The March UK Market Briefing shows a weaker labour market alongside tentative signs that the pace of decline was easing. Unemployment reached 5.2% in November–January, compared with 4.4% a year earlier. Youth unemployment rose to 16%, while payrolled employment was 109,000 lower year on year in February.
More candidates, uneven demand
Official vacancies fell to 721,000 for December–February, down 9.5% annually. Recruiter evidence was somewhat more encouraging: the KPMG/REC Permanent Placements Index rose to 49.2 in February, approaching the neutral 50 threshold while still indicating contraction.
Engineering was the only sector showing stronger permanent demand in the survey. Retail and hotel and catering recruitment remained much weaker. Candidate availability expanded rapidly, with redundancies and fewer opportunities contributing to the increase.
Regular pay growth slowed to 3.8% and total pay to 3.9%. Starting salary inflation also eased as recruiters reported a larger supply of candidates.
What this means for talent leaders
Employers have an opportunity to reach wider talent pools, review compensation and strengthen early-career pathways. However, greater availability does not remove specialist skills shortages, so hiring plans should reflect the needs of each sector and role.
The briefing’s outlook remained cautious. Energy costs, supply-chain disruption and geopolitical uncertainty could interrupt stabilisation, making flexible workforce planning and close monitoring of recruitment demand essential.