Graduate labour market in 2025
As 2025 gets underway we take a look at what we might expect from the graduate job market this year…
As the economy subsides, so will the graduate labour market
The economic news has not been great in the latter half of 2024. We're in economic decline again, and the increase to National Insurance that came in with the Budget has spooked employers a bit. The latter was far from unexpected, but now businesses can see the effects on wage bills and balance sheets, they're signalling caution.
The Recruitment and Employment Confederation (REC) reports a sharp decrease in permanent hiring and an increase in temps. And this is before President Trump brings in the tariffs he has promised, which will hit global business and economic prospects in general further, the UK being no exception.
But there are still roles available. To see what's on offer, search graduate jobs.
The Government will increase public sector recruitment
The Labour Party feel they were 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 and prisons all understaffed and under strain and although some belated pay rises might help, some of these workforces are finding it very difficult to maintain services.
The Government have the power to do something about this and, especially if they continue to struggle with popularity, will be increasingly likely to do something to alleviate staffing issues and show that they have the problem in hand. Expect to see some moves on graduate recruitment in 2025, probably in prisons, probation and teaching first as these have some of the clearest issues.
Take a closer look at the public services and administration sector.
AI may not take your jobs but it's a headache in recruitment
Artificial intelligence (AI) is not, so far, displacing loads of jobs as might have been feared a couple of years ago, but it's still having quite an impact. AI can produce decent cover letters and CVs, and so it makes sense for candidates to use them, and so they do. That means it's a lot easier for candidates to write a lot of relatively good job applications, quickly.
This means everyone is applying for all the jobs available, so even though there are more jobs than there used to be, they're all getting more applicants, all using the same tools, with largely identical applications. Recruiters are swamped, meaning they have to spend more resources to administer a recruitment round, which ultimately makes recruitment harder and more expensive. That may start to influence vacancy numbers.
If you want to stand out from the crowd, take a look at these tips on writing the perfect cover letter and CV.
What recruiters want to do is encourage applicants to use AI well - after all, it's likely to be a useful business skill - and discourage it being used badly. They don't want to stop it entirely but expect a lot more talk this year about how to limit it being used in applications. Read all about using generative AI in job applications.
More talk about Return to Office, but action? Not so sure
Towards the end of the year, we started to see more Return to Office (RTO) mandates from employers, particularly in the USA, and there has been chatter about whether hybrid working has had its day and is on the way out.
The change in American Government and the rise to power of tech moguls who are distinctly unimpressed by hybrid working may signal more public arguments in America, and that may have an impact on the thinking of USA headquartered multinationals who recruit in the UK. In addition, a weaker jobs market means some of the concerns employers had about losing their best employees and being unable to replace them might also seem to be subsiding.
In the UK, I don't see widespread RTO being likely this year. The UK is not the USA - hybrid working is more widespread here and will be tougher to reverse. There's also a wider acceptance that it's broadly working for businesses and employees. Any employer that expects workers back in the office five days a week will have to be confident that they can keep the staff they want to keep, and that would apply in few UK industries.
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- Take a look at our advice on applying for jobs.