The UK’s hiring confidence has taken a sharp hit, with new data showing a significant drop in planned recruitment for the third quarter of 2025. According to the latest ManpowerGroup Employment Outlook Survey, hiring optimism among UK employers has fallen by 12 percentage points compared to the previous quarter – one of the steepest drops recorded outside of crisis periods.
The survey, which canvassed the views of over 2,000 employers across the country between April and early May, found the Net Employment Outlook now sits at +19%, a notable fall from the +31% reported in Q2.
While some sectors remain buoyant – notably technology (+47%), financial services (+28%), and healthcare (+21%) – others have tipped into the red. Alarmingly, employers in communications (–7%), energy and utilities (–3%), and the public sector (–8%) now anticipate more job cuts than hires over the coming months.
A “reset” rather than a recession?
Experts at ManpowerGroup UK have described the downturn as a labour market reset, not a collapse. Petra Tagg, UK Director at ManpowerGroup, believes employers are reacting cautiously to a combination of economic pressures, including:
- Increased labour costs: The April uplift in the National Living Wage and National Insurance contributions has hit payroll budgets, especially in lower-margin sectors.
- Ongoing uncertainty: Global trade friction, particularly tariff discussions with the US, has prompted businesses to scale back or delay hiring.
- Structural shifts: Many firms are re-evaluating staffing levels due to automation, reorganisation, and fluctuating demand.
“Employers are being more selective and strategic. They’re watching the numbers, rethinking the workforce mix, and in some cases leaning on temporary hires instead of long-term commitments,” Tagg said.
Logistics and temp roles on the rise
Despite the overall dip in optimism, some short-term hiring remains active. Warehousing, delivery services, and seasonal roles continue to offer opportunities as companies seek to test demand through flexible contracts.
This strategy, Tagg notes, offers a buffer for uncertainty – allowing employers to adjust quickly to economic or political shifts, without the long-term risk of over-hiring.
Public sector pain
Perhaps most striking is the shift in the public sector, where the employment outlook has dropped to –8%. For a sector traditionally associated with job stability, this reversal raises questions about the future of government resourcing, particularly in local authorities already stretched by cost pressures.
Communications and energy employers also reported negative outlooks, with several citing delayed projects and tighter capital investment as contributing factors.
Student and graduate implications
For students and graduates entering the job market, the message is clear: the competition is tightening. While there are still bright spots in tech, finance, and life sciences, applicants will need to be agile, upskilled, and ready to demonstrate clear value from day one.
“Employers want evidence of real-world readiness,” says careers adviser Samantha Rees. “That includes internship experience, problem-solving skills, and above all, adaptability in a fast-changing economy.”
Looking ahead
The broader message from ManpowerGroup is one of caution, not panic. Hiring is still happening – but more thoughtfully. With employers adjusting to financial and structural pressures, job seekers should expect more rigorous selection and a greater emphasis on flexibility.
Whether this is a short-term correction or a sign of more systemic change will depend on inflation trends, global markets, and how businesses respond to wage policy shifts in the months ahead.