Mid‑Year Market Check‑In: Navigating Budgets, Pay & Talent Supply

UK Hiring: Cooled, Not Collapsed

As we move into the autumn, we can reflect on the results for the first half of the year. The UK hiring landscape looks noticeably more cautious than it did this time last year.

According to the latest ONS data:

• UK job vacancies fell again in March-May to 736,000, down 63,000 on the previous quarter.

• That’s over 16% below last year’s levels and still 59,000 fewer than pre-pandemic norms (ONS, June 2025).

And it’s not just the number of roles that’s shifting. The KPMG/REC report shows declines in both permanent and temporary appointments, while wage growth remains high with average pay still rising at 5.2 - 5.8% year on year.

It’s not a crash. It’s a recalibration. Businesses are pressing pause, not just on hiring, but on what kind of hiring they do, and why. That makes this the perfect moment to rethink what good looks like in your talent strategy.

Retail in Focus: A Sector in Rebalance

The retail sector, as ever, mirrors broader economic shifts but with some sharper edges.

According to the British Retail Consortium, the UK retail workforce shrank by 93,000 roles in the last year and over 364,000 in the past decade. That’s more than the combined headcount of the UK’s fishing, steelmaking and automotive industries.

Most of these losses have come from part-time, flexible roles, particularly in brick-and-mortar retail.

And costs are rising fast. Employment related outgoings are up 10-13% across entry-level and part-time roles, fuelled by wage hikes and changes to National Insurance.

 This isn’t just a dip. It's a structural change. Retail roles are being reimagined or removed. The winners are those who adapt by creating roles that add measurable value to customer experience or operational efficiency.

Meanwhile:

• Retail job postings are falling faster than average. Openings are now 32,000 below pre‑pandemic levels, with Prism data showing retail among the hardest-hit for both temp and perm roles.

• Yet, consumer demand remains unpredictable, footfall is recovering, but spend is under pressure. That creates ongoing tension for retailers trying to right size their teams.

The challenge now is to stop thinking in terms of simply replacing headcount. Ask instead: ‘What does this part of the business really need to thrive in this climate?’ Sometimes it’s a different skillset. Sometimes it’s a short-term fix. But always it should be intentional.

Your Mid‑Year Hiring Toolkit

Whether you're scaling cautiously or stabilising, here’s how to adapt your talent approach for the second half of the year:

1. Lead with Clarity in Negotiations

Budget pressures are real, and candidates know it. But that doesn’t mean lowballing, it means transparency.

• Be upfront about what’s flexible and what’s fixed.

• Frame offers around total value, progression, flexibility, culture, not just pay.

• Where you can't offer more salary, offer clarity: structured reviews, clear success metrics, and development plans.

2. Rebuild Employer Brand for Today’s Market

Hiring fewer people doesn’t mean you should go quiet.

• Refresh your messaging to reflect how your company has evolved.

• Highlight retention stories not just benefits packages.

• Use quieter hiring periods to audit your online presence: is it compelling, current, and credible?

3. Screen for Potential, Not Perfection

With more candidates on the market, it’s tempting to chase the mythical ‘perfect fit.’ But this slows hiring and can lead to short term thinking.

• Focus on adaptability and mindset, especially in dynamic sectors like retail and D2C.

• Review your shortlisting criteria, are you filtering too hard on industry specifics or outdated templates?

• Use structured interviews to uncover capability and cultural alignment, not just past experience.

4. Speed Still Matters

Slower hiring markets don’t mean candidates are happy to wait.

• Keep the process warm, updates, feedback, visibility.

• Streamline where possible: fewer interview stages, faster decisions, better prep for interviewers.

• Treat internal approval delays as risks to hiring success, not admin.

Side-by-Side Snapshot: Retail vs. UK Labour Market

Retail talent strategy can’t be copy‑and‑paste from 2019. Or even 2022. It has to reflect a leaner, more agile future, where each hire plays a defined role in growth, cost control, or customer retention.

Mid-Year Checklist

Final Thoughts

This isn’t a time to freeze. It’s a time to focus.

The rest of 2025 won’t necessarily be easier but with a clear hiring strategy, sharper EVP, and stronger internal alignment, it can be more productive.

And if you’re wondering how to get started, we’d be glad to help.