The CIPD’s quarterly Labour Market Outlook is one of the most authoritative employment indicators in the UK and provides forward-looking labour market data and analysis on employers’ recruitment, redundancy and pay intentions.

The LMO is published every February, May, August and November. Its insights help HR professionals and employers anticipate labour market movements and to adjust and prepare accordingly. It also feeds into our consultations and engagement with the UK Government and policy-makers.

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Labour Market Outlook – Spring 2025

Employer confidence continues to decline

Employer confidence has fallen again this quarter, with the net employment balance dropping to +8 – the lowest level recorded outside the pandemic. Hiring intentions have weakened, and one in four employers now plan redundancies, rising to 27% in the private sector.

Rising employment costs – including increases to National Insurance and the National Living Wage – are forcing many organisations to scale back recruitment, limit training investment, and consider price increases. Uncertainty around the Employment Rights Bill and global events is adding to employers’ caution.

The CIPD is calling on the Government to work closely with employers and set out a clear, phased rollout of the Bill to minimise disruption and safeguard investment in people and skills.

Retail and education are among the hardest-hit sectors. Just 11% of retail employers expect to grow their workforce, and confidence has dropped sharply in education.

Median pay expectations sit at 3% across the public, private and voluntary sectors. Half of employers planning redundancies are offering enhanced packages – a sign of continued commitment to employee financial wellbeing and trust.

Download the full report to access in-depth data, sector-specific breakdowns, and expert analysis to inform your workforce planning and strategic decision-making.

Labour Market Outlook - Spring 2025

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Spring Net employment balance

Employer confidence hits post-pandemic low

The net employment balance, the score measuring the gap between employers expecting staff increases and those anticipating decreases, has dropped from +13 to +8. This is the lowest level since 2020. Fewer employers expect to grow their workforce in the next three months.   

Net employment balance private/public

Confidence drops across sectors

The net employment balance fell to -4 in the public sector and hit a record low of +11 in the private sector – the lowest outside of 2020.

Redundancy plans remain high

One in four employers plan to make redundancies in the next three months, unchanged from last quarter.  

Redundancy pay

Most employers go beyond the minimum

Half of employers offered enhanced redundancy pay last year, while 41% stuck to the statutory minimum. 

Pay increase

Pay expectations even

Median basic pay rises remain at 3% across the public, private and voluntary sectors. 

 

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