Frozen Hiring Plans Show Signs of Defrosting in Q3

As the UK labour market begins to show tentative signs of recovery, Gi Group Holding is urging businesses to prepare for a shift in hiring momentum. Chief Regional Officer for UK & Ireland Paulo Canoa says that while conditions remain challenging, the UK’s slowdown in hiring decline and the business’s return to growth in September signal a critical moment for employers to re-engage with workforce planning and talent strategies. 

According to the latest ONS data, the UK employment rate rose slightly to 75.2% between May and July 2025, while economic inactivity decreased year-on-year. Although job vacancies continue to fall, currently at 717,000, down for the 13th consecutive quarter, the pace of decline has eased, suggesting the market may be finding its floor.

“After nearly three years of decline in both permanent and temporary placements, we’re finally seeing signs that the market is stabilising,” said Paulo. “September marked our first month of growth this year, which is a significant milestone given the headwinds we’ve been navigating.”

Paulo Canoa, Country Manager Gi Group UK

Indeed, the headwinds remain stiff. Political uncertainty throughout 2023, combined with inflation, high interest rates, and a volatile global trade landscape, continue to suppress job creation. Domestically, rising National Insurance and a sharp hike in the National Minimum Wage have prompted businesses to rein in hiring. Meanwhile, despite industrial investment announcements and clean-energy job pledges, business confidence has yet to fully rebound.

Yet, amid the broader market malaise, Gi Group is outperforming. The global staffing firm created and managed more than 21,000 job opportunities each quarter in 2025 so far and maintained active partnerships with approximately 1,800 clients, investing in its agile and responsive hiring tactics in a contracting sector.

“Even in what is arguably the most fragmented staffing market in the world, our ability to secure strategic contracts and support a wide range of businesses has set us apart,” Paulo added. “Our clients trust us to deliver, even in the most challenging market conditions.”

The current labour market paints a complex picture. Unemployment stands at 4.8%, a rise on both the quarter and the year, while the number of payrolled employees has dropped by 100,000 compared to the previous year. Meanwhile, there are now 2.4 unemployed individuals for every job vacancy, an increase from 1.0 during the hiring peak. This all indicates a stark structural imbalance.

Nevertheless, the early indicators in Q3 suggest that the freeze may be starting to thaw. For companies and workers alike, the coming months could mark the beginning of a more stable employment landscape. However, with the Autumn Budget imminent, many businesses are bracing for potential policy shifts that could either support recovery or introduce fresh challenges. As the industry watches for further signs of momentum in Q4 and beyond, Gi Group are proving that with resilience, adaptability, and strategic execution, it’s possible to continue to drive employment across the country.