The latest information from the Office for National Statistics (ONS) estimates that the number of vacancies in the UK fell by 56,000 in April to June 2025. This is the 36th consecutive period where vacancies have dropped compared with the previous three months, with vacancies decreasing in 14 of the 18 industry sectors.
Feedback from the ONS Vacancy Survey suggests some businesses may not be recruiting new workers or replacing workers who have left.
So, what might these developments mean for your business?
- Your recruitment process may feel the strain
- Employee retention may see a bit of a boost – but watch out for employee disengagement
- Be careful if you are using existing staff to fill gaps left by ‘natural wastage’
If your business is one which is recruiting, you may find that you have an increase in the number of applicants as vacancies in many sectors become scarcer. This can be a double-edged sword for businesses – whilst a larger talent pool to select from is often welcomed, recruitment processes can feel the strain. It’s important to make sure that yours is robust, fair and meets the needs of your business – not only to increase your chances of a successful hire but also to protect your business should a hiring decision (or the process) be challenged.
1. Your recruitment process may feel the strain
Here are some things to have on your radar:
- If it’s been a while since you last needed to recruit, check whether any improvements to your process are needed, for example, are you satisfied your process is the best way to assess applicants’ skills? Is your process effective or has it become over long and unwieldy over time? How does your process compare to others in your industry?
- Be realistic when it comes to timescales and communicating with applicants; this can help the process go more smoothly and prevent issues from arising. One area that sometimes crops up is communicating with unsuccessful applicants, whilst it is good practice to communicate that someone has been unsuccessful, this may not be possible if a high volume of applications are received, particularly for unsuccessful candidates in the early stages of a recruitment process. In this scenario, it’s important to be consistent in your approach, and you may wish to manage applicants’ expectations by making them aware of this in the recruitment material.
- Recruitment can be time-consuming, which can lead businesses to cut corners, particularly if there is an urgent need to fill a vacancy. Bear in mind that it’s important not only to get the right person for the job but to do it in a safe way that doesn’t inadvertently expose your business to risk. Remember, applicants are protected from being discriminated against and/or harassed, and you are under a duty to make reasonable adjustments for a disabled applicant where needed. It’s important that all applicants are treated appropriately, and you have the evidence to back this up if you are challenged. Furthermore, ensure you are mindful of notes made during the recruitment process; these should be appropriate and respectful, as they can be the subject of a data access request.
2. Employee retention may see a bit of a boost – but watch out for employee disengagement
With fewer opportunities available, you may find that more employees are staying put, or are doing so for longer. Reduced employee churn is often good news – a stable and reliable workforce that’s familiar with their roles and who are (in the main) meeting the required standards, but it’s not time for a business to rest on its laurels:
- If an employee who wishes to leave for pastures new is unable to get another position, they can feel stuck where they are and become disenchanted. This can have a knock-on effect with them becoming disengaged from their role and your business, often presenting as a drop in performance. If you have concerns about an employee’s performance, it’s important to promptly and appropriately address the matter. The first step will usually be to meet informally with the employee to raise your concerns and ascertain if there is a good explanation for the performance issue.
- It can be the case that it’s those employees you least want to lose that are the ones who find a new job elsewhere, e.g. because they are the most highly skilled, experienced or are a top performer. If this is a concern in your business, it will be important to think about what steps you can take to aid retention, e.g. internal career progression opportunities, considering salary and benefit offerings if the business is in a position to do so.
- Sometimes businesses find themselves with an employee who they hope will move on, maybe they are a bit difficult to manage, or they’re not a great fit for the team, but there isn’t enough to base formal action on. Sometimes it’s the opposite, with a business finding that there is a problem, but for whatever reason, they’d rather not directly deal with it. If either of these scenarios sounds familiar, you may want to review your approach – with fewer job vacancies, your business may find your employees sticking around. If you’d like to discuss your situation and options available, such as a settlement agreement, please get in touch.
3. Be careful if you are using existing staff to fill gaps left by ‘natural wastage’
With increased costs and an uncertain outlook for some businesses, not recruiting new employees or not replacing those that do leave may understandably be an attractive option. If this is an approach your business is considering it will be important to plan carefully. Some matters to bear in mind include:
- The Working Time Regulations – there are limits on average weekly working time and rules on rest and rest breaks for most adult and young workers, so it’s important not to inadvertently fall foul of the law, particularly if employees are going to be working overtime
- Change of job content/terms and conditions – if your plans involve changing employees’ duties or terms and conditions, such as working hours, it will be important to go about this in the right way and to seek advice on your situation before acting
- Employee workloads – from an HR perspective, it’s vital that employee workloads remain appropriate and manageable. If not, this could lead to issues for the business, such as increased sickness absence rates, employee grievances and an increase in mistakes being made as employees lack the capacity to do the job to the usual standard. Concerned about any of these issues in your business? We are here to help so please get in touch.
If you would like help with an HR matter, please don’t hesitate to get in contact with us.