Year in Review – UK Regional Labour Market Trends, January 2025
Key findings include:
- The UK labor market remained largely stable, with 393,906 professional vacancies
- Greater London increased its share of total vacancies, rising from 34.4% in 2023 to 36.8%
- The Technology sector recorded the strongest growth with vacancies rising 18.9%
- Aviva, a leading name in the Insurance sector, recorded a 20.0% year-on-year increase
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In January, declining consumer confidence led to reduced spending and weaker business expectations, heightening recession risks in the UK. Retail and consumer services were hit hardest, but wider concerns persist about falling investment across industries. AI continues to reshape business operations, with financial services leading adoption, while the energy sector is poised for major change, supported by government investment in clean tech and AI. Real estate and construction remain priorities, with housing targets and planning reforms likely to drive regional change, especially in the Southeast. London’s hiring rose 5.1% in 2024, while regional activity declined. The U.S. may impose higher tariffs, raising questions around the future of UK trade negotiations.
Regional Hiring Divergence Deepens as Political Pressures Mount
Regional disparities in recruitment activity underscore growing economic imbalances across the UK. In 2024, London stood out as the only region to register year-on-year growth, increasing its share of total vacancies from 34.4% to 36.8%. In contrast, the Midlands and Wales experienced the steepest contraction, with vacancies falling 9.1%, followed by Northern regions with an 8.5% drop. While Scotland and the South proved relatively resilient, the broader trend highlights weakening labour demand outside the capital.
The West Midlands and Yorkshire recorded double-digit declines, raising concerns about structural underinvestment. With Reform Party momentum concentrated in Labour’s traditional heartlands, the political stakes are high. For the Government, reversing regional stagnation is now a strategic imperative.
Sectoral Shifts Reflect AI Momentum and Policy Priorities
The UK job market in 2024 reveals sharp divergences across sectors, driven by structural change and policy direction. Technology led industry growth, with vacancies up 18.9% to 57,902—boosting its share of total vacancies to 14.7%. Real Estate & Construction followed, rising 10.6%, fuelled by housing-focused government initiatives. In contrast, traditional sectors struggled: Banking and Insurance both saw 11.4% declines, while Retail and CGS suffered the steepest fall, down 30.3%—reflecting weakened consumer confidence.
Functionally, IT remained dominant, but vacancies declined 7.5%. Sales hiring surged by 12.9%, suggesting renewed commercial focus. Marketing & PR remained stable, while accounting roles held steady despite a slight drop in demand.
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In 2024, only six of the UK’s top 20 hiring companies reported year-on-year growth in vacancies, underscoring the strain major employers face following the recent budget. Turner & Townsend led with 7,950 vacancies, up 2.3%, benefiting from strong public investment in construction. AECOM followed with 5,540 roles—a 27.2% rise—as it undergoes leadership transition and strategic realignment. Balfour Beatty posted the strongest growth, with a 54.7% surge to 2,730 vacancies.
In contrast, all six top-hiring banks saw declines, including Barclays, which dropped 44.3%. While insurers like Aviva are investing in AI and tech, questions persist around future skill demands. Across sectors, AI adoption continues to reshape long-term workforce dynamics.
Delve into UK recruitment trends analysis to gain insights that shape the market!
All data featured in this report is available in the Vacancy Analytics platform, which is updated in real-time and allows for interactive analysis, giving you the power to drill into trends to identify the key insights you need to power your business.
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