Recruitment market update: How to navigate the current landscape

The UK recruitment market is telling a complex story in 2025. While overall job vacancies have fallen and payroll numbers show a gradual decline, the impact varies dramatically across sectors - creating both challenges and opportunities for APSCo members.

Are we witnessing a slowdown? 

Recent ONS data reveals job openings have dropped by 5.8% to 718,000 between May to July across nearly all sectors, with vacancies at their lowest level since the pandemic recovery period. However, this cooling hasn't translated into a higher unemployment rate, with the unemployment rate remaining at 4.7%, so we are seeing more gradual movements rather than any dramatic shifts.  

The hospitality and retail sectors are bearing the brunt of this downturn. As Liz McKeown, director of economic statistics at the ONS, noted, payroll numbers "have now fallen in 10 of the last 12 months, with these falls concentrated in hospitality and retail," with employers increasingly cautious about recruitment amid rising operational costs and regulatory changes. 

The professional services contrast  

While traditional sectors struggle, professional services continue to demonstrate resilience. The demand for skilled professionals, particularly in technology-enabled roles, remains strong as businesses invest in digital transformation and AI capabilities to improve efficiency and competitiveness. 

This divergence creates a clear opportunity for recruitment consultants to pivot their focus toward sectors showing greater stability and growth potential. 

The impact of AI 

Artificial intelligence is increasingly becoming a factor in recruitment decisions across all sectors. In professional services, AI tools are enhancing recruitment processes, making them faster and more precise. In hospitality and retail, AI is being viewed as both a solution for operational efficiency and a way to manage tighter budgets. 

For recruitment professionals, understanding how different sectors approach AI adoption is crucial for positioning services effectively. (We are also looking for APSCo members to have their say on the impact of AI on their organisation, don’t forget to share your perspective here.)  

Looking ahead 

The recruitment landscape is experiencing a fundamental shift rather than a temporary blip. Sectors that embrace technological advancement and invest in skilled talent are showing greater resilience, while those relying on traditional operational models face ongoing pressures. For APSCo members, success will come from understanding these sector dynamics, adapting service offerings accordingly, and positioning themselves as strategic partners. The market may be cooling overall, but opportunities remain for those who know where to look. 

Source: Office for National Statistics data via BBC News, August 2025