Measuring the economic health of the UK labour market by focusing on worker sentiment towards jobs against a backdrop of key macroeconomic and cultural factors can help identify business-critical workforce trends at large.
This is where the Robert Half Jobs Confidence Index (JCI) comes in. Produced in partnership with the Centre for Economics and Business Research (Cebr), the purpose of the Robert Half JCI is to analyse worker confidence through a macroeconomic lens in the context of job creation, security and career progression.
By doing so, we aim to reveal actionable insights for employers and business leaders into the state and stability of the labour market. In this foreword I will look at the key learnings from this quarter’s Robert Half JCI, and how employers can respond.
In this article, Matt Weston, Senior Managing Director at Robert Half, shares an overview of the latest Jobs Confidence Index report, exploring the key trends related to our most recent findings.
What lies behind employees’ confidence levels?
At first sight, the most recent JCI data shows a slightly disappointing downward trend in confidence by employees across all four pillars. It follows growth in the UK economy of just 0.8% in 2024, and negative media sentiment towards the Autumn Budget announced last November.
The largest fall in confidence was in the job security pillar, down from 152.2 to 109.4. One possible cause for this could be the anticipated impact of the rise in employers' NI contributions from 13.8% to 15% in April 2025: 30% of respondents in our study believed that the rises would lead to them being asked to do more with less, and 23% thought the rises could put their jobs at risk.
However, it is not yet clear what the primary impact of the increase in employers’ NI contributions will be with regards to wages, prices or headcount. It’s also worth stating that while confidence levels have fallen, they are still higher than during the post-financial crash and lockdown eras. All pillars are in positive territory, including the macroeconomic pillar, which fell into negative territory following the Truss mini-budget. And at 32.3, the JCI in Q4 is still considered to have a high score compared to historic levels
Reasons to be cheerful
Further positive news is that the pay confidence pillar fell only slightly, by 0.5 points. As per recent ONS data, regular annual pay growth stands at 6.2% for the private sector, and 4.7% for the public sector in the last quarter of 2024.
While wage growth may not rise as quickly in 2025, it’s likely to outpace inflation, putting more money into employees’ pockets and into the economy. The UK economy itself is predicted to grow by around 1.1% in 2025, driven by household consumption and government spending.
Beyond the rise in National Insurance contributions, one factor that may affect employers’ decisions on pay rises is that more people are available for companies to recruit. Labour market tightness, measured by the number of unemployed people per job vacancy, has improved from a low of 1.0 in Q3 2022 to 1.9. Economic inactivity (excluding students) also fell by 0.2% points to 15.8%, the lowest level since Q2 2023.
How to build a successful retention strategy
While there will be a wider labour pool to draw from, the new challenge for employers will be to upskill workers with the skills they need today and in the future - helping to build loyalty, engagement and retention.
If employees do not feel fulfilled by their current roles, they are likely to look elsewhere. More than a third of UK workers said they were likely to look for a new role in 2025, with 13% already actively searching for a new job.
More employees are considering a career change, not just a different job in the same area of work: 27% said they would change jobs to move into a different field, just behind switching to get better benefits (28%). Seeking a higher salary remains the number one reason to change jobs, and was cited by 43% of job seekers.
Evolving working arrangements after the pandemic appear to have taken another shift this quarter and are less of an issue for employees considering their future. The number of people looking for a new role to find more flexible arrangements fell to 23% from 29% last year. Just 51% of workers believe attracting new staff will be difficult without remote options, compared to 68% in 2024 - a significant drop.
One factor that does continue to make a difference when potential employees are choosing new roles is each company’s core values. If both companies offer the same pay, 61% of workers would consider company values as a deciding factor. The proportion of workers who would consider a company’s ESG initiatives when choosing roles grew from last year from 43% to 47% - and a rise was recorded across all age bands, not just for younger people.
Embrace the positives
While the picture could seem negative in terms of falls in the JCI indicators this quarter, there are some clear positives for both employees and employers.
The positive for employees is that wage growth will continue to outpace inflation in 2025, while employers can expect to see more people coming back to work in the office, providing the opportunity to take a balanced approach to flexible working. Employers will also have access to a wider pool of potential hires.
evertheless, the skills shortage continues to accelerate, especially for hard-tofill roles in areas such as finance and technology. While securing a higher salary is still the main reason for employees to switch jobs, it’s clear that other factors are important too. Respondents in our survey who were confident about their job security said it was because they were doing well in their role, were clear about their responsibilities and did not expect them to change, or had a good relationship with their manager.
When asked which factors would encourage them to change jobs, 25% cited career development and training, a 4% rise on last year. In a separate question, employees ranked the importance of factors in looking for a new job as company values and access to training and professional development.
Dealing with new market conditions
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The big question to address now is how employers will deal with these new market conditions. The threats of potential political and economic events are out of their hands.
From a human capital point of view, the emphasis should be on helping employees find meaning in their work lives, and making the most of the opportunities that a more fluid employment market will bring. By helping employees to contribute to the businesses they work for in a meaningful, positive way, employers can help solve the productivity challenge and address retention issues alike.
Change is inevitable and often uncertain. However, those with a stoic mindset will recognise the valuable insights from this quarter’s JCI, identifying key opportunities for leadership – whether by maximising every employee’s potential or by clearly communicating corporate values.
