It’s time to look forward to a new year in the labour market, so here are my jobs market predictions for 2025, explains Charlie Ball for Prospects at Jisc.
2024 was a story of an election that may have impacted the UK as a whole but didn’t do a great deal to the graduate jobs market.
Instead, we just saw a slow, shallow deflation of job prospects as the air came out of the economy in general. But it was still a significant year in a couple of key respects.
The most obvious, and the one that will have a big impact in 2025, was the election of Donald Trump in the US and the likely disruption he’ll bring to the global economy.
And in the UK, as the year went on, the labour market, which had become quite uncoupled from wider economic performance, started to come back into alignment as worker shortages abated somewhat (although not entirely).
So, here are three things to look out for in 2025.
1. The labour market is going to continue to get trickier for new candidates
The economic news has not been great in the latter half of 2024, we’re in economic contraction again, and NI went up in the Budget.
The latter was far from unexpected, but now businesses can see the effects on wage bills and balance sheets, they’re signalling caution. REC, an excellent early indicator of employment shifts, reports a sharp decrease in permanent hiring and an upping of temps, whilst the British Chambers of Commerce, hugely valuable on small businesses, notes concerns about tax and a worrying low level of commitment to investment.
And this is before President Trump brings in his very heavily trailed tariffs, which will hit UK plc and economic prospects in general further. With all this in mind, don’t expect a labour market bounce any time soon except if…
2. The government will pull some (more) levers on public sector recruitment sooner or later
This government feels it was elected to fix public services, and they spent the last Budget amassing cash to try to do that.
Public sector recruitment and retention is in a tricky state right now with health, social care, education, policing, prisons all understaffed and under strain and although some belated pay rises might help somewhat, some of these workforces are under a lot of pressure (this writer is particularly concerned about the teaching labour market).
The government have the power to do something about this and pressure is building. Expect to see some moves on graduate recruitment in 2025, probably in prisons, probation and teaching first.
4. AI may not take your jobs but it’s a headache in recruitment
As the ISE have been telling us in detail, we have a real-life Tragedy of the Commons taking place in recruitment thanks to AI.
AI is good at writing covering letters and CVs, and so it makes sense for candidates to use them, and so they do. This lowers the barriers to entry to making an application, so the average candidate can make more applications of a generally better quality (at least in terms of spelling and grammar) than they used to be able to, and so they do.
This means everyone is applying for all the jobs available, so even though there are actually more jobs than there used to be, they’re all getting more applicants, all using the same tools, with largely identical applications and recruiters are swamped, which means they have to spend more resources to administer a recruitment round, which increases costs, which leads to fewer vacancies (the finite resource in question).
Interesting though this is from a philosophical standpoint, it is a difficult situation for all of us and challenges recruiters, applicants and those who support both in new ways. This will continue in 2025, I’m afraid.
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