Recruitment landscape H1 2025: Winners and losers

The UK recruitment sector is currently navigating one of its most challenging periods in recent memory. Economic uncertainties, geopolitical tensions, and technological disruptions have created a complex landscape for recruitment firms. Here's an overview of the current state of the industry, highlighting key players, emerging trends, and notable closures.

Industry challenges and notable closures

• Hays: The UK's largest recruitment firm, Hays, issued a profit warning in June 2025, forecasting adjusted operating profit for the year ending in June at around £45 million, significantly below analyst expectations. This decline is attributed to widespread weakness in the permanent hiring market, particularly in northern Europe, due to reduced business confidence amid global uncertainties. thetimes.co.uk
  
  
• SThree: Specialising in technology, engineering, and life sciences recruitment, SThree has cut 10% of its workforce, reducing employee numbers from 2,700 in November to about 2,430. This move comes amid a prolonged downturn in the hiring market, with the UK market seeing net fees plummet by 28%. thetimes.co.uk+1reuters.com+1
  
  
• PageGroup: The London-listed recruitment firm warned investors that its profits are likely to fall to the lower end of expectations due to deteriorating trading conditions in Europe, particularly in France and Germany. The company's gross profit dropped by 17.2% year-on-year in the final quarter, with significant declines in sales across Europe, the Americas, Asia, and the UK. thetimes.co.uk
  
  
• Insolvencies: The number of UK recruitment agency insolvencies increased by 14% in the last year, from 363 in 2022/23 to 413 in 2023/24. This is the third consecutive year of increases, indicating ongoing financial pressures in the sector. hrdconnect.com+2recruiter.co.uk+2cityam.com+2
  
  

Emerging trends and resilience

• Temporary placements: Despite challenges, the temporary placements sector accounts for three-quarters of the recruitment market, presenting an attractive option for employers in an uncertain economic climate.
  
  
• AI integration: Employers are increasingly relying on AI to reduce costs, contributing to a decline in graduate job openings. Research indicates that AI may significantly affect "white-collar" professions, with up to 60% of jobs in advanced economies exposed to AI-related changes.
  
  
• Mergers and acquisitions: In March 2024, Dutch technology recruitment specialist HeadFirst Group announced the acquisition of Impellam Group, aiming to become one of the world’s leading STEM talent and managed-service providers. grantthornton.co.uk
  
  

Ones to watch

• Beamery: A London-based HR tech firm, Beamery reached a valuation of $1 billion in 2022. Despite facing challenges and undergoing restructuring, the company continues to innovate in talent lifecycle management. en.wikipedia.org
  
  
• Robert Walters: While facing industry-wide challenges, Robert Walters has been noted for its strategic adjustments and focus on niche markets, positioning itself for potential recovery as market conditions improve. robertwalters.co.uk

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The turbulence in the UK recruitment sector offers in-house teams an important moment of reflection. As traditional players restructure and market models shift, internal hiring teams have a unique opportunity to lead with agility, insight, and innovation.

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