What does 2025 hold for the technology recruitment market?

Recruiters and jobseekers should stay agile and expect the unexpected

As we enter a new year, I don’t think many in the technology recruitment industry will be especially sad to leave 2024 behind.

2024 has been quite a challenging year in which continued uncertainties dampened volumes and demand. Economic conditions have improved a little, with inflation falling from its past highs, but interest rates have only edged down, and rates of growth remain subdued. Combined with continuing geopolitical instability and the upheaval of elections in the UK, US and elsewhere, the market has lacked the certainty needed to spur widespread, sustained recruitment activity. Companies have been cautious, and candidates have tended to favour staying put – leading some to describe the year as ‘the great stay’.

2025 – key pockets of activity and growth

Heading into 2025, I believe the market will reach a more stabilised level of demand. The OECD has recently upgraded its economic growth forecast for the UK to 1.7%, putting the UK behind only the US and Canada in the G7. While modest by historic standards, 2025’s growth rate is expected to be twice as fast as 2024, so this could stimulate economic activity and hiring.

We also see signs that more technology professionals are looking to move during 2025. A recent survey of intentions that we have carried out on LinkedIn shows that 68% of technologists are actively looking for a new role, with a further 9% planning to start looking in the New Year. This represents an increase in activity from the summer when the Harvey Nash 2024 Global Tech Talent & Salary Report found that 50% of UK tech professionals were looking to move to a new organisation in the coming 12 months.

There are five areas where I expect to see increased recruitment demand:

• Big Tech: The Big Tech firms have largely recovered following a period of retrenchment and are beginning to hire again. They are also continuing to invest in the UK – during 2024 Google pledged to invest $1 billion in a new data centre in Hertfordshire. Microsoft also committed to investing an extra £2.5 billion in the UK.

• Financial services: The industry’s resourcing requirements have strengthened in recent months, and I expect to see continued activity, with particular demand on the contingent staff side. AI and machine learning are priority areas.

• Public sector: With the government committing to increased investment in the public sector, I anticipate that the kickstarting of projects will be accompanied by a renewed wave of hiring (particularly contingent staff) following a fallow period in the run-up to the election. The government also recently announced that it would be recruiting staff from tech start-ups in a secondment scheme to embed a ‘test and learn’ culture across government departments, backed by a £100m innovation fund.
• Tech start-ups/scale-ups: AI and other emerging technologies are of strategic importance, and I expect the technology start-up and scale-up market to be a strong performer with a continuing need for talent.
• Green tech: We are seeing continuing demand for technologists with expertise in green and clean technology solutions and materials as organisations pursue a sustainability agenda and work towards net zero goals.

Headwinds to negotiate

These factors will inject some life into the market – but there will also be some headwinds.

Firstly, even if the UK may be better placed than some other major countries, the economic outlook continues to be underwhelming. There is also the significant wildcard of Donald Trump assuming the presidency in the US and the possibility of tariffs and increased trade wars. However this plays out, the world continues to be an unsettled and volatile place. Employers are set to continue to take a cautious approach.

Secondly, the government’s planned increases to employer National Insurance contributions could have a significant impact. It is likely to have the biggest effect on sectors with high numbers of lower paid staff like retail, hospitality and leisure – but technology won’t be immune. In a global market where tech talent is available anywhere, the increased costs of employing UK talent may lead employers to invest in building or growing their technology teams in other locations instead.

Added to this we have the government’s forthcoming package of workers’ rights which, while great news for individuals, will add to the cost and responsibilities of being an employer.

Other key factors

AI is a major focus for investment and exploration by businesses – but the real nature of its impact on technology recruitment remains unclear. The technology is developing at a rapid pace – so could 2025 be the year that it begins to spawn new roles at scale?

Whatever the market conditions, there will continue to be significant competition for the best talent with skills shortages in priority areas such as data, AI, software development and cyber. Culture and working environment will remain critical to attracting talent. Diversity will be another key area, with a continuing focus amongst employers on strengthening the diversity of their teams.

Expect the unexpected?

My expectation is that 2025 will be a solid year for technology recruitment, even if it’s unlikely to break any records. However, the nature of the market is that it can move from red to green at a moment’s notice. With AI developing at pace and many other unknowns, employers (and candidates) need to stay agile and prepared for the market to take an unexpected turn at any time.