Insights

UK Labour Market Sees Rise in Temporary Workers Amid Broader Signs of Weakness

The number of temporary workers in the UK surged by 9.8% year-on-year in the February to April 2025 quarter, reaching approximately 1.60 million, according to seasonally adjusted data released today by the Office for National Statistics (ONS).

This marked a slight 2.5% increase compared to the previous quarter (January to March 2025), with temporary workers now comprising 5.4% of the UK’s overall workforce.

A breakdown of the data revealed varied reasons behind the rise in temporary employment. Of the 1.60 million temporary workers:

Approximately 398,000 reported being in temporary roles due to an inability to secure permanent positions.

• Nearly 448,500 preferred temporary work.
• Around 143,500 were in training-related contracts.
• Roughly 610,300 cited other reasons.

Gender disparities were also evident. While the number of male temporary workers dipped slightly by 0.38% to around 719,500, the number of women in temporary roles jumped 19.9% to approximately 881,100 over the year.

Unemployment and Employment Trends

The broader labour market showed signs of strain. The UK unemployment rate for people aged 16 and over rose to 4.6% for the February to April 2025 period—up 0.2 percentage points from the previous quarter and higher than a year earlier. London reported the highest regional unemployment rate at 6.4%, while Northern Ireland had the lowest at 1.8%.

Despite this, the UK’s employment rate for those aged 16 to 64 climbed to 75.1%, continuing a quarterly upward trend. The highest employment rate was in the South West (80.0%), while the North East lagged at 68.2%.

The economic inactivity rate for the same age group fell to 21.3%, suggesting more people are entering or returning to the labour market. Regional disparities persisted, with the North East recording the highest inactivity rate (28.1%) and the South West the lowest (17.2%).

Payroll and Vacancies Decline

However, ONS figures show that the number of payrolled employees continues to fall. Between March and April 2025, the figure dropped by 55,000 (0.2%) and saw a yearly decline of 115,000 (0.4%). The early estimate for May 2025 showed a further monthly drop of 109,000 and a yearly decrease of 274,000, bringing the total to 30.2 million.

Job vacancies also continued to decline, falling by 63,000 to 736,000 between March and May 2025. This marks the 35th consecutive quarterly drop, with most sectors reporting reduced demand for new hires.

Earnings and Workforce Jobs

Wage growth remained solid but showed signs of deceleration. Average regular earnings (excluding bonuses) grew by 5.2%, while total earnings rose 5.3% annually. When adjusted for inflation:

• Real growth was 1.4% for regular pay and 1.5% for total pay using the CPIH index.
• Real growth was 2.1% and 2.3%, respectively, using the CPI measure.

The number of workforce jobs rose to 37.1 million in March 2025, up by 187,000 from the previous quarter and 304,000 year-on-year. Nonetheless, 47,000 working days were lost due to labour disputes in April alone.