The past 12 months have been volatile for employers. It has been marked by low economic growth, tax increases and high supply chain and energy costs as well as unexpected tariffs. And to cap it off additional uncertainty about staffing due to the upcoming Employment Rights Bill.
But the latest JobsOutlook survey of 703 employers suggests a tentative turnaround is possible this year.
Employers’ confidence in the UK economy is 15 percentage points better than last quarter, now sitting at net -20, when comparing the three months to April 2025 with the three months to June 2025. It suggests that Spring 2025 was just a blip in a steady two-year trend towards positive territory.
And the change in employers’ confidence in making investment and hiring decisions is up 12 percentage points on the three months to April 2025 (net: -9) – now at net +3 for the three months to June 2025. This return to positive territory suggests that confidence is rising month by month. That flows through to rising hiring intentions in all forms of labour supply that the survey measures – and strong performance in London, often a bellwether for trends in the jobs market.
Today’s report supports the scattered signs of improving demand in the recent REC/KPMG Report on Jobs and the REC/Lightcast Labour Market Tracker jobs data.
REC Chief Executive Neil Carberry said:
“Confidence is the key to growth in 2025, so it is good that businesses are beginning to shake off some concerns on investment and hiring that they have carried for almost three years. Despite a Spring battering from the NICs rise, inflation and other policy costs, there is hope that businesses can step up their trading in the second half of the year. Getting investment plans unblocked will turn firms from delayers of recruitment to hopeful hirers.
“The focus now turns to the government. The upcoming Budget must strike a better balance between supporting business growth and addressing the public finances, something that was missing last year. That round of increased employment costs stalled a budding recovery in employer sentiment. Encouragingly, breakthroughs in international trade, stable inflation and a year of political stability are helping. The recently announced roadmap for the Employment Rights Bill is another positive step in terms of offering some certainty, but genuine, ongoing consultation with business ahead of the Bill’s Royal Assent and plans for the Budget is essential to sustain momentum.”
The JobsOutlook report also shows:
- The short-term permanent hiring outlook (for the next three months) was up by three points across the quarter to sit at net +13 (compared to the three months to April 2025).
- Overall, across the quarter, the medium-term permanent outlook sentiment (next four to 12 months) improved by six points to net: +15%, when comparing to the three months to April 2025.
- The balance of short-term temporary hiring intentions surged in the three months to June – up by eight points to net: +12%.
- There was an eight-point rise in medium-term temporary/contract hiring intent experienced across the quarter.
- The optimism in London remained the strongest in any region, in both forecast permanent hiring and temporary hiring. And there was a surge in confidence among surveyed large businesses in the UK (those with more than 250 staff) about forecast permanent hiring and temporary hiring.
