Britain’s hiring intentions remain at a record low as businesses face rising employment costs and economic uncertainty. According to three recent surveys, recruitment activity has taken a hit, particularly among young people, who are being hardest hit by the drop in hiring.
A report from the Chartered Institute of Personnel and Development (CIPD) revealed that just 57% of private-sector employers plan to recruit in the next three months, down from 65% in autumn 2024. This decline is largely due to the £25bn rise in employer national insurance contributions (NICs) implemented in April, alongside other rising costs.
KPMG and the Recruitment and Employment Confederation (REC) also reported a significant fall in recruitment in July, with vacancies at their lowest since April. This was largely attributed to employers’ pessimistic outlook and tightened recruitment budgets. The report highlighted the slowest pay growth in nearly four and a half years, with starting salaries rising at the weakest rate in recent history.
The hospitality, care and retail sectors, in particular, have been hit hard by mounting employment costs. The CIPD found that 37% of employers hiring young people under 21 felt NICs had significantly increased their costs, compared to 23% of those not hiring young workers.
With ongoing economic uncertainty and challenges such as weak GDP growth and high energy costs, there are calls for the government to do more to support youth employment and ensure changes to employment rights don’t further hinder recruitment.
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