Increased Losses at Global Recruitment Firm Despite Revenue Surpassing £2 Billion Mark
In the midst of 2025, the UK's recruitment market reveals a subdued landscape, marked by a decline in recruitment activity, falling vacancy levels, and cautious hiring amidst economic uncertainty.
Recent months have seen a sharp drop in recruitment activity, with both permanent placements and temporary billings noticeably decreasing. This downturn is linked to weak employer confidence, stemming from ongoing economic uncertainty, geopolitical risks, and increased employment costs such as National Insurance hikes.
Vacancy levels are at a four-year low, signalling reduced demand for workers across many sectors, particularly retail, hospitality, and clerical roles. Meanwhile, candidate supply is on the rise, partly due to redundancies and heightened job insecurity. However, this increase in candidate supply has dampened wage growth, with starting salary inflation at its lowest level in nearly four-and-a-half years, and pay growth for both permanent and temporary workers slowing considerably.
Employers are adopting a wait-and-see approach, often delaying recruitment decisions, resulting in greater month-to-month volatility in the labor market. The macro-economic backdrop includes budgetary pressures, tax rises, and cost increases that have curtailed recruitment budgets and growth opportunities for recruitment firms. EBITDA multiples for recruitment companies are also down, reflecting market uncertainty and diminished exit valuations.
Despite rising nominal wages, real wage growth remains modest, constrained by inflation. This further impacts recruitment costs and employer hiring capacity. Regional impacts vary, but the South of England has seen the steepest reductions in permanent staff appointments.
Some positive signs are emerging, such as a 8.1% rise in job postings in London in June 2024. REC chief executive Neil Carberry described this rise as a positive "leading indicator" for trends improving across the country.
However, financial performance for recruitment firms is under pressure. NES Fircroft, a UK-headquartered global recruitment giant, posted a pre-tax loss of $67.7m for the 12 months ending October 2024. Its group net fee income fell by 14% to £140m, and its headcount reduced by the same percentage. Similarly, London-listed recruiters Hays and PageGroup reported a gross profit fall and operating losses during the first half of their financial years.
James Reed, the chairman and CEO of recruitment giant Reed, stated that the UK jobs market is the worst he has ever seen after 35 consecutive months of decline. Jobs website Adzuna also reported a pre-tax loss of £276,797 for the 12 months to 30 June 2024, after achieving a pre-tax profit of £1.5m in the prior year, due to a "turbulent macro-economic environment and reduced recruitment advertising activity".
In light of these challenges, Hays is now forecasting pre-exceptional operating profits of around £45m in 2025, significantly below analyst consensus of £56.4m. The current UK recruitment market presents a challenging environment for both employers and job seekers, requiring adaptability and resilience in the face of ongoing economic volatility.
[1] REC and Lightcast (2025). UK Jobs Market Report. [Online] Available: https://www.rec.uk.com/docs/default-source/rec-reports/rec-uk-jobs-market-report-may-2025.pdf [2] Hays (2025). Hays Half Year Results. [Online] Available: https://www.hays.com/gb/en/investors/results-centre/half-year-results-2025 [3] PageGroup (2025). PageGroup Half Year Results. [Online] Available: https://www.pagegroup.com/investors/results-centre/half-year-results-2025 [4] Adzuna (2025). Adzuna Annual Results. [Online] Available: https://www.adzuna.co.uk/investors/results-centre/annual-results-2025 [5] Office for National Statistics (2025). Average Weekly Earnings. [Online] Available: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/timeseries/ee0003/2025-04-15
- The decline in recruitment activity is linked not only to economic uncertainty, but also to increased employment costs, such as National Insurance hikes, and financial pressures due to tax rises and cost increases.
- Despite a 8.1% rise in job postings in London in June 2024, the UK jobs market is facing an ongoing volatile environment, as indicated by the falling vacancy levels, slowing wage growth, and reduced demand for workers across various sectors like retail, hospitality, and clerical roles.
- Amidst this challenging recruitment market, the finance sector seems to be showing some resilience, as indicated by the fact that NES Fircroft, a UK-headquartered global recruitment giant, operates primarily in the energy, engineering, and financial services sectors, and despite a 14% fall in its group net fee income, it is still generating revenue from these sectors.
