UK trails in global hiring race, facing the world's sharpest yearly and quarterly decline

• Hiring plans fall again across the UK in the last quarter of the 2025 to just +11% (dropping –17 percentage points YoY and –8 percentage points QoQ)
• UK sees sharpest year-on-year AND quarter-on-quarter drop in anticipated headcount growth globally – is AI-driven productivity our only answer?
• Autumn Statement is ‘make or break’ for employers navigating cost pressures, AI disruption and policy uncertainty

Hiring demand amongst UK employers has dropped to a new low (+11%) according to the latest ManpowerGroup Employment Outlook Survey, which captures quarterly hiring intentions from over 2,000 UK employers across sectors. The results show how the UK’s challenging labour market conditions are taking their toll on business confidence going into Q4.  

The UK recorded the biggest drop in year-on-year planned hiring globally, contracting –17 percentage points (followed by Singapore, Hungary and Finland which all fell – 9 percentage points on the year). Underscoring the scale of the British slowdown, the UK also has the worst quarter-on-quarter fall of – 8 percentage points globally (followed by Costa Rica and Colombia, both down 6 points on the quarter). This, combined with the latest Net Employment Outlook, makes October’s Autumn Statement a critical moment for employers seeking clarity and support.

“The UK economy has stalled and with it so has hiring. The labour market has been moving at an almost glacial pace for months and while there remains some movement in roles for the highly skilled, we’re very far off the +30% hiring Outlooks we saw in early 2022,” says Petra Tagg, Director, ManpowerGroup UK. “Employers are weighing recruitment investment against the need to drive efficiency through AI and automation. What’s needed now is a corrective course of action – relief on employment costs, clarity on policy timelines and bold investment in long-term infrastructure and pragmatic innovation.”

Employers continue to face challenges from increased national insurance contributions and rising operational costs, as well as uncertainty around both the economy and government commitments. These factors have led to many businesses adopting a more conservative approach to hiring, opting instead to maximise the potential of their existing workforce by focusing on productivity gains.

Tagg continues, “The first half of 2025 showed that entry-level hiring was falling as firms reached for AI to take on routine tasks. Our latest survey shows this demand will stabilise again towards the end of the year and will make up 61% of all hiring.

“Employers are on a sharp learning curve, and are reimagining the value of the emerging workforce, not as ‘cheap labour’, but as digitally fluent candidates who can seamlessly integrate with AI and help plug skills gaps.

“Competence is currency in today’s job market,” adds Tagg.  “It’s an employer’s market; candidates who bring the right skills match will be in a strong position to negotiate and shape their career paths. Managers, meanwhile, facing headcount restrictions, are scrutinising ways they can maximise productivity with existing talent and resources. But this pressure can lead to less transparent recruitment processes. Employers can’t slack – reputations are maintained just as much in downturns as in times of growth.” 

Information Technology continues to lead on sector performance, with Financials & Real Estate following behind. Consumer Goods & Services and Industrials & Materials are tied for the sharpest year-on-year drop, while ‘Other’ which includes government roles remains the weakest. Energy & Utilities posted the strongest quarterly growth, tied to the ongoing discussions around energy bills and government relief schemes.

“It’s a tough outlook for the UK at the moment. Whereas last year the same pressure was being felt across Europe, this year the UK labour market is steering its own course, and it’s unlike one we’ve faced before,” concludes Tagg. “A new market predicament is an opportunity for organisations to evolve and become more efficient; by focusing on productivity and the strategic development of talent, businesses can weather uncertainty, attract high-quality candidates and position themselves for long-term success.”