The outlook for permanent and temporary hiring shows signs of recovery, but strong economic headwinds are tempering expectations.
That’s according to the latest Recruitment and Employment Confederation (REC) and Whitestone Insight JobsOutlook report for April 2025.
The short-term outlook for permanent hires, covering the next three months, improved by three points to net: +9. In the medium term, covering the next four to 12 months, the outlook rose by four points to net: +9. Short-term sentiment for temporary and contract hiring shifted back into positive territory, rising three points to net: +3, with April alone showing a further increase to net: +5. The medium-term outlook for temporary roles improved by five points to net: +8, spurred by a significant jump in optimism in April to net: +14.
This more positive trend bodes well for immediate recruitment activities such as seasonal hiring and opportunities for school leavers and graduates entering the workforce. However, the prospects of a sustained jobs comeback remain uncertain due to wider economic pressures and concerns about new government policies.
Economic headwinds affecting employer confidence
Employers’ perceptions of the economy’s performance fell significantly in the three months to April 2025, with the net score dropping by 12 points to -35. Confidence in making investment and hiring decisions also declined by five points to net: -9. These figures reflect employers’ apprehension about ongoing cost inflation, the National Insurance rise, and the potential complexity and costs linked to proposals in the government’s Employment Rights Bill.
REC Deputy Chief Executive Kate Shoesmith said that while there are positive signs, they are accompanied by significant risks. “Firms clearly see potential, but they also see risk. While improving hiring intentions suggest a jobs comeback this year, the extent of any bounce back depends on the economic and political headwinds on firms easing a fair bit. This makes it the critical test of the Spending Review: does it present a clear, optimistic and long-term path to growth?” she said.
Shoesmith added that clarity and support in the Employment Rights Bill and effective use of apprenticeship funding announced this week will be essential to maintaining the flow of new talent into the workforce.
London shows renewed hiring optimism
London stands out as a key area of optimism in the survey. Employers in the capital reported a sharp increase in their short-term permanent hiring outlook, with a jump from net: +3 to net: +18 quarter-on-quarter. Medium-term hiring expectations in London also rose, from net: -2 to net: +19. The short-term temporary hiring outlook in London improved notably from net: -3 in the three months to February to net: +13 in the three months to April, while the medium-term temporary outlook strengthened from net: -5 to net: +10.
Shoesmith noted that London has often been a bellwether for broader hiring trends and may signal the potential for a wider recovery if the economic environment stabilises. However, the report suggests that any meaningful recovery will depend on the easing of cost pressures and regulatory uncertainties currently facing businesses.
The JobsOutlook report also noted a significant improvement in hiring intentions among mid-sized enterprises, defined as those with between 50 and 249 employees. These firms reported a notable increase in their outlook for both permanent and temporary hiring in the short and medium term, mirroring broader improvements in hiring sentiment seen in the survey.
