HR reaction | Jobs market squeezed as employer caution grows - ONS latest

The UK labour market showed further signs of strain this week as the number of payrolled employees dropped by 78,000 in March 2025, marking the sharpest fall since the height of the pandemic. 

The latest figures from the Office for National Statistics (ONS) reflect a cautious business environment, with persistent cost pressures, economic uncertainty and structural challenges driving hiring freezes and rising inactivity.

While the employment rate for those aged 16 to 64 edged up slightly to 75.1% in the three months to February, the unemployment rate held at 4.4%, higher than a year ago. Economic inactivity also fell marginally to 21.4%, suggesting some progress in bringing people back into the workforce. However, job vacancies declined for the 33rd consecutive period, dropping by 26,000 to 781,000, now below pre-pandemic levels for the first time since 2021.

Business confidence low as hiring slowdown bites

Jeanette Wheeler, Chief People Officer at MHR, described the labour market picture as “mixed”, but warned that many organisations are still struggling under the weight of ongoing instability.