down from 65% in autumn 2024. Sixty-one per cent of employers
plan to recruit in the next three months, unchanged from the spring quarter, but
significantly lower than the 67% recorded in autumn 2024. Recruitment intentions
remain highest in the public sector, with 77% planning to recruit in the next three
months. (see Figure 5).
Recruitment and redundancy outlook Recruitment and redundancy outlook
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
8
Recruitment intentions remain stable
Figure 5: Recruitment intentions, by broad sector (%)
Quarter
% of employers planning to recruit in the next three months
40
30
50
60
70
80
90
61
57
77
65
Autumn 2016
Winter 2016/17
Spring 2017
Summer 2017
Autumn 2017
Winter 2017/18
Spring 2018
Summer 2018
Autumn 2018
Winter 2018/19
Spring 2019
Summer 2019
Autumn 2019
Winter 2019/20
Spring 2020
Summer 2020
Autumn 2020
Winter 2020/21
Spring 2021
Summer 2021
Autumn 2021
Winter 2021/22
Spring 2022
Summer 2022
Autumn 2022
Winter 2022/23
Spring 2023
Summer 2023
Autumn 2023
Winter 2023/24
Spring 2024
Summer 2024
Autumn 2024
Winter 2024/25
Spring 2025
Summer 2025
Base: summer 2025, all employers (total: n=2,018; private: n=1,500; public: n=326; voluntary: n=192).
Total
Voluntary sector
Public sector
Private sector
Redundancies
Twenty-three per cent of employers are planning to make redundancies in the three
months up to October 2025 (see Figure 6). This overall rate has not significantly
changed compared with the last two quarters (25% in winter 2024/25, and 24%
in spring 2025). There is little difference in the proportion of employers planning
redundancies between the private, public and voluntary sectors.
Recruitment and redundancy outlook
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
9
Overall, redundancy intentions stay the same
Figure 6: Redundancy intentions, by broad sector (%)
Quarter
5
20
15
10
0
25
30
35
40
22
23
23
22
Autumn 2016
Winter 2016/17
Spring 2017
Summer 2017
Autumn 2017
Winter 2017/18
Spring 2018
Summer 2018
Autumn 2018
Winter 2018/19
Spring 2019
Summer 2019
Autumn 2019
Winter 2019/20
Spring 2020
Summer 2020
Autumn 2020
Winter 2020/21
Spring 2021
Summer 2021
Autumn 2021
Winter 2021/22
Spring 2022
Summer 2022
Autumn 2022
Winter 2022/23
Spring 2023
Summer 2023
Autumn 2023
Winter 2023/24
Spring 2024
Summer 2024
Autumn 2024
Winter 2024/25
Spring 2025
Summer 2025
% planning redundancies in the next three months
Base: summer 2025, all employers (total: n=2,018; private: n=1,500; public: n=326; voluntary: n=192).
Total
Voluntary sector
Public sector
Private sector
Employer costs
In our winter 2024/25 LMO report, we highlighted the potential impact of the
National Insurance changes and the usual increases in the minimum wage on
employment costs. In that report we found almost nine in 10 employers believed
their employment costs would increase because of the increase in the employer rate
of NICs (89%) and the reduction in the ‘secondary threshold’ (87%).
This quarter we find that has largely borne true, with 84% reporting their
employment costs have increased due to changes to National Insurance
contributions in April 2025. However, the changes may not have been as severe as
first thought. Prior to the changes coming to effect, around four in ten believed their
employment costs would increase to a large extent because of the increase in the
employer rate of NICs (43%) and the reduction in the ‘secondary threshold’ (40%). Due
to the changes, only 32% now say their employment costs have increased to a large
extent – less than had originally anticipated significant increases.
Despite this, there are some industries that have been hit hard by these increased
costs. Half of employers in care and hospitality report that their employment costs
have increased to a large extent due to these changes.
In all industries except IT, other professional services, and arts and recreation, at
least 60% of employers report that National Insurance changes have increased their
employment costs to some extent.
Recruitment and redundancy outlook Recruitment and redundancy outlook
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
10
National Insurance changes have impacted the costs of all businesses
Figure 7: Impact of National Insurance rises on employment costs, by industry (%)
Care, social work and
other healthcare activities
Hotels, catering and restaurants
Non-compulsory education
Wholesale and real estate
Transport and storage
Voluntary
Retail
Administrative and support service
activities and other service activities
Compulsory education (including
pre-primary)
Legal, accounting, consultancy and
activities of head offices
Manufacturing
Human health activities
Public administration and
other public sector
Finance and insurance
Arts, entertainment and recreation
Construction
Other professional, scientific and
technical activities
Information and communication
Proportion of employers
Extent NICs have increased employment costs To a large extent
To a small extent
To some extent
Not at all Don’t know
Industry
Base: industries with base sizes less than 50 have been excluded. For a breakdown of base sizes, see Table 5.
32
31
17
32
32
21
50
26
16
32
10
42
35
41
12
38
20
31
31
44
15
38
16
31
39
11
35
37
11
39
29
46
10
23
49
21
27
28
30
29
38
10
22
26
31
16
22
44
30
33
16
50
27
7
10
7
5
10
4
3
6
5
7
4
7
4
6
14
9
6
15
11
9
8
4
6
8
8
4
9
7
10
8
3
9
9
12
12
6
6
Alarmingly, these changes have had a disproportionate impact on firms that hire
young people. Hospitality, for example, has the largest number of workers under 21.
We find that 37% of employers who hire young people, aged under 21, have said
the National Insurance changes have increased their employment costs to a large
extent. This compares with 23% of employers who do not hire young people. While
employees under the age of 21 are exempt from employer National Insurance, in
times of a weakening economy and with strong cost pressures, employers are less
likely to take younger staff on. Periods of unemployment for young people are
‘scarring’. It leads to lower earnings potential and the increased likelihood of further
spells of unemployment. It is also associated with negative mental health and
Recruitment and redundancy outlook
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
11
wellbeing outcomes. The latest data on payrolled employees from PAYE real-time
information4 shows that between October 2024 (when the changes were announced)
and May 2025, payrolled employees fell by 5.1% among 16- to 17-year-olds and 1.1%
among 18- to 24-year-olds. This compares with an overall contraction of 0.5%.
National Insurance changes have disproportionately impacted employers
who hire young people
Figure 8: Impact of National Insurance rises on employment costs, by whether they hire workers
under 21 (%)
Impact of NI changes To a large extent
To a small extent
To some extent
Not at all Don’t know
Employ young people
Proportion of employers
Base: summer 2025, employers who hire workers under 21 (n=1,066); employers who do not hire workers under 21 (n=844).
0 25 50 75 100
Do not currently
employ workers
under 21
23 2035
Currently employ
workers under 21 37 1537
7
7
16
4
When asking employers about which cost increase has had the largest financial
impact on their business in the last 12 months, the rise in employer NICs leads the
way (see Figure 9). Thirty-six per cent of employers report this as their biggest cost
increase over the past year. With the exception of hospitality, all industries report
the NICs rise as having the largest financial impact on their business in the past
year (see Appendix).
Another cost pressure faced by many businesses is rising energy costs, with 15% of
employers reporting this as having the largest financial impact on their business.
Twelve per cent of organisations reported that the rise in the National Minimum/
Living Wage (NMW/NLW) has had the biggest financial impact on their business in the
last 12 months. Businesses in hospitality were split between this and the NICs rise as
being the largest cost increase (27% and 26% respectively) (see Figure 10). Employers
in construction (21%) and retail (19%) reported the NMW/NLW rise as the cost increase
with the biggest financial impact at a rate higher than the average employer.
4 Oce for National Statistics. (2025) Earnings and employment from Pay As You Earn Real Time Information, UK: July 2025.
Recruitment and redundancy outlook Recruitment and redundancy outlook
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
12
Employers report rising NICs as largest cost pressure over last year
Figure 9: Largest cost pressure over the last 12 months (%)
30252015 40355 10
36
15
12
10
7
5
5
4
3
3
1
0
National Insurance contributions (NICs)
Energy costs
National Minimum/Living Wage (NMW/NLW)
Don’t know
Raw materials
Business rates
Not applicable – none of these costs have had
an impact on my business
Rent/property
Employee benefits (eg medical insurance)
Other
Licensing costs
Cost increase with largest financial
impact on business in the last year
Percentage of employers
Base: summer 2025, all employers (n=2,018).
Employers impacted by NMW/NLW report rising NICs as a larger cost pressure
Figure 10: Largest cost pressure over the last 12 months, by industry (%)
403020100 6050
Industry
27
26
21
26
19
32
19
35
18
44
17
35
16
29
11
36
10
25
9
25
9
52
8
44
5
52
4
44
4
50
4
50
3
32
2
43
Hotels, catering and restaurants
Construction
Wholesale and real estate
Retail
Care, social work and
other healthcare activities
Manufacturing
Human health activities
Administrative and support service
activities and other service activities
Information and communication
Arts, entertainment and recreation
Voluntary
Non-compulsory education
Finance and insurance
Compulsory education
(including pre-primary)
Legal, accounting, consultancy and
activities of head offices
Transport and storage
Public administration and
other public sector
Other professional, scientific
and technical activities
Proportion of employers
Cost increase with largest
financial impact on
business in the last year
National Minimum/
Living Wage (NMW/NLW)
National Insurance
contributions (NICs)
Base: industries with base sizes less than 50 have been excluded. For a breakdown of base sizes, see Table 5.
Recruitment and redundancy outlook
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
13
Further reading and practical guidance
• CIPD | Youth apprenticeships and the case for a flexible skills levy
A report with policy recommendations on providing a better apprenticeships
system and workforce training support for young people.
• CIPD | Managing redundancy
A guide to help deliver fair, effective redundancy processes that protect your
people and reputation.
• CIPD | Inclusive recruitment
Use our guidance to strengthen your talent pipeline with fair and inclusive hiring
practices.
• CIPD | Induction tools
Set up new hires for success with our effective onboarding tools.
Job vacancies
The labour market continues to cool, with official data published in mid-July
showing that overall vacancy levels have fallen each month for the past three years.5
We find that the rate of employers reporting hard-to-fill vacancies has also fallen over
much of that period (see Table 1). Thirty-one per cent of employers reported hard-to-
fill vacancies in the latest quarter.
Employers continue to have hard-to-fill vacancies
Table 1: Employers with hard-to-fill vacancies (%)
Spring
2023
Summer
2023
Autumn
2023
Winter
2023/24
Spring
2024
Summer
2024
Autumn
2024
Winter
2024/25
Spring
2025
Summer
2025
42 44 41 38 37 37 36 33 33 31
Base: summer 2025, all employers (n=2,018).
The level of public sector employers currently reporting hard-to-fill vacancies has
fallen significantly from 44% last quarter to 34% this quarter. This is in part due to
the proportion of employers reporting no vacancies rising. Half (49%) of public
sector employers currently have no vacancies or are unsure if their organisation has
vacancies, up from 40% last quarter.
5 Oce for National Statistics. (2025) Vacancies and jobs in the UK: July 2025.
Recruitment and redundancy outlook Job vacancies
4
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
14
Hard-to-fill vacancies have fallen in the public sector
Figure 11: Employers with hard-to-fill vacancies, by broad sector (%)
20
10
30
40
50
60
70
80
90
100
Hard-to-fill vacancies Yes
Don’t know
No
N/A – no vacancies
0
Quarter
Private sector Public sector Third/voluntary sector
Spring 2025 Summer 2025
24
29
1
46
22
29
1
48
Spring 2025 Summer 2025
14
44
2
40
15
34
2
49
Spring 2025 Summer 2025
22
40
3
35
23
39
5
33
Base: spring 2025, all employers (total: n=2,004; private: n=1,492; public: n=347; voluntary: n=165); summer 2025, all employers
(total: n=2,018; private: n=1,500; public: n=326; voluntary: n=192).
Proportion of employers
Figure 12 shows the proportion of employers reporting hard-to-fill vacancies has
fallen and the proportion reporting no vacancies has risen in all public sector-
related industries since last quarter. In the public administration and other public
sector categories, 27% of employers reported hard-to-fill vacancies. This is down
from 39% last quarter. Similarly, compulsory education has gone from 49% to 42%
of employers reporting hard-to-fill vacancies. In healthcare, half (51%) of employers
report no vacancies, up from 45% last quarter. As of writing, NHS England is currently
advertising no vacancies due to the merger with the Department for Health and
Social Care (DHSC).
Job vacancies
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
15
Hard-to-fill vacancies have fallen in some industries
Figure 12: Employers with hard-to-fill vacancies, by industry (%)
Construction
Care, social work and
other healthcare activities
Compulsory education
(including pre-primary)
Non-compulsory education
Transport and storage
Manufacturing
Other professional, scientific and
technical activities
Finance and insurance
Hotels, catering and restaurants
Voluntary
Human health activities
Wholesale and real estate
Public administration and
other public sector
Administrative and support service
activities and other service activities
Legal, accounting, consultancy
and activities of head offices
Information and communication
Retail
Arts, entertainment and recreation
Industry
Hard-to-fill vacancies Yes
Don’t know
No
N/A – no vacancies
Spring 2025 Summer 2025
Base: industries with base sizes less than 50 have been excluded. For a breakdown of base sizes, see Table 5.
50
36
31
46
50
35
45
38
35
39
50
34
49
51
43
34
58
59
41
38
36
38
45
44
51
40
42
42
53
28
46
63
57
55
50
38
1
3
2
1
0
3
3
2
2
3
0
3
3
1
0
4
3
3
4
3
0
0
2
2
2
5
1
1
2
0
3
0
2
0
3
0
23
27
14
24
25
23
20
17
16
16
17
45
23
10
25
26
24
27
18
28
20
17
15
17
14
20
20
48
27
28
28
19
23
14
16
13
23
34
55
30
24
40
33
40
49
43
32
21
26
39
30
40
11
13
34
32
43
33
35
36
31
41
42
35
26
21
24
18
19
27
31
45
However, there are signs that recruitment difficulties will continue to ease. Just 15%
of employers are anticipating significant problems in filling vacancies in the next six
months. This is the lowest proportion since we started asking this question in winter
2022/23.
Job vacancies Job vacancies
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
16 Job vacancies
Some employers still anticipate significant problems in filling roles
Figure 13: Expectation for vacancies in the next six months (%)
Proportion of employers
0 25 50 75 100
All employers 15 33 46 5
Expectation
for vacancies
Yes, we anticipate significant problems
Don’t know
Yes, we anticipate minor problems
No, we do not anticipate any problems
Base: summer 2025, all employers (n=2,018).
Recruitment pressures are still expected to remain in healthcare, social care, and transport
and storage. Recent changes to immigration rules brought into force in July are likely
to exacerbate this in the short run, especially in industries more dependent on migrant
labour. Changes include closing the Social Care Worker visa route for new overseas
applicants. The skills threshold for Skilled Worker visas has also risen to RQF level 6
(graduate level), removing 111 previously eligible RQF 3–5 occupations across all sectors.
Problems in filling vacancies most prevalent in health and social care
Figure 14: Expectation for vacancies in the next six months, by industry (%)
Human health activities
Transport and storage
Care, social work and
other healthcare activities
Hotels, catering and restaurants
Public administration and
other public sector
Construction
Compulsory education
(including pre-primary)
Retail
Non-compulsory education
Other professional, scientific and
technical activities
Voluntary
Finance and insurance
Wholesale and real estate
Manufacturing
Administrative and support service
activities and other service activities
Information and communication
Legal, accounting, consultancy
and activities of head offices
Arts, entertainment and recreation
Proportion of employers
Expectation
for vacancies
Yes, we anticipate significant problems
Don’t know
Yes, we anticipate minor problems
No, we do not anticipate any problems
Base: industries with base sizes less than 50 have been excluded. For a breakdown of base sizes, see Table 5.
15
60
20
13
30
49
23
32
38
15
36
42
16
49
33
21
35
40
13
35
47
21
51
27
23
30
41
17
41
37
12
46
37
12
31
52
12
30
50
12
31
51
12
56
33
1
64
30
13
47
35
24
35
36
4
8
7
7
2
4
4
2
6
5
5
5
8
5
0
5
5
5
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
17
Job vacancies
Further reading and practical guidance
• CIPD | Skills matching: Using and deploying people’s skills effectively
Use your people’s skills effectively for job satisfaction and enhanced productivity.
• CIPD | Employer brand
Build a strong brand to attract and retain talent with our detailed factsheet.
• CIPD | Responsible investment in technology
Drive job quality and performance through smarter tech investments.
Pay outlook
Among employers looking to increase, decrease or freeze pay in the next 12 months,
the median expected basic pay increase for the next 12 months remains at 3% overall,
for the fifth consecutive quarter. Expected pay awards held at a historic high of 5%
between winter 2022/23 and autumn 2023, before falling to 4% in winter 2023/24 and
spring 2024.
The median expected pay award remains at 3% in the private and public sectors. It
has fallen in the voluntary sector from 3% last quarter to 2.5% this quarter. To put
the median expected pay awards into context, the Consumer Prices Index (CPIH),
the Office for National Statistics’ (ONS) preferred measure of inflation, currently
stands at 4.1%.
In terms of the distribution, the lower quartile is estimated to be 2%, with the upper
quartile at 4%, with the latter value falling from 5% last quarter.
It should be noted that the average basic pay award covered in this analysis is only
one component of pay growth. Many people will also benefit from incremental
progression or promotion, bonuses or a pay bump when switching jobs.
Pay outlook
5
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
18
Average expected pay awards remain at 3%
Figure 15: Median basic pay increase expectations – median employer
0.0
1.0
3.0
4.0
5.0
6.0
2.0
X
X
X X XX
XXXX X
X
XXX X
X
XXXX
X
X X
XXXXXXXXX
X
X
X
X
X X
XXX
X
X
XX
X
X X X
X
X
X
Summer 2012
Autumn 2012
Winter 2012/13
Spring 2013
Summer 2013
Autumn 2013
Winter 2013/14
Spring 2014
Summer 2014
Autumn 2014
Winter 2014/15
Spring 2015
Summer 2015
Autumn 2015
Winter 2015/16
Spring 2016
Summer 2016
Autumn 2016
Winter 2016/17
Spring 2017
Summer 2017
Autumn 2017
Winter 2017/18
Spring 2018
Summer 2018
Autumn 2018
Winter 2018/19
Spring 2019
Summer 2019
Autumn 2019
Winter 2019/20
Spring 2020
Summer 2020
Autumn 2020
Winter 2020/21
Spring 2021
Summer 2021
Autumn 2021
Winter 2021/22
Spring 2022
Summer 2022
Autumn 2022
Autumn 2023
Winter 2022/23
Spring 2023
Summer 2023
Winter 2023/24
Spring 2024
Summer 2024
Autumn 2024
Winter 2024/25
Spring 2025
Summer 2025
Spring 2012
Quarter
Overall net
Private sector
Voluntary sector
Public sector
3.0
3.0
3.0
2.5
Base: summer 2025, all employers expecting and able to estimate a pay award in the next 12 months (total: n=823;
private: n=572; public: n=167; voluntary: n=84).
Median basic pay increase expectations in the next 12 months (%)
Further reading and practical guidance
• CIPD | Pay fairness and pay reporting
Use our factsheet to understand fair pay and legal reporting requirements.
• CIPD | Strategic reward and total reward
Develop a comprehensive reward strategy to support the needs of both
employee and organisation.
• CIPD | Performance-related pay
Link pay to performance fairly and effectively with our factsheet.
Pay outlook
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
19
Recommendations for
employers and people
practitioners
Keep workloads manageable amid reduced recruitment
With most employers planning to hold staffing levels steady, unfilled roles can
increase strain on existing teams. Monitor workloads regularly and ensure staff have
the resources and support they need to stay productive, engaged and well.
Invest in young people as a long-term workforce strategy
With youth employment falling, it’s vital to maintain access routes for young workers.
Offer mentoring, clear development pathways, and early-career support to build your
future talent pipeline.
Strengthen recruitment strategies to overcome hard-to-fill roles
Review your employee value proposition and adopt inclusive hiring practices –
such as simplifying job requirements, widening outreach and offering flexibility – to
access a broader talent pool and improve the chances of successful recruitment.
Review your workforce plans in light of immigration changes
New visa rules introduced in July 2025 have restricted access to many mid- and
lower-skilled roles for overseas workers, including the closure of the Social Care
Worker route. Assess how this affects your hiring plans and explore alternative
sourcing strategies.
Retain key talent through skills and career development
In a cooling labour market, supporting progression can improve retention and reduce
pressure to recruit externally. Provide opportunities for reskilling, upskilling and
internal mobility to help employees grow with your organisation.
Survey method
All figures, unless otherwise stated, are from YouGov Plc. The total sample size
was 2,018 senior HR professionals and decision-makers in the UK. Fieldwork was
undertaken between 16 June and 13 July 2025. The survey was conducted online.
The figures have been weighted and are representative of UK employment by
organisation size, sector and industry.
Weighting
Rim weighting is applied using targets on size and sector drawn from the BEIS
Business population estimates for the UK and regions 2023. The following tables
contain unweighted counts.
Survey methodPay outlook
6
7
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
20
Table 5: Breakdown of sample, by industry
Industry Count
Administrative and support service activities and other service activities 265
Arts, entertainment and recreation 78
Care, social work and other healthcare activities 57
Compulsory education (including pre-primary) 132
Construction 125
Finance and insurance 121
Hotels, catering and restaurants 76
Human health activities 140
Information and communication 132
Legal, accounting, consultancy and activities of head offices 75
Manufacturing 191
Non-compulsory education 101
Other professional, scientific and technical activities 88
Police and armed forces 19
Primary and utilities 47
Public administration and other public sector 85
Retail 75
Transport and storage 59
Voluntary 82
Wholesale and real estate 70
Table 4: Breakdown of sample, by region
Region Count
Scotland 127
Wales 69
Northern Ireland 33
Northwest England 196
Northeast England 54
Yorkshire and Humberside 130
West Midlands 131
East Midlands 116
Eastern England 132
London 373
Southwest England 172
Southeast England 298
All of the UK 187
Table 2: Breakdown of sample, by
number of employees in the organisation
Employer size band Count
2–9 427
10–49 417
50–99 179
100–249 224
250–499 167
500–999 148
1,000 or more 456
Table 3: Breakdown of sample, by sector
Sector Count
Private sector 1,500
Public sector 326
Third/voluntary sector 192
Survey method
8
2
1
3
4
5
6
7
Labour Market Outlook Summer 2025
21
Survey method Appendix
Industry
National Insurance
contributions (NICs)
National Minimum/
Living Wage (NMW/
NLW)
Business rates Energy costs Raw materials Rent/property Employee benefits (eg
medical insurance)
Licensing costs Other Not applicable – none
of these costs have
had an impact on my
business
Don’t know
Administrative and
support service
activities and other
service activities
36 11 5 15 4 5 2 1 3 7 11
Arts, entertainment
and recreation 25 9 9 19 8 11 0 3 5 6 6
Care, social work
and other healthcare
activities 44 18 2 5 2 1 10 2 2 0 12
Compulsory
education (including
pre-primary) 44 4 2 21 1 2 3 1 8 4 10
Construction
26 21 7 11 18 4 2 1 1 4 5
Finance and
insurance 52 5 9 5 2 3 4 1 1 4 14
Hotels, catering and
restaurants 26 27 814 9 2 3 0 1 2 8
Human health
activities 29 16 118 4 2 8 0 1 3 18
Information and
communication 25 10 11 14 10 0 9 4 1 6 10
Legal, accounting,
consultancy and
activities of head
oces
50 4 7 11 2 7 0 0 1 8 9
Manufacturing
35 17 514 14 4 1 0 2 4 4
Non-compulsory
education 44 8 2 18 1 2 2 1 6 5 12
Other professional,
scientific and
technical activities 43 2 4 15 6 6 4 0 4 7 10
Public administration
and other public
sector 32 3 0 14 1 8 3 0 6 3 30
Retail
35 19 416 11 1 5 1 2 4 2
Transport and
storage 50 4 6 22 3 4 0 3 1 4 4
Voluntary
52 9 0 18 5 4 0 0 3 4 5
Wholesale and real
estate 32 19 715 8 5 1 2 1 4 5
Appendix
Cost increase with largest financial impact over the last 12 months, by industry (%)
8
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