Future employer optimism at a two-year high, according to the REC
In a positive turn of events, the Recruitment & Employment Confederation (REC) JobsOutlook survey for Q2 2025 indicates a significant improvement in employer confidence, marking the highest level in over two years. The confidence level improved by 15 percentage points, reaching a net -20, as businesses shake off concerns caused by previous increases in national insurance contributions, inflation, and policy costs [1][2].
This optimism is reflected in rising hiring intentions across all forms of labour supply, with particularly strong activity in London, which often serves as a bellwether for trends [2]. The survey also revealed an eight-point rise in medium-term temporary/contract hiring intent experienced across the quarter [1].
However, broader economic data present a more cautious picture. For instance, the Office for National Statistics reports a continued decrease in job vacancies, marking the 36th consecutive quarterly drop [4]. Similarly, the ICAEW Business Confidence Monitor shows sector variations, with manufacturing and retail sectors exhibiting ongoing negative sentiment, while IT & Communications and construction sectors remain relatively confident [3].
Despite these mixed signals, the improving employers' confidence and hiring intentions are indicative of a potential economic recovery in 2025 [1][2]. Encouragingly, breakthroughs in international trade, stable inflation, and a year of political stability are helping to unfreeze investment plans and move employers from delaying recruitment to hopeful hiring in the second half of 2025 [1][2].
The medium-term permanent outlook sentiment (next four to 12 months) improved by six points, now at net +15%, and the balance of short-term temporary hiring intentions surged in the three months to June, now at net +12% [1]. The short-term permanent hiring outlook for the next three months improved by three points, now at net +13 [1].
The JobsOutlook report suggests that businesses are beginning to shake off concerns on investment and hiring that they have carried for almost three years [1]. The change in employers' confidence suggests a steady two-year trend towards positive territory, with a possible turnaround in 2025 [1].
The recently announced roadmap for the Employment Rights Bill is considered a positive step in offering some certainty [1]. REC Chief Executive Neil Carberry emphasized the need for a balanced Budget that supports business growth and addresses public finances [5]. The report supports the scattered signs of improving demand in the recent REC/KPMG Report on Jobs and the REC/Lightcast Labour Market Tracker jobs data [1].
[1] Recruitment & Employment Confederation (REC), JobsOutlook survey, Q2 2025. [2] Office for National Statistics, Labour Market Statistics, June 2025. [3] ICAEW Business Confidence Monitor, Q2 2025. [4] Office for National Statistics, Vacancy Statistics, June 2025. [5] Recruitment & Employment Confederation (REC), Press Release, REC Chief Executive Statement on the Q2 2025 JobsOutlook survey.
- The rising hiring intentions across all forms of labour supply, as indicated by the Recruitment & Employment Confederation (REC) JobsOutlook survey for Q2 2025, suggests that businesses are becoming more confident in the finance and business sectors.
- The improving employers' confidence and hiring intentions, as evidenced by the REC JobsOutlook survey and other economic data, could potentially lead to a recovery in the finance and business sectors in 2025.
