Job vacancies in the United Kingdom have dropped at a faster pace than in comparable countries, signaling a significant shift in the nation’s labor market amid an ongoing economic slowdown.
According to data from recruitment platform Indeed, job postings in the UK have fallen by 23% as of November 29, 2024, compared to the same period last year. This sharp decline points to a cooling labor market, with job vacancies now 12% lower than before the COVID-19 pandemic.
This decrease surpasses the 14% drop reported in the official UK government data for the August to October period. The figures suggest a trend of growing caution among employers, as the economy struggles to gain momentum.
As the labor market softens, employers are increasingly in control, according to Jack Kennedy, an economist at Indeed. He pointed out that the fall in job postings, declining signing bonuses, slower wage growth, and a rise in zero-hours contracts are all indicators of this power shift.
“The balance of power has certainly swung towards employers as the labour market has softened,” Kennedy said.
The UK’s 23% drop in job vacancies is notably sharper than in other countries. France experienced a slightly smaller decline of 22%, while other nations, including the United States, Germany, Ireland, Canada, and Australia, saw more modest reductions ranging from 5% to 15%.
Indeed’s findings also reflect growing concerns among employers following the announcement of a £25 billion increase in employer payroll taxes in the October 30 budget by Finance Minister Rachel Reeves. These concerns are expected to further dampen hiring in 2025, with employers likely to proceed with caution in the year ahead.
Despite the drop in job vacancies, advertised starting salaries have risen. Indeed reports that salaries in November 2024 were 6.7% higher than the previous year, surpassing the 4.8% growth in average earnings reported by official data for the third quarter of 2024.
This higher wage growth has been a key factor in the Bank of England’s decision to slow down interest rate cuts. Notably, pay growth has been fastest in lower-paid positions, with salaries in low-wage roles rising by 7.6% year on year in October. This increase has been driven in part by a higher minimum wage. Conversely, high-wage jobs saw a more modest rise of 6.0%.
In a troubling development for low-income workers, the number of zero-hours contracts—positions offering no guaranteed hours—has increased to 1.9% of job postings, up from 1.1% in April 2022. This rise comes despite government pledges to reduce such contracts, raising concerns about job security for vulnerable workers.
The UK’s job market is clearly undergoing a significant transformation, and with mounting concerns about the economy, both employers and workers are likely to face continued challenges in the months ahead.
