Britain’s jobs market is facing growing strain as hiring slows and unemployment edges towards its highest level in more than a decade.
Businesses warn the cost of taking on staff has become increasingly difficult to absorb, deepening the slowdown across the labour market.
The warning comes from recruitment firm Robert Walters, which reported annual losses of £19.6million and said it cut nearly a quarter of its UK workforce last year.
Chief executive Toby Fowlston said Britain’s employment market is now experiencing its longest downturn on record.
He said the current slump is worse than the periods following the 2008 financial crisis and the coronavirus pandemic.
“It’s the longest downturn I have seen,” he said.
Mr Fowlston added that the labour market had previously experienced a “huge surge in hiring, a shift in working patterns and remote work” after Covid restrictions were lifted, but has since entered a prolonged period of decline.
Robert Walters posted losses of £19.6million for 2025, having recorded a modest £500,000 profit the previous year. The company placed fewer candidates for the third consecutive year, causing net fees to fall 15 per cent to £274.2million.
Employers have scaled back recruitment following a series of government measures that have driven up staffing costs.
Labour’s £25billion National Insurance increase has hit businesses hard, alongside steep rises in the minimum wage. The hourly rate will climb another 4.1 per cent in April, reaching £12.71.
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Companies are also preparing for the Employment Rights Act to take effect this year, which will grant additional protections to workers while imposing fresh administrative burdens on employers.
Business leaders have cautioned that the new legislation will deter them from filling positions or leave them “chronically overstaffed” during quieter periods when fewer employees are needed.
Mr Fowlston warned that the expense of taking on staff in Britain “can be prohibitive.”
“The cost of hiring in the UK can be prohibitive so we have made the decision to offshore some of our functional roles,” he said.
The Chancellor acknowledged during her Spring Statement last week that the figure would continue climbing this year
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PAOfficial figures reveal that joblessness reached 5.2 per cent by the close of 2025, marking a five-year peak.
When Labour entered Government, the unemployment rate stood at 4.1 per cent.
The Chancellor acknowledged during her Spring Statement last week that the figure would continue climbing this year, with Treasury forecasts pointing to 5.3 per cent.
Industry bodies paint an even bleaker picture. The British Chambers of Commerce has warned that unemployment could reach 5.5 per cent by December, which would represent the highest level since 2015.
Mr Walters slashed its British workforce by nearly a quarter during 2025, though the company declined to specify exact numbers. The firm has also relocated some basic head office functions to Manila and India to reduce expenses.
outh unemployment has surged to 16.1 per cent, an 11-year high, with projections suggesting it could climb further to 17.1 per cent
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paYoung workers face particularly severe difficulties. Youth unemployment has surged to 16.1 per cent, an 11-year high, with projections suggesting it could climb further to 17.1 per cent.
Artificial intelligence is compounding difficulties for entry-level candidates, with employers increasingly deploying the technology for routine tasks previously handled by graduates and junior staff.
“The younger generation want to work and get into the office, but they are dealing with a very challenging market,” Mr Fowlston said.
Shares in Robert Walters dropped more than seven per cent following the announcement.