Understanding today’s complex labor market requires accurate data rather than just following headlines or anecdotes. For businesses and talent professionals, having reliable insights into hiring trends, wage movements, and worker expectations is essential for making informed decisions in these uncertain times.
My guest this week is Jack Kennedy, Senior Economist at Indeed; drawing from Indeed’s real-time analysis of millions of job postings, CVs, and marketplace behaviors, Indeed Hiring Lab‘s research provides a unique window into what’s happening in the job market. We’re focusing on the UK market in this conversation, but Jack does provide some broader global insights and highlights the many global commonalities when it comes to worker motivations, aging populations, and the impact of AI
In the interview, we discuss:
• The state of the UK labour market in early 2025
• How geopolitical issues are impacting hiring trends globally
• The surprising resilience of wages despite market cooling
• Primary motivators for job seekers in today’s market
• The truth about remote and hybrid work trends versus media narratives
• How AI is already reshaping employment and creating new opportunities
• A growing focus on neurodiversity in job postings
• Preparing for demographic challenges and an aging workforce
• The Labour market outlook for the next 12-18 months
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00:00
Matt Alder
Are labour markets truly returning to pre pandemic norms? Are return to the office mandates as widespread as the headline writers want us to believe? What’s the potential impact of rising employment costs, global trade wars and AI disruption? In this episode, we’re diving into the numbers to get some answers. Support for this podcast comes from indeed. They’re a brand that I’m sure you all know as the hiring and matching platform where employers can connect with over 580 million jobseeker profiles. But did you also know that their front row seat to the global economy gives them a massive data set which you can access for free? This allows you to see the latest information on job postings, salary trends and much more.
00:48
Matt Alder
Or did you know that Indeed’s new AI tools make it easier than ever for you to find and connect with active and passive job seekers? There’s much more to Indeed visit Indeed.com.
01:18
Matt Alder
Hi there. Welcome to episode 692 of Recruiting Future with me, Matt Alder. Understanding today’s complex labour markets requires accurate data rather than just following headlines or anecdotes. For businesses and talent professionals, having reliable insights into hiring trends, wage movements and worker expectations is essential for making informed decisions in these uncertain times. My guest this week is Jack Kennedy, Senior economist at indeed. Drawing from indeed’s real time analysis of marketplace behaviors and millions of job postings, INDEED Hiring Lab’s research provides a unique window into what’s happening in the job market. We’re focusing on the UK market in this conversation, but Jack does provide some broader global insights and highlights many global commonalities in worker motivations in aging populations and the impact of AI.
02:20
Matt Alder
Hi Jack, and welcome to the podcast.
02:22
Jack Kennedy
Hi Matt, thanks for having me.
02:24
Matt Alder
A pleasure to have you on the show. Please, could you introduce yourself and tell everyone what you do?
02:29
Jack Kennedy
Yeah so my name is Jack Kennedy. I’m economist at the Indeed Hiring Lab, covering the UK and Irish labour markets. I’ve got a background in global macroeconomic research. I’ve previously worked in financial institutions and since I’ve joined indeed, I’ve been part of the Hiring Lab team, which is our economic research arm. We sit independent from the business side of indeed. We’re not a revenue center for the company. Instead, our goal is to provide unbiased and objective global market data and analysis for a variety of audiences, including businesses, job seekers, the media, academics and policymakers. And as part of indeed, the world’s Largest job site. We analyze millions of data points across Indeed’s proprietary job postings, CV and marketplace behaviors to reveal emerging trends across the world. And all of that really gives us a front row seat into the global labor market.
03:28
Jack Kennedy
So we provide a lot of real time thought leadership on global labor market conditions, including things like hiring trends, salary information, popular skills and employer benefits.
03:39
Matt Alder
Fantastic stuff. So almost unbelievably, we’re almost at the end of the first quarter of 2025. I’m not quite sure. In some ways it feels like it’s been 100 years. In some ways it feels like it’s been three days. Tell us what’s happening in the UK labor market at the moment and what are some of the things that we need to watch out for?
03:57
Jack Kennedy
Yeah. So the UK labor market, like others worldwide, has been in a period of normalization over the last two to three years. Of course, we have exceptional post pandemic hiring boom. After economies reopened from COVID lockdowns, we saw lots of associated staff shortages across many sectors. If we cast our minds back to 2022, the labour market was really out of balance. We saw that demand for workers was greatly exceeding supply in a lot of sectors, which was really a temporary phenomenon. Covid really bent the labour market out of its previous shape and accelerated lots of changes in working patterns. But since then, we’ve seen a continuous gradual decline in job vacancies down from peaks. We’re pretty much back to pre pandemic levels now. But we’ve seen that unemployment stayed fairly low.
04:48
Jack Kennedy
We’ve seen that rebalancing of the labour market’s really been mostly done through a reduction in hiring demand that’s done most of the heavy lifting rather than widespread job losses, which is of course good from a macroeconomic perspective. When we look at the tightness of the labor market, we’re essentially back to a similar level to where were pre Covid. One of the metrics that we look at for assessing labour market tightness is the ratio of how many unemployed people we have for each vacancy in the UK economy. So we’re up from a low of 1 back in 2022 to about 1.9 now. So back to a situation when the labor market was considered relatively tight pre pandemic. And that’s essentially where we’re back to now. Which means that hiring conditions have eased somewhat, but they aren’t necessarily easy.
05:36
Jack Kennedy
We’ve also seen from a UK perspective, of course, the big thing on everybody’s minds right now is this big rise in employment costs. Being faced by employers, really, this. You know, we had the Chancellor’s budget announced back in October, and principally this increase employer national insurance contributions, as well as a 6.7% rise in the national living wage. So clearly that’s a big factor for a lot of employers at the moment. We also have this ongoing consultation period on the Government’s new workers rights package, albeit that’s not set to come into effect until 2026. So we do see quite considerable headwinds facing the UK labour market at the moment. And when we look at the latest INDEED data. So a metric that we produce in the hiring lab is our Indeed Job Postings Index.
06:27
Jack Kennedy
So we have an indicator looking at overall job postings in the uk, and we can compare that internationally to other markets. And actually, when we look at the largest economies, we see that the UK job market is actually the only one where job postings are currently below their pre pandemic baseline. We’re down 17% on where were back in early 2020, but actually that was the case even before the Chancellor’s budget last October when those measures were announced. So, actually, we haven’t really seen job postings crashing since then. We’ve seen quite a stable picture over recent months, so hopefully we continue to see that and we continue to see things like redundancies staying quite low.
07:11
Jack Kennedy
We’ve seen various pieces of survey data suggesting that companies are thinking of perhaps making more redundancies, but we haven’t actually seen that come through in the hard data to date.
07:20
Matt Alder
And it’s kind of a very disruptive time on the sort of the global political stage at the moment. Are those geopolitical issues having an impact on the UK market? Is that something that’s consistent around the world going on from that perspective?
07:35
Jack Kennedy
Yeah. So on top of those domestic factors, we are seeing that geoeconomics and geopolitics are also big factors presently. Clearly, there are a lot of global uncertainties at the moment, a lot of discussion around Trump, trade tariffs and ongoing global conflicts that could potentially have an impact on the world economy. So the picture particularly around those US tariffs remains somewhat uncertain. But we do know that the imposition of significant trade tariffs will lead to weaker global growth. Then we’ve seen that economic forecasts for the US and other leading economies have been revised lower in recent weeks and also UK forecasts revised lower. We’ve seen that uncertainty’s risen significantly. And one data point that looks at that is the Economic Policy Uncertainty Index. That’s based on analysis of newspaper articles that mention uncertainty that’s actually spiked to the highest since the COVID period.
08:34
Jack Kennedy
We also of course see that in global stock market volatility. So definitely a weaker global picture than were perhaps looking at a few months ago. But some countries are more in the firing line than others. For example, of course, economies like Canada, we’re already seeing some impact in our data. In fact, when we look at job postings in categories related to Canadian manufacturing, things like engineering production categories, we’re already seeing that job postings in some of those categories are starting to slide. It’s not all doom and gloom. I mean, there are some possible positives. For example, a potential peaceful resolution of war in Ukraine could be supportive for the global economy. And also things like higher military spending in Europe is likely to deliver a boost to certain sectors.
09:22
Jack Kennedy
But clearly any sort of breakdown in transatlantic corporation and things like tariffs and retaliatory actions are potential negatives to the global economy. Yeah, quite an uncertain picture.
09:34
Matt Alder
And in terms of wages, has the loosening of the market had an impact on wages?
09:40
Jack Kennedy
So what we’ve actually seen so far is that wages have been quite resilient to the cooling job market. So we had the latest ONS figures out yesterday and they showed annual wage growth in the UK running at close to 6%. Still, it’s down from a peak of near 8% back in 2023, but still quite elevated. That’s good for households. Of course, households are seeing their purchasing power being restored somewhat with wages rising faster than inflation after a period of high inflation and the cost of living crisis. But strong wage growth does make it quite tricky for the bank of England because it suggests that firms may need to raise their prices to offset higher startling costs, which could stoke inflation.
10:21
Jack Kennedy
So that could mean the bank of England’s able to make fewer interest rate cuts than it otherwise will be able to, which of course is not what people with mortgages want to see. So we’ve seen the bank of England maintaining their guidance that they’re likely to only cut interest rates gradually over coming months. We do see in our INDEED data that there are some signs of wage growth tentatively beginning to cool. So we have a metric called our indeed Wage tracker that measures annual growth in wages. And we saw that metric slowing in February.
10:53
Jack Kennedy
We saw that easing to a near three year low of 5.7% year on year, still quite high and still well above equivalent measures for European economies and also the US So we’re likely to see, of course, the national living wage uplift in April providing some short term support to wage growth. But against that backdrop of a slower hiring demand that we’re seeing, we are likely to see that support for strong wage growth gradually fading. And I do expect wage growth to gradually recede as the year progresses, albeit it’s likely to take some time to come down to levels where the bank of England would be comfortable with shifting to a fast pace of rate cuts.
11:32
Matt Alder
You kind of mentioned earlier the pandemic and how it sort of changed everything, and then we’ve kind of seen things settling back in some ways to where they were before it happened. Also kind of really made people think about their relationship with work and their job several years later. What are the main reasons that people are giving now for wanting to leave a current employer?
11:55
Jack Kennedy
Yeah, that’s right. And we do regular surveys of job seekers and they consistently tell us that higher pay is the number one motivator for people to look for a new job. That’s a pretty consistent picture, actually, across age groups and different industry sectors. It’s almost always higher pay. That’s the main reason why people are looking for a new job. But there are also other aspects that are important. Career development is always right up there amongst the top reasons for people to look for a new job, as well as benefits and flexibility, both in terms of location, flexibility, the ability to work on a remote or hybrid basis, or flexibility with work hours or scheduling. So we see all of those factors are quite consistently reported as kind of the main reasons why people are active in the market and looking for a new job.
12:53
Matt Alder
And diving into the remote hybrid work issue, there is that a consistent factor still. Is that growing? Has that dropped back a bit? Because obviously there are still huge amounts of. There’s a huge kind of narrative with companies trying to get people back to work, companies trying to get people back to the office and all of this kind of stuff. Is it how big an issue is it still?
13:15
Jack Kennedy
So this is quite an interesting one in our data. So contrary to the impression that you might get from the media, and as you rightly say, there’s been an awful lot of focus around return to office and lots of companies announcing tighter policies around office attendance and pushing for greater office attendance, actually, when we look at our data, we see quite a stable picture around remote and hybrid working. So another metric that we track is the share of job postings that mention remote or hybrid flexibility. And actually, for some time now, we’ve seen that share of job postings holding quite stable. About about 16% of job postings in the UK include remote or hybrid keywords. And that’s pretty close to the highest we’ve actually seen.
13:59
Jack Kennedy
So we’ve been tracking this for about five years now and we really haven’t seen a big reversal at all. So I think there’s more going on beneath the surface than the impression that you might get. From a glance at some of the media headlines, we see that actually job seekers are continuing to search for remote and hybrid at pretty elevated levels. Again, close to the highest that we’ve seen in recent years. About 2 1/2% of all searches on indeed include remote or hybrid keywords. Might not sound like a huge amount, but most people come onto indeed and search for a particular job title or a particular location. So the fact that they’re still very frequently searching specifically for remote or hybrid keywords is notable.
14:42
Jack Kennedy
So we definitely see in our conversations with employers as well that kind of remote and hybrid flexibility is still very important for attraction and retention. Particularly, for example, smaller businesses that need to compete for staff, compete for talent with larger rivals, perhaps with strong employer brands. So continuing to offer that differentiator in the marketplace is still a powerful recruitment tool.
15:07
Matt Alder
Yeah, I think that makes perfect sense because I think there is a really. It’s kind of a really great example of where the narrative in the media, which is, you know, normally driven by one big company telling everyone to get back to the office, is kind of dominates and actually what’s actually happening isn’t quite represented in that. What about, I suppose, continuing that theme, what about AI are you seeing that have an impact on the labor market jobs, reducing what’s kind of happening in that area? And how should employers and job seekers be preparing for what AI might bring to the labour market?
15:42
Jack Kennedy
Yeah, we’re already seeing the impacts of AI increasingly coming into the labor market. So we’ve done two major strands of research within the hiring lab on the AI impact. So firstly, we’ve done some research around the AI exposure side of things and the displacement impact or potentially enhancement. And then secondly, we’ve done a strand of research around the entirely new jobs being created by Genai. So as well as the kind of the disruption element, there’s also an element of entirely new jobs being created. So firstly, on the exposure side, we’re still evaluating the potential of AI, and in particular generative AI, but we do have a pretty good idea of what skills it’s best able to perform. And kind of mapping that to skills in various different job profiles, we can assess its strengths and weaknesses.
16:39
Jack Kennedy
So what we did with this round of research is we actually evaluated Genai’s ability to perform more than 2,800 individual work skills extracted from millions of indeed job postings across three dimensions. So firstly, its ability to provide theoretical or background knowledge. Secondly, its ability to solve problems related to a certain skill or task, and then thirdly, the necessity of physical presence to complete that skill or task. So how did we do that? We actually asked ChatGPT itself to rate its ability to perform various work tasks. And then we folded those ratings into an overall evaluation of how likely Genai is to replace a human in performing a specific skill. And what we found is essentially that Genai mostly augments human skills, but doesn’t replace them.
17:30
Jack Kennedy
Despite these rapid advances in Genai technology and these fears of an impending mass displacement of human workers, actually we found that human work skills are unlikely to be replaced in the workforce anytime soon. Of course, this is based on an important caveat. This is based on current iterations of generative AI technology is continually getting better. So if we run this analysis again and in the future, that we’re likely to see different results. But I think currently the current abilities of Genai is certainly best suited to applying its skills to help with relatively straightforward work tasks that require any modest problem solving and importantly, no hands on execution. We are seeing certain types of jobs.
18:21
Jack Kennedy
I was reading a very interesting research report earlier today about the declining computer programmer jobs in the US that’s already been seen quite sharply over the past couple of years. So there are particular niches of the labor market where we’re already seeing that kind of profound displacement impact. But more broadly, I think we’re still in the quite early days. And then the second piece of research that we did around this AI job creation, so we’ve been tracking the jobs that could be building, maintaining or end users of gen AI tools, for example, a marketing job that involves using those gen AI tools. So we’ve seen very rapid growth in those.
19:02
Jack Kennedy
And actually we’ve seen that between the launch of ChatGPT in late 2022 and the latest data that we have for early 2025, we’ve seen that rising from nearly zero to about 0.3% of all job postings on Indeed in the UK now still a very small share of the labor market, but growing very fast and clear sign of the technology potential to create new jobs and not just change existing ones. So in terms of what employees and job seekers can do, in terms of the takeaways, what they should do to be prepared for the future, we’re already seeing lots of employees integrating AI into work streams we all see and probably use new AI functionality in the everyday applications we all use.
19:46
Jack Kennedy
But of course, some are also looking at their workforce planning, seeing where they can dial back hiring instead use AI to perform certain tasks, particularly in a climate of cost pressures and rising staff costs, even more of a push towards automation and enhancing productivity. So really being prepared for that change, both from an employer and a worker perspective, continually focusing on opportunities for upskilling, reskilling, as job profiles are continuously going to evolve, that kind of open mindset and then, well, it’s become a cliche already. This phrase, AI won’t take your job, but the person using AI certainly will. Definitely a cliche, but there’s definitely a reason for that.
20:26
Matt Alder
No, absolutely. And again, that makes sense. As you say, this is all based on the technology as it exists today at the end of March 2025. And these things can change very quickly. One of the things that comes out in your data is the increase in the number of job postings containing the word neurodiversity. And I just wondered whether is that trend and if so, what do you think sort of driving that?
20:50
Jack Kennedy
Yeah, so we’ve seen that the share of job postings in the UK that mention neurodiversity keywords is nearly quadrupled over the past half a dozen years. So we’ve seen that rising from about 1% of all job postings back in 2018 up to nearly 4% by the end of 2024. Some of those jobs are working with or caring for neurodiverse individuals. But we’re also seeing that we’re seeing growth in job postings that are including phrases or statements like welcome neurodivergent candidates or we want to ensure that our recruitment process is inclusive as possible. Please speak to a recruiter about potential adjustments. So all of that does suggest employers increasingly widening the net and looking to neurodiverse candidates as a potential pool of underutilized talent.
21:46
Jack Kennedy
If we look at the stats around how many neurodiverse people there are in the UK, they actually suggest a labor pool of some 10 million people. And we know that employment rates for neurodiverse people are low, and that definitely looks to be a big pool of potentially underutilized talent. Couple of caveats that we flagged in it in our research. There are important questions around whether this kind of communication reflects genuine progress in workplace inclusion or merely changes in corporate communication. We see that several factors suggest a bit of a mix of both. We see that on the one hand, the rise does coincide with concrete actions from employers. We’ve seen that many large companies have launched dedicated neurodiversity hiring programmes or established workplace accommodation policies or employee resource groups. And we have seen that employment rates for neurodivergent workers have been on the rise.
22:44
Jack Kennedy
However, we do also see that the rapid rise in mentions could partially reflect an increased awareness of inclusive language without the corresponding organizational change. So we do see that some job postings may include that kind of language primarily for employer branding or compliance purposes, without that necessarily having the on the job infrastructure, training or adaptations needed for meaningful inclusion. So we, yeah, we definitely see that although employment rates have increased, they are still low, so still more progress to be made on that front. Barriers to employment do remain quite significant despite more inclusive language.
23:25
Matt Alder
Yeah, no, absolutely. I suppose one of the biggest labour market issues that sort of baked in is the UK has an aging population, as does the us, as do kind of various other places in Europe. What impact is that going to have and how should employers be preparing for that?
23:44
Jack Kennedy
Yeah, demographics are going to be a significant drag on labor supply across all developed economies over the coming decades. Essentially, we’re going to have fewer workers supporting a bigger population of retirees. Of course, that brings along a number of different challenges. Fiscal challenges from a smaller tax base, higher government spending commitments on things like healthcare and pensions, and also that challenge for employers. How are employers going to find all of the workers they need? Obviously one option for economies is immigration, but clearly there are obvious political limitations on that route. Another is boosting productivity. For example, we’ve already talked about AI and the potential to boost productivity through AI, producing more output with fewer workers. But lots of particularly things like service based industries that rely on person to person interactions will find it hard to raise productivity much through technology.
24:37
Jack Kennedy
For example, Genai is unlikely to help a barber to perform more haircuts or a carer to look after more people. So other types of mitigations will also be important. Things like promoting older worker participation in the labour market. So policies that encourage older workers to remain in the workforce longer, for example, flexible working arrangements, retraining opportunities, all of that could help address that shrinking workforce. Also things like investing in skills and education and training programs to address skills gaps and equip the workforce for the jobs of the future is also going to be crucial. We’ve seen, for example, in sectors like construction, they’ve already been facing demographic pressures for some time as older construction workers retire and not enough young people have been coming through learning trades. So how does the sector address this? Perhaps partly a perceptions issue.
25:30
Jack Kennedy
Perhaps more needs to be done in terms of outreach to attract greater inflow of young people into sectors like that.
25:38
Matt Alder
Absolutely. And as a final question, you talked about this a little bit earlier in the conversation. How are you expecting the labor market to change over the next sort of 12 to 18 months?
25:49
Jack Kennedy
I see the current year, I see 2025 really mostly as a year of weathering the various headwinds facing the market. I think there’s no disguising the fact that it’s a somewhat challenging outlook at the moment. A lot of employers are quite cautious presently, which understandable given the various domestic pressures and global uncertainties. So I do expect hiring demand to remain quite subdued in the near term. Further out, a lot’s going to depend on the state of the global economy, and we’re going to have to wait and see exactly how all of that develops. But also whether the UK government’s successful in reinvigorating growth domestically. For example, some of the policy initiatives around infrastructure, regulation, trying to boost business confidence to be a bit more bullish to invest and grow. All of that could help support stronger hiring demand.
26:42
Jack Kennedy
As I mentioned earlier on, I think so far the UK labor market has shown some resilience. The latest ONS figures indicate quite stable vacancies and payroll employment at the start of 2025 R indeed, data also indicates a degree of resilience in job postings. We haven’t really seen a a major decline in recent months, albeit pacing, still at quite a subdued level. And as I mentioned, we’ve also seen that hard data on layoffs has remained quite low despite some of that weaker survey data. So we need to see all of that continue and hopefully the labor market can ride out the choppy waters and emerge in a decent place a little bit further down the line.
27:26
Matt Alder
Jack, thank you very much for talking to me.
27:28
Jack Kennedy
Thank you very much for having me on.
27:30
Matt Alder
My thanks to Jack. You can follow this podcast on Apple Podcasts, on Spotify or wherever you get your podcasts. You can search all the past episodes@recruitingfuture.com on that site. You can also subscribe to our weekly newsletter, Recruiting Future Feast, and get the inside track on everything that’s coming up on the show. Thanks very much for listening. I’ll be back next time and I hope you’ll join me.
