Why rising UK unemployment signals a strategic shift toward temporary staffing
Written by Richard Bourne, managing director of Bespoke Career Solutions
The latest figures from the Office for National Statistics (ONS) show UK unemployment rising to 5.0 per cent in the three months to September 2025, the highest level since early 2021.
While not catastrophic, it does point to a slowdown in hiring and economic activity, as businesses become more cautious in response to rising costs and ongoing uncertainty.
According to the Recruitment & Employment Confederation (REC), demand for permanent staff continues to fall, while the market for temporary placements remains far more resilient.
The REC/KPMG UK Report on Jobs (October 2025) noted one of the steepest declines in permanent hiring since mid-2023, whereas temporary billings have held steady — a clear sign that employers are prioritising flexibility over long-term commitments in the current climate.
Slower growth and cautious confidence
When employers pause or delay recruitment, it affects the wider economy.
Fewer people in work means less consumer spending, lower productivity, and ultimately slower growth.
That in turn influences inflation and interest rates, with the Bank of England holding rates higher for longer to manage ongoing cost pressures.
Looking ahead, April 2025 brings further financial challenges for employers — including a planned National Insurance increase and another National Minimum Wage rise.
Combined with proposals such as “day-one employment rights”, these changes are likely to increase costs and hesitation around hiring, particularly for small and medium-sized businesses.
Why temporary staffing will grow
Periods of uncertainty typically see employers turn to temporary and contract staff to stay agile. Temporary recruitment offers flexibility — enabling businesses to respond quickly to changes in demand without long-term risk.
According to the ONS, the number of people in temporary employment has risen by nearly 10 per cent year-on-year, reaching around 1.6 million workers. This trend is expected to continue into 2026 as employers seek adaptable solutions while economic stability returns.
For candidates, this means more opportunities for immediate work, often with the chance to move into permanent positions once confidence returns.
A time to talk up UK business
Despite the challenges, there are positives worth focusing on. UK manufacturing output, while under pressure, has shown signs of resilience, supported by growth in aerospace, renewables, and advanced engineering. The sector remains a cornerstone of Britain’s economy, contributing £224 billion annually and employing 2.6 million people (Make UK, 2025).
At Bespoke Career Solutions Ltd, we believe it’s time to start talking up the UK economy — and in particular, the manufacturing and engineering sectors.
Britain has a long history as a global powerhouse of innovation and industry, and with the right investment, skills development, and confidence, we can reclaim that position on the world stage.
Investing in manufacturing, technology, and engineering is not just about jobs — it’s about national capability, productivity, and pride. When we support UK businesses, we strengthen communities, create skilled employment, and drive sustainable growth.
Our role in the recovery
At Bespoke Career Solutions Ltd, we’re proud to work at the heart of this effort — connecting skilled people with the businesses that need them most.
By combining cutting-edge recruitment technology with real industry experience, we make it faster and easier for employers to find the right staff while ensuring every candidate has access to quality opportunities.
When the economy starts to pick up — and it will — demand for skilled labour in manufacturing, engineering, logistics, and commercial sectors will return quickly.
Those businesses that continue to invest in people now will be best placed to take advantage of that recovery.
It’s time to back UK business, talk up our strengths, and focus on what we do best — building, creating, and delivering excellence.
Click here for more information or call 0121 818 5188.