 The first Recruitment Agency Benchmarking Report*, sheds light on the recruitment landscape across The United Kingdom (UK) as the industry prepares for 2025.
The report highlights polarities in the UK job market:Â 39% of respondents note rising candidate numbers, while 56% see declining hiring rates across organisations, revealing a growing imbalance between talent demand and an oversupply of candidates and longer hiring times, with 39% of UK recruiters citing delays due to cautious decision-making amid economic uncertainty.
Meanwhile, candidates face intensified competition for fewer roles, noted by 64% of recruiters, while mass redundancies have added to the strain, their impact increasingly felt by 42% of recruiters.
UK recruiters face a job market defined by economic pressures, evolving technology, and fierce competition. Despite this, 56% remain optimistic about industry growth, even as rising client expectations – up 69% – intensify the demand for innovation and adaptability.
AI Adoption Accelerates, Yet Barriers Remain
AI is rapidly transforming recruitment, with 81% of UK agencies planning to expand its use in 2025. Currently, 72% of recruitment businesses use AI, primarily for streamlining administrative tasks (69%) and optimising job ads (58%).
The impact of AI is noticeable in the UK, with 67% of recruitment agencies reporting time savings and 56% seeing measurable return-on-investment. However, overcoming internal skill barriers is crucial to making AI a core part of recruitment rather than a missed opportunity.
Despite advancements in AI, confidence in its adoption is low, with only 19% of UK recruiters feeling very confident in implementing it effectively. While many recognise its benefits – like improved efficiency and hiring outcomes – 44% believe they lack the skills to adopt new AI technologies.
Martin Herbst, CEO of JobAdder says “The 2024 Benchmarks Report paints a picture of a job market that is both challenging and full of potential. On one hand, businesses are contending with economic uncertainty, increasing competition and overwhelming numbers of candidates. On the other hand, there are clear opportunities for those willing to adapt and innovate. Embracing technology is proving to be a game-changer for recruitment teams looking to streamline processes and improve outcomes for clients and candidates alike.”
Business Development Shifts to Adapt to Market Conditions
Business development is a growing focus for UK recruitment agencies, with 67% planning to invest in strategies next year. Winning new clients (75%) and strengthening relationships (72%) are top priorities in a competitive market.
Despite these efforts, only 6% of respondents are fully satisfied with their business development strategies. Success is largely defined by placements secured (56%) and new clients won (53%), highlighting the focus on tangible outcomes.
Competition in the recruitment sector remains intense, with 67% of recruiters noting increased rivalry among agencies. This has pushed many firms to embrace innovative, client-focused strategies to stand out.
Herbst continues: “Technology alone is not the solution. Businesses must invest in building the skills and expertise needed to maximise the value of these tools. Addressing internal gaps, improving workforce wellbeing, and fostering a culture of resilience will be critical to success in 2024 and beyond. Recruitment is, at its core, about people. By balancing strategic investments in innovation with a focus on business development, organisations can position themselves as leaders in an increasingly competitive and complex market.”
As 2025 approaches, UK recruiters face rising challenges but clear opportunities. With smart tech adoption, sharper business strategies, and a focus on people, agencies can turn pressures into progress and lead in an intensely competitive market.
*according to Employee Benefit Trends in UK SMEs, a new report from Howden Employee Benefits, in partnership with YouGov.
