April's Market Insights

Labour Market Overview

The latest ONS data shows that:

• The UK unemployment rate remained broadly stable at 4.4%, with 1.574 million people unemployed.
• Unemployment remains significantly higher among younger people, particularly those aged 16–17 (25.9%) and 18–24 (13.3%).
• The employment rate rose slightly to 75.1%, with 33.99 million people in work.
• The economic inactivity rate declined slightly to 21.4%, 230,000 lower than a year ago. However, 9.224 million people remain economically inactive, which is 221,000 more than before the pandemic.
• Vacancies fell to 781,000, marking the 33rd consecutive quarterly decline, although still 15,000 above pre-COVID levels. There are now 2.0 unemployed people per vacancy (December 2024 to February 2025), up from the previous quarter.
• The number of payrolled employees in March 2025 fell by 78,000 to 30.3 million, though still up 50,000 over the year and 1.28 million higher than pre-pandemic.
• Annual regular pay growth (excluding bonuses) was 5.9%, and 5.6% including bonuses. When adjusted for inflation, real regular pay grew by 2.1% and total pay by 1.9%.
• The claimant count rose both monthly and annually to 1.776 million, reflecting those receiving benefits mainly due to unemployment.
• Redundancies remained steady at 4.0 per 1,000 employees, similar to both the previous quarter and the same period last year.
• A total of 52,000 working days were lost due to labour disputes in February 2025, a slight increase on the previous month.

The House of Commons Library has published its research briefing on UK Labour Market Statistics and Youth employment statistics with a detailed look behind the latest numbers.

The OBR’s March 2025 economic and fiscal outlook noted:

• UK adult population revised upwards by 500,000 (due to higher net migration)
• Labour force also up by 500,000
• Labour supply (total hours worked) is 1.4% higher than forecast

The British Chamber of Commerce latest Quarterly Recruitment Outlook found:

• Only 20% of businesses have reported an increase in their workforce, down from 24%
• 17% reported a decline in the workforce
• 73% say labour costs are creating pressure to put up prices
• Of those recruiting, 76% faced difficulties, down from 79%
• 20% have reduced their training investment over the last three months

The Resolution Foundation Briefing Minimum wage, maximum pressure looks at the impact of the 2025’s minimum wage and employers NICs increases. It says that most workers will end up absorbing much of the higher NICs in the form of lower pay but of course, pay cannot fall for workers at or near the minimum wage. The Resolution Foundation judge that the combined effect of these changes will reduce total employment by 80,000, especially amongst low paid workers.

Totaljobs’ latest research focused on what benefits workers want and found the top motivator was still salary (72%), but benefits play a crucial role in job satisfaction. 66% of workers say they would forgo a pay rise for their most desired benefit: flexible working.

Professional service business, AON, have published their 2025 Employee Sentiment Study which provides insights into understanding the expectations of today’s workforce. Key findings:

• 65% of employees are either in the process of moving employers or might/will seek new employment in the next 12 months
• 25% feel undervalued
• 44% say employers should help employees to save for retirement/long term needs
• 43% say employers should support employee wellbeing

The Chartered Institute of Personnel and Development (CIPD) reports that employers are still grappling with effects of the Covid pandemic five years on. The data shows that:

• More workers now have flexibility around the hours they work
• Hybrid working remains commonplace
• Many employees now have a more transactional view of work

The Keep Britain Working Review led by Sir Charles Mayfield found:

• 800,000 more working-age people are now economically inactive due to health reasons than in 2019
• Over 2 million report work-limiting health conditions
• The sharpest rise in inactivity is among young people (+77%)
• 530,000 young people cite mental health as their main health condition
• Inactivity could rise by a further 600,000 by 2030

Unemployment is expected to peak at 1.6 million in 2025. The Government has announced the rollout of the new Employment Support programme, with West London becoming the first area to receive funding under the DWP’s ‘Connect to Work’ programme. This programme aims to support 100,000 people per year. A £42.8 million investment will fund five years of tailored support to disabled people, those with health conditions and people facing complex barriers to employment.

Additionally, the government has also launched the first of nine ‘trailblazer’ initiatives focussed on tackling economic inactivity and boosting employment. The pilot scheme in South Yorkshire will support 7,800 people in its first year, with the goal of helping up to 3,000 individuals return to, or remain in work.

HR Grapevine reports that it is one year to go before the state pension age rises to 67. This will be the age at which most Britons can realistically consider retiring. But are employers ready to have more older employees? There is concern that at the very time workplaces will start to get even older, age bias and discrimination is not improving. Data suggests that older workers receive less training than young workers, and age discrimination is the one form of discrimination that employees feel the most.

The Centre for Aging Better’s latest The State of Ageing 2025  has been published. Key findings:

• The older population is growing in numbers and as a proportion of the population, with the over 85s being the fastest growing segment
• 500,000 people aged 50 to 65 who have left the workforce due to health reasons would return if the right support was in place
• The older population is growing more diverse as those from Black and Minority Ethnic (BAME) backgrounds are ageing

Recruitment agency Randstad in partnership with Mumsnet has published the Working Parents Report 2025. Key findings:

• 78% of dads feel their return to work is too soon
• Only 10% of mums feel positive about returning to work
• 68% of mums said having children negatively affected their career
• 58% of mums had to take time off due to sick children
• 49% of mums said they had to reduce their hours

One of the report’s recommendations is that parents are offered more flexibility but are still offered career progression.

LinkedIn’s inaugural report Skills on the Rise 2025 looks at the fastest-growing skills in today’s world of work. LinkedIn data reveals that by 2030 70% of the skills used in most jobs will change, with AI emerging as a catalyst. The top fastest-growing skills in the UK today are Relationship Building, Strategic Thinking and AI Literacy.

New research released by the Office for Veterans’ Affairs (OVA) and the Forces Employment Charity (FEC) highlights the value veterans bring to the workforce. A new initiative, Op ASCEND | Forces Employment Charity, supports employers to hire veterans with transferable skills.

The Home Office has published the latest visa application which provides statistics on the numbers of people with the intention to enter the UK for work, study and family reasons. Here are the numbers of visa applications in March 2025:

• 1,700 Health and care worker visa
• 3,400 Skilled worker visa
• 3,800 Skilled worker dependent visa

There were 22,600 applications for the Youth Mobility Scheme visas in the year ending March 2025. 9 % decrease on the previous year. There were 35,800 applications for the Seasonal Worker visa in the year ending March 2025, a 1% decrease on the previous year. 

The Institute of Government has published a paper on why government should introduce an annual migration plan. UK Governments have failed to deliver their signature commitments on migration policy. Most have promised lower numbers only to see net migration rise, to reach record highs for most of the past five years. 

The Government is due to publish it's Immigration White Paper shortly. It will need to make choices between controlling migration and business needs. To do this, the IFG is recommending that the government should commit to a new annual migration plan. 

The Home Office has published the full list of new immigration and nationality fees effective from 9th April 2025. 

Centuro Global's new report warns the Skilled worker visa route has become too broad and restrictive, limiting firms' ability to fill specialised roles. 

UK in a Changing Europe reports on HMRC data that indicates that non-EU migration is driving UK job growth. New HMRC data on 'payrolled employments by nationality' show a continued sharp rise in those of non-EU origin, now up by almost 2 million, or close to 90% compared to pre-pandemic levels. Meanwhile, those of EU origin are down by about 300,000, while those of UK origin are roughly flat.