- The UK economy outperformed low expectations in 2024 but new data from Indeed points to concerns over the labour market’s outlook
- Job postings declined by 24% in 2024 with headwinds to hiring set to persist in 2025 amid post-Budget uncertainty
- Wage growth persisted in 2024 and is still running at an annual pace of 6.7%, but could be set to weaken in light of the increase in National Insurance contributions
- Share of UK job postings mentioning zero-hour arrangements rose to 1.9%, despite government plans to restrict zero-hour contracts
- Salary transparency in UK job postings has been rising, with 72% of postings including some pay information
The UK economy performed better than expected this year, with growth set to quicken in 2025. Despite this, new research from the global hiring platform, Indeed, points to less favourable labour market conditions leading into the new year, with government policy changes presenting multiple headwinds.
Indeed’s 2025 Jobs & Hiring Trends Report reveals a 24% decline in UK job postings on Indeed over the past year, the largest decline seen in peer countries including Australia, Canada, France, Germany and the US.
And with the combination of a hike in employer National Insurance contributions and lowering of their threshold, higher minimum wages, increased business rates and a new workers’ rights package, employers will likely continue with caution when it comes to hiring in 2025.
Job postings have fallen in almost all occupational categories in 2024
The slowdown in UK job postings has been broad-based across occupational categories – of the 48 sectors regularly tracked by Indeed, job postings were up over the past year in only one (the legal sector, +12 percentage points). The biggest falls were in the veterinary, electrical engineering, and security & public safety sectors.
Job postings continue to trend weakest in categories that typically offer the most remote-work opportunities. Alongside the weakness in tech categories (which are the most likely to offer remote work), several professional categories are languishing among the weaker performers.
As the labour market has slowed, employers have been making less use of financial incentives such as signing bonuses, which are often an indication of where employers are experiencing pain points in finding suitable candidates. The share of job postings mentioning a signing bonus stood at 1.0% in October, down from a peak of 2.1% in February 2023.
Wage growth has persisted, but is likely to weaken
Given the overall softening in the labour market, wage growth is likely to cool further as the balance of power continues to shift in employers’ favour. Meanwhile, the increase in National Insurance contributions announced in the Budget presents a potentially significant headwind to wage growth after the new rules are adopted in April.
The Indeed Wage Tracker, which measures growth in posted wages in job listings, has dipped slightly from a recent peak of 7.0% year-on-year in June but continued to run at a high annual pace of 6.7% as of October.
There remains a notable gap in posted wage growth between lower-paid and higher-wage occupations. Posted wages for the lowest-paying roles grew 7.6% year-on-year in October, versus 6.3% for mid-wage and 6.0% for high-wage jobs. Low-paid categories including security, retail, customer service, cleaning and childcare all saw annual posted wage growth of 8.0% or higher in October.
Zero hours contracts gradually rise ahead of policy changes
Despite government plans to restrict zero-hour contracts, they continue to rise in popularity in job postings. The share of job postings mentioning zero hours arrangements stood at 1.9% in October, having gradually risen from around 1.1% back in April 2022.
Zero hours contracts are prevalent in job postings across a range of low-paid occupations, led by the sports category (8.5% of sports job postings mentioned a zero-hour contract in October), followed by personal care & home health (6.0%) and hospitality & tourism (5.9%).
Pay transparency is rising
Though Brexit means the UK is outside the scope of upcoming EU pay transparency legislation, British employers have increasingly moved towards greater pay transparency regardless. Salary transparency in UK job postings has been rising over the past five years, with 72% of postings including some pay information in October, up from less than 50% pre-pandemic.
It seems clear that UK employers are mindful of the benefits of pay transparency, including attracting top talent and greater recruiting efficiencies gained by aligning salary expectations from the outset.
Remote and hybrid work persists despite RTO push
Despite a growing push to return-to-office (RTO), the share of UK job postings mentioning remote or hybrid work remains relatively high at 14.6%, down from a peak of 16.3% back in May, but well above the levels of around 3% seen pre-pandemic.
Employers of in-person occupations are offering other forms of flexibility, including four-day work weeks. Veterinary (16.2%), childcare (4.0%) and education & instruction (2.5%) – roles that are among the most difficult to do remotely with any regularity – are the categories with the highest shares of four-day week postings.
Jack Kennedy, Senior Economist at Indeed, commented: “The UK economy has shown resilience in 2024, performing better than initially expected, but it faces challenges heading into 2025. Much will depend on the health of the labour market. It remains to be seen how employers react to the various policy changes. Yet even if warnings of mounting job losses don’t come to pass, job creation looks to be slower and the combination of waning pay growth and higher taxes is likely to impact workers’ pay packets.
“Few sectors defied the hiring slowdown this year but there are some which held up better than others. While finding a job is likely to remain tough in some industries, particularly specific types of knowledge work, there are other areas of the labour market which continue to offer opportunities for jobseekers. Sectors including engineering, as well as installation & maintenance, could get a boost thanks to Labour's push to increase house building and green energy, while certain public sector categories are likely to benefit from increased hiring in areas including education and healthcare.
“For employers, remaining competitive on pay and benefits, such as remote and hybrid options, will be important to attracting the best talent. That said, the balance of power has certainly swung towards employers as the labour market has softened, as evidenced by the fall in job postings, decline in signing bonuses, easing wage growth and rising zero hours contract postings.”
About Indeed
More people find jobs on Indeed than anywhere else. Indeed is the #1 job site in the world (Comscore, Total Visits, March 2024). With over 580 million job seeker Profiles, people in more than 60 countries across 28 languages come to Indeed to search for jobs, post resumes, and research companies. Over 3.5 million employers use Indeed to find and hire new employees. Indeed is a subsidiary of Recruit Holdings, a global leader in HR technology and business solutions that is simplifying hiring and transforming the world of work.
