Labour Market Outlook

The CIPD’s quarterly Labour Market Outlook is one of the most authoritative employment indicators in the UK and provides forward-looking labour market data and analysis on employers’ recruitment, redundancy and pay intentions.

The LMO is published every February, May, August and November. Its insights help HR professionals and employers anticipate labour market movements and to adjust and prepare accordingly. It also feeds into our consultations and engagement with the UK Government and policy-makers.

Labour Market Outlook – Autumn 2025

One in six employers say AI will shrink headcount as hiring confidence remains at record low

Our latest Labour Market Outlook finds that 17% of employers say the use of AI will cause the number of staff within their organisation to decrease in the next 12 months. A quarter of those employers are expecting the reduction to be greater than 10% with employers saying that clerical, junior managerial, professional and administrator roles are the most likely to be reduced.

At present the UK labour market at present remains stable, with almost all our indicators remaining similar to the previous quarter. Our net employment balance indicator remains stable at +9, however this is still at an unprecedented low outside of the pandemic. Within the public sector, employment intentions remain below zero and have fallen to −8 this quarter meaning more public sector employers expect staff numbers to decrease rather than increase over the next three months.

For the sixth consecutive quarter, the median basic pay increase stands at 3% overall, and this is the case across all sectors, despite inflation rising in the same period.

As we transition to a more AI-driven economy, employers should look at the type of jobs and skills they have in their workforces to help understand areas where AI is likely to lead to job displacement, and consider training and redeployment opportunities for affected staff.

Download the full report to access in-depth data, sector-specific breakdowns, and expert analysis to inform your workforce planning and strategic decision-making.

Labour Market Outlook - Autumn 2025

Download the full report

PDF document 942.7 KB

	Employer confidence remains low The net employment balance is stable this quarter at +9 but remains at an unprecedented low outside of the pandemic.
	Staff decrease expected in the public sector Employment intentions in the public sector remain below zero and have fallen to −8 this quarter meaning more public sector employers expect staff numbers to decrease rather than increase over the next three months.
	Pay expectations remain even The median expected basic pay increase remains at 3% overall, and across all sectors for the sixth consecutive quarter
	AI tools anticipated impact on headcount 17% expect the use of AI will reduce their headcount in the next 12 months, with employers saying the roles they believe are the most likely to be reduced are clerical, junior managerial, professional and administrator roles.