Labour Market Report – March 2025
Labour Market Overview
The latest ONS Labour Market Overview shows that:
The Employments Bill
The Secretary of State for Business and Trade, Jonathan Reynolds, has published the Government’s response to the five consultations on the Employment Rights Bill. The key points:
- Right to guaranteed hours to be extended to agency workers
- Obligation to provide guaranteed hours will rest with the end hirer
- Both the end hirer and the labour provider will be responsible for providing reasonable notice of shift changes and cancellations
- The labour provider will be responsible for making late notice payments but can recoup from the hirer, where the hirer was responsible for the change
- Statutory Sick Pay rate for those earning below the lower earnings level will be set at 80% of normal weekly earnings
- Umbrella companies will be regulated
Clarification on the above is very much needed and hopefully will be provided in forthcoming weeks.
Employment Trends
The KPMG and REC, UK Report on Jobs: North of England shows that the March survey data pointed to a further decrease in permanent staff appointments across the North of England, thereby stretching the current trend of reduction to 21 months. The rate of contraction was substantial and broadly in line with that seen on average over the first quarter. Recruiters often linked the drop in hiring to reduced demand for permanent staff and a subsequent dip in vacancies. As has been the case since the start of 2025, the North of England recorded the fastest decline in permanent placements of the four English regions monitored by the survey. Recruiters based in the North of England also signalled a fifth consecutive monthly decrease in temporary staff billings in March. Having accelerated noticeably on the month, the rate of contraction was the most pronounced since mid-2020. In some cases, the decline in temp billings was attributed by panellists to a greater preference for permanent workers.
Latest survey data in regards to job vacancies pointed to a further decline in job openings across the North of England. It marked the fifth successive month of deteriorating demand for staff. Despite slowing for the second month running, the rate of decline in permanent vacancies in the North of England remained sharp and the fastest of the four English regions monitored by the survey. There was meanwhile a further solid drop in the number of openings for short-term roles across the North of England in March.
As has been the case since the start of 2024, there was an uplift in permanent candidate availability in the North of England in March. The rate of growth was not only robust, but the fastest seen since December 2020. Survey respondents linked the increase to a combination of redundancies and reduced hiring activity. A substantial rise in temporary staff supply was recorded across the North of England in March, thereby stretching the current trend of growth to just over two years. Notably, the rate of increase was the quickest seen since November 2020. There were reports of increased redundancies and hiring hesitancy as the jobs market remained subdued.
Statutory Changes
In April 2025, several significant changes to statutory rates and employment law rules will come into effect in the UK. Key updates include:
National Minimum and Living Wage Increases – From 1 April 2025, all UK employers must apply increased minimum and living wage rates. The most significant change is the extension of the National Living Wage to workers aged 21 and over, rather than 23 and over.
| NMW Rate from 1 April 2025 | Annual Increase (£) | Annual Increase (per cent) | |
| National Living Wage (21 & over) | £12.21 | £0.77 | 6.7 |
| 18-20 Year Old Rate | £10.00 | £1.40 | 16.3 |
| 16-17 Year Old Rate | £7.55 | £1.15 | 18.0 |
| Apprentice Rate | £7.55 | £1.15 | 18.0 |
Statutory Sick Pay (SSP) – From 6 April 2025, the statutory rate of sick pay will increase. Employers must ensure payroll systems reflect the new rate and minimum earnings threshold to avoid underpayments. A full week for SSP purposes begins on a Sunday and ends at midnight on the following Saturday. The weekly rate for 6 April 2025 to 5 April 2026 is £118.75 with a minimum earnings threshold to avoid underpayments of £125.00.
Family-Related Statutory Payments – From 6 April 2025, the weekly rates for statutory maternity, paternity, adoption, shared parental and parental bereavement pay will rise to £187.18 with a minimum earnings threshold to avoid underpayments of £125.00.
Employer National Insurance Contributions (NICs) – From 6 April 2025, employers will pay a higher rate of National Insurance Contributions of 15% The threshold for paying these contributions will also be reduced to £5,000
Neonatal Leave and Pay – From 6 April 2025, eligible employees will have the right to take paid leave if their baby requires neonatal care. Employers must prepare policies and payroll systems to administer this new right.
| Category | 2025 Introduction |
| Neonatal Leave Duration | Up to 12 weeks |
| Neonatal Statutory Pay | £187.18/week |
| Eligibility | Baby in neonatal care |
Immigration Policy
The Home Office published new e-visa statistics. Over 4 million UK visa holders have successfully created an account to access their e-Visa. An estimated 600,000 people are yet to switch from their physical document to an e-Visa. To support a continued smooth transition to e-Visas, the Home Office is extending the ‘grace period’ to 1 June 2025.
The government has announced it is taking the last major step in the rollout of Electronic Travel Authorisation (ETA) for the millions of visitors who pass through the UK border every year. From 5th March 2025, eligible Europeans can apply for an ETA and will need one to travel to the UK from 2nd April 2025.
A number of changes have been made to the Skilled Worker visa route:
- From April 2025, the minimum salary floor for skilled workers will increase from £23,200 per year (£11.90 per hour) to £25,000 per year (£12.82 per hour)
- Further amendments are being made to ensure salary deductions are handled consistently and to prevent workers from bearing sponsorship costs. The new provisions specify that wage deductions will be subtracted from salary calculations when calculating whether the minimum salary requirements for a skilled worker have been met.
- Where a worker is paid by reference to a ‘going rate’, the going rate will now be based upon a 37.5 hour week, rather than 40 hours.
In addition, new powers have been given to caseworkers to refuse visa applications under the Short-Term Student route where they suspect that the application is non-genuine. These changes are part of the government’s broader immigration reform strategy, with further measures expected in an upcoming Immigration White Paper.
The National Audit Office (NAO) has published a critical report Immigration: Skilled Worker Visa examining how the Home Office manages the Skilled Worker visa route. Key findings include:
- More people are using the Skilled Worker visa route than anticipated in 2020. The Home Office forecasted that they would issue 360,000 visas over the first three years but has issued 961,000
The Home Office does not have a full understanding of how the Skilled Worker visa route is operating and does not monitor what happens to people at the end of their visa.
Commentary
Maria Miller – Operations Director (Maria.Miller@gempartnership.com)
GEM are looking forward to working with our clients advising on all forthcoming changes initiated from the Employment Rights Bill and associated policy changes, impacting our industry sector. As a training provider we are also working with all relevant governing bodies to stay at the forefront of changes by Skills England. GEM hold direct funding and are able to support with a range of upskilling and staff development programmes to aid your workforce development.
I would welcome the opportunity to discuss the changing landscape with you and outline the support and programmes we offer that can enhance your People plans.
References
https://www.gov.uk/government/news/uk-to-extend-electronic-travel-to-european-visitors
https://kpmg.com/uk/en/media/press-releases/2025/03/kpmg-and-rec-uk-report-on-jobs.html
https://www.gov.uk/government/publications/the-national-minimum-wage-in-2025