Two sets of fresh labour market data reveal a stark picture for UK employers and employees alike: hiring intentions are sliding sharply, while cost pressures continue to bite.
The Office for National Statistics’ latest Business Insights release highlights that although staffing cost pressures may be easing, they remain stubbornly high. Almost half (48%) of businesses with 10 or more employees reported higher staffing costs in recent months. Recruitment is proving equally tough, with 31% of larger firms struggling to fill roles due to a lack of qualified applicants or too few applications.
Commenting on the ONS statistics, Kevin Fitzgerald, UK MD at Employment Hero, said:
“The new ONS figures show staffing cost pressures are easing, but they have not disappeared. Our data shows that the combination of slower hiring, but higher pay is putting real pressure on businesses.”
Manpower data
At the same time, ManpowerGroup’s latest UK Employment Outlook Survey paints a sobering picture: hiring plans for Q4 2025 have slumped to just +11% — the sharpest year-on-year and quarter-on-quarter decline globally. Employers face what the report calls a “perfect storm” of cost pressures, AI disruption and policy uncertainty, leading many to pause or slow recruitment.
Commenting on the figures, Manpower Group Director Petra Tagg highlighted the pressure these trends pose for managers in particular.
She said:
“Managers, facing headcount restrictions, are scrutinising ways they can maximise productivity with existing talent and resources.”
Opportunities highlighted too
With managers required to deliver growth without new headcount, to keep teams motivated amid uncertainty and to navigate the integration of AI and automation to increase productivity, their Health and Wellbeing will become crucial to business success. If employers don’t prioritise line manager wellbeing they risk facing a lethal cocktail of burnout, disengagement and attrition.
However, the reports do point to opportunities too. For example, employers are increasingly looking at how to build productivity by upskilling existing staff, especially in maximising AI tools. They are also rethinking working patterns and integrating digital tools.
