Job vacancies in Britain have fallen to their lowest level in five years as businesses freeze graduate recruitment amid rising national insurance costs and the growing use of artificial intelligence, new data shows.
Figures from Adzuna, the job-matching platform, showed that the number of advertised roles dropped to 694,940 in January, down 16 per cent year on year and 3 per cent month on month. It marks the first time since January 2021 that vacancies have slipped below 700,000 and leaves hiring volumes only marginally above pandemic-era lows.
The downturn was especially acute for young people. Fewer than 10,000 graduate jobs were advertised last month, the first time the figure has fallen below that threshold since Adzuna began tracking it in 2016.
Youth unemployment has climbed to 16.1 per cent — the highest level in more than a decade — while entry-level roles are down 4.4 per cent annually and graduate vacancies have fallen by 45 per cent over the past year.
There are now 2.4 jobseekers competing for every vacancy, up from 2.27 in December, signalling the fiercest competition for roles in years.
The figures mirror official data released last week by the Office for National Statistics, which showed the unemployment rate ticking up to 5.2 per cent in the three months to December, the highest level since early 2021. Youth joblessness has surged as employers pulled back from entry-level hiring after the government’s increase in national insurance contributions.
Adzuna said the deterioration suggested companies were reassessing workforce plans in response not only to higher payroll taxes and minimum wage rises but to the expanding capabilities of AI tools that could automate junior administrative and professional tasks.
An electrician apprentice at BAE Systems Academy for Skills and Knowledge at Barrow-in-Furness
ALAMY
Andrew Hunter, co-founder of Adzuna, said: “Hiring is approaching pandemic-era levels and with graduate roles falling to a record low this suggests the market is far from being on a stable footing.”
There are other tentative signs of stabilisation. Separate data from the Recruitment & Employment Confederation (REC) found that the total number of active job postings stood at 1,435,910 in January, up 3 per cent on December. While still 5.6 per cent lower than a year earlier, the REC said the modest monthly increase suggested that the slide in vacancies might start to ease.
Shazia Ejaz, director of campaigns at the REC, said: “The employer dithering on hiring that held back the labour market late last year may be starting to give way. January’s modest pickup suggests vacancies have stopped falling, though they are not yet flowing as strongly as we would like. Many employers are still waiting for clearer signs of economic stability before taking the plunge on increasing their workforce.”
Ejaz warned, however, that policy risks remained. “Government decisions have made it increasingly costly to give people a job at a time when unemployment figures are rising. If politicians want to avoid a labour market that accepts higher unemployment, they must stop advancing policies that push it up.”
Another bright spot for workers was pay. Adzuna said average advertised salaries rose to £43,289 in January, up 0.7 per cent month on month and almost 6 per cent year on year.