Recruitment Market Update Summer 2025: A Hard Reset in Hiring?

Recruitment Market Update Summer 2025: A Hard Reset in Hiring?

Recent updates from Hays, one of the world’s largest recruitment firms, paint a sober picture of the global hiring landscape. The company’s latest trading update confirmed what many in the industry have been feeling for months: we’re in the midst of a prolonged hiring downturn — the deepest since around 2000.

So, what’s actually happening, and what should employers, candidates and recruiters make of it?

Hiring Activity Falls Across the Board

Hays has issued a profit warning, slashing its forecast operating profit to £45 million — down from £105 million a year ago and well below analysts’ expectations. At the core of this is a sharp drop in hiring activity:

  • Global net fees are down 9% year-on-year.
  • Permanent recruitment has taken the hardest hit, falling by 14%.
  • Temporary and contract hiring has fared better, but is still down 5%.

The drop in permanent roles suggests that many businesses are still holding off on long-term commitments, opting instead for short-term flexibility.

Regional Trends: The UK and Germany Take a Hit

The UK and Ireland have seen a 13% decline in net fees — not surprising when set against recent data showing roughly 250,000 job losses and unemployment ticking up to 4.6%. Germany, typically Hays’ most profitable region (accounting for around 65% of group profit), has also faltered, with fees dropping around 5%. A slowdown in the automotive sector and uncertainty over tariffs are cited as contributing factors.

Elsewhere:

  • Australia and New Zealand: –9%
  • France and other parts of Europe: –13%
  • Asia: –3%
  • Americas: relatively flat, with North America even showing a 5% uptick

These figures underline how broad the downturn is — but also that it’s not uniform.

Temporary & Executive Search Holds Up

The relative resilience of temporary hiring experienced by Hayes underscores a consistent theme: businesses are reluctant to commit to permanent headcount growth but are still engaging contingent talent to keep operations moving. For recruiters, this means temporary and contract desks are currently the more stable revenue stream.

At CJPI, we are also finding the executive search market to be returning to buoyancy, with many of these leaders being brought in as wider strategy and transformation execution. Increasingly, private equity are using leadership talent as a lever to achieve their objectives in a more challenging economic environment. With an imbalance in supply and demand at the senior level, this is also a great opportunity for those organisations who are looking further ahead.

A Labour Market in Stasis, Not Collapse

Despite the hiring freeze for many, unemployment figures haven’t surged dramatically. What we’re seeing instead is “labour hoarding” — organisations are holding onto the talent they have, even if they’re not expanding. That can mask how challenging the market has become for recruiters and jobseekers alike.

Hays’ Response: Cutting Costs, Trimming Fat

With revenues falling, Hays has moved swiftly to cut costs. The company has already made significant reductions in back-office headcount (–18%) and trimmed discretionary spending. Productivity is now under the microscope, with future headcount reductions possible as part of an efficiency drive.

No Quick Rebound on the Horizon

Perhaps most tellingly, Hays is not expecting a quick recovery. The company has warned that these conditions are likely to continue well into the 2026 financial year — a signal that the current environment is more structural than seasonal.

What This Means in Practice

For Employers:

  • It’s a buyer’s market. Salary inflation has cooled, and candidates are more cautious about moving.
  • Temporary and contract arrangements offer flexibility and access to skills without long-term commitment.
  • A slow hiring market is an opportunity to strengthen employer branding and pipelines ahead of a future rebound.

For Candidates:

  • The permanent job market is subdued — patience is key.
  • Contract roles or project-based work may be a strategic stepping stone.
  • Upskilling and leveraging developments like AI is critical to stand out.
  • Being visible to headhunters is more important than ever.

For Recruiters:

  • Focus on areas of resilience, especially interim and contract hiring.
  • Drive efficiency and accuracy, not just activity — the market rewards this now.
  • Stay close to clients, even if they aren’t hiring today. Many are paused, not gone.
  • Add value beyond transactional recruitment and help clients make the most of their hiring activity.

In Summary

Much of the recruitment market appears to be undergoing a broad, hard reset. We’re not in a hiring collapse, but we are in a deep freeze — and according to Hays, it may take another 12–18 months to thaw. The firms that come through this period strongest will be the ones that adapt quickly, streamline their approach, and double down on relationships.

If you are a recruitment business looking to take steps to transform and navigate the current landscape, our corporate consulting or SME consulting team could help. If you are a leader who finds themself in a transition in your career, considering executive outplacement may be a wise investment.

CJPI Insights
CJPI Insights
CJPI Insights Editor
www.cjpi.com/insights

This post has been published by the CJPI Insights Editorial Team, compiling the best insights and research from our experts.

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