Who conducted this employment research?

Research conducted by the MyEyze finance Desk.

December 3, 2025 at 20:08

10 Things to Know About the UK Labour Market in 2025

Authored by MyEyze Finance Desk

The UK labour market in 2025 is marked by a tight job market, declining job postings, and evolving worker expectations. Wage growth is cooling, but remains above international peers, while flexibility and transparency are now top priorities for job seekers. Employers face challenges in recruitment and retention, especially in sectors with persistent skills shortages.

Overview

The report provides a comprehensive overview of the UK labour market in 2025, highlighting several key trends. Despite a slight decline in job vacancies compared to previous years, the market remains tight, with more job openings than unemployed people. Wage growth has slowed but is still higher than in the eurozone and the US. There is a growing emphasis on salary transparency, with most job postings now including pay information. Workers are increasingly prioritizing flexibility and work-life balance, with many willing to accept lower pay or forgo promotions for remote work opportunities. Sectors such as IT, data, engineering, sales, and customer-facing roles continue to face skills shortages, while white-collar candidate availability is higher, making hiring more affordable in these areas.

Why it matters

This report is crucial for policymakers, businesses, and the public as it sheds light on the current state and future direction of the UK labour market. For policymakers, it highlights the need to address skills shortages and the impact of recent policy changes, such as the National Insurance contributions and minimum wage increases. Businesses can use the insights to adapt their recruitment strategies, emphasizing competitive benefits, job stability, and career growth opportunities to attract and retain talent. The public can gain a better understanding of the job market dynamics, which can inform career decisions and expectations.

Key findings / important points

The UK labour market remains tight, with 1.9 unemployed people per vacancy, but job postings are declining and are now below pre-pandemic levels.
Wage growth is cooling but remains higher than in the eurozone and the US, with increased salary transparency in job postings.
Workers increasingly prioritize flexibility and work-life balance, with many willing to forgo promotions or accept lower pay for remote work.
Persistent skills shortages in IT, data, engineering, sales, and customer-facing roles, while white-collar candidate availability is higher.
Employers must adapt to evolving workplace behaviors and offer strong workplace benefits to retain talent.

Implications and Analysis

The tight labour market and declining job postings suggest that businesses may face ongoing challenges in recruitment and retention, particularly in sectors with skills shortages.
The emphasis on flexibility and transparency could lead to a shift in workplace culture, with more companies offering remote work and clear pay information.
Policy changes, such as increased National Insurance contributions and higher minimum wages, may impact employment and wages, especially in sectors that employ large numbers of lower-paid workers.
The higher availability of white-collar candidates may make hiring more affordable in these areas, but businesses will need to focus on competitive benefits and career growth to attract top talent.
The report's findings highlight the importance of having a clear and efficient recruitment plan in place to navigate the changing labour market.

Conclusions and recommendations (if relevant)

Based on the report’s findings and analysis, it is recommended that businesses and policymakers focus on addressing skills shortages through targeted training and recruitment strategies. Employers should emphasize competitive benefits, job stability, and career growth opportunities to attract and retain talent. Policymakers should consider the impact of recent policy changes on employment and wages, and work to support sectors with persistent skills shortages. The public should be aware of the evolving job market dynamics and the importance of flexibility and transparency in career decisions.

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This content was created with formatting and assistance from AI-powered generative tools. While we strive for accuracy, this content may contain errors or omissions and should be independently verified. The final editorial review and oversight were conducted by humans. Some sections include summaries, titles, or links to external content.All external content including summaries are transformative, limited in scope, and fall under Fair Use principles. All rights to the original works remain with their respective owners.