New ONS Figures have been released examining the state of the job market in the UK – and the numbers point towards a weakening job market that’s only continuing to decline. Even looking at the latest employment figures for March and April (focussing on the number of people on company payrolls), the figures fell by 47,000 in March and by a further 33,000 in April. This comes at a time when unemployment figures have rose from 4.4% in the previous quarter to 4.5% from January to March 2025. It’s clear that the job market is weakening, but what does that mean for you as a business?
The Latest Figures Examined
As well as the figures mentioned above, showing a decline in employee numbers on the payroll and a rise in unemployment figures which clearly go hand in hand, there are other figures worth noting. Whilst employee numbers are falling, new job vacancies are too – and in a healthy job market you would usually expect the number of job vacancies to rise as employee numbers fall, because the position would need to be refilled. Instead, from February to April the number of job vacancies across the UK fell by a further 44,000.
This, all added together, is a sure sign that the job market is weakening in the UK. Employee numbers are falling as unemployment rates rise, yet job vacancies aren’t increasing to replace lost workers. Business confidence is clearly low in the UK right now, and our top analysts have a good idea why…
Why Is The Job Market Weakening In The UK?
We’ve been talking about business growth falling and the economy shrinking for a while here at Real Business, with our experts theorising why that might be. But the latest figures make us more sure than not as to why the job market is weakening, and it’s likely business’ responding to April’s increase in National Living Wage and Employer National Insurance Contributions. Essentially, business growth is falling, confidence is low, and unemployment is rising because it’s more expensive to have employees right now than it was in the months and years gone by.
But what does that mean for you and your business?
What A Weakening Job Market Means For Your Business
One of the biggest concerns for employers at this time is usually how a weak job market will impact business growth – more specifically how it affects innovation and a business’ ability to think creatively and move strategically to secure its position over competition.
Well, typically a weak job market means attracting and retaining new talent becomes a little harder, which may seem odd considering the number of unemployed candidates, but that’s because business’ at this time usually close rank, doing all they can to retain the key members of their team whilst having to make some sacrifices elsewhere with roles that are less important to business activity or with employees that aren’t performing as well.
The most skilled employees will probably be more likely to stay in their current role during a weak job market, too, mostly because they will want to steady the ship during a difficult time for the UK economy to guarantee their current position and salary.
But it isn’t all doom and gloom. During this difficult time you can double down on the talent you’ve already hired yourself. Invest in up-skilling, re-skilling and supporting your current employees. A difficult job market makes recruitment hard, but it doesn’t have to make business growth, innovation and success impossible. The best business owners make the most of their current situation and a weakening job market usually means looking inwards to strengthen your business position and retain the talented employees you already have.