The UK job market faces a sharper decline in vacancies compared to other major economies, new data from recruitment platform Indeed reveals.

UK job vacancies plunge 23%: Is this a sign of economic slowdown?

As of November 29, job vacancies in the United Kingdom were down 23% year-on-year, according to Indeed. This decline surpasses the 14% drop recorded in official government statistics covering August to October. Notably, UK job listings are now 12% lower than pre-pandemic levels, highlighting the continuing challenges facing the labour market.

Jack Kennedy, an economist at Indeed, observed: “The balance of power has certainly shifted towards employers. The labour market has softened significantly, as evidenced by falling job postings, declining signing bonuses, slowing wage growth, and a rise in zero-hours contracts.”

The UK’s steep decline in vacancies stands in contrast to countries like the United States, Germany, and Australia, where vacancy reductions ranged between 5% and 15%. Only France saw a comparable drop, with a 22% decline in job postings.

Why are UK employers reluctant to hire?

The downward trend in vacancies accelerated after Finance Minister Rachel Reeves introduced a £25 billion payroll tax increase in her October 30 budget. Indeed predicts cautious hiring will continue into 2025, reflecting growing uncertainty among businesses.

Additional factors contributing to the decline include:

• High wage growth: Advertised salaries rose 6.7% year-on-year, outpacing the 4.8% increase in average earnings reported in official data.
• Minimum wage impact: Pay for low-wage roles saw a significant 7.6% increase, while high-wage jobs experienced more modest growth of 6.0%.
• Rising zero-hours contracts: The prevalence of zero-hours contracts increased to 1.9% of job postings, up from 1.1% in April 2022, despite government pledges to restrict them.

The Recruitment and Employment Confederation (REC) also reported a sharp fall in worker demand in November, following the new Labour government’s first budget.

Global job market comparison: How the UK stacks up

Globally, the UK is among the hardest hit in terms of declining vacancies, with other economies such as the US and Germany showing far more resilience.

Indeed’s parent company, Japan’s Recruit Holdings, highlighted its global reach, operating in over 60 countries and boasting 580 million job seeker profiles. Despite its international scope, the stark figures from the UK job market underscore a unique set of economic challenges.

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