Graduate labour market update: August 2025

The latest figures show that UK job vacancies are gradually returning to more normal levels, after the unusually high spikes seen in the post-COVID years

Vacancies are cooling, but not in crisis

Fresh data from the Office for National Statistics (ONS) shows that the UK economy is still growing - just slowly. Between April and June 2025, it edged forward by about a third of a per cent, with a slightly bigger boost in June.

Job vacancies tell a similar story. After a small rise in July, total estimated vacancies for May to July dipped slightly to 718,000, down 44,000 from the previous quarter.

Looking at the bigger picture, the labour market seems to be settling back into something more normal. Vacancies are a bit below the long-term average, but that doesn't mean the market's in trouble. The huge peaks we saw after COVID - between mid-2021 and the end of 2023 - were unusual, so it makes sense that things are calming down now.

Job market confidence dips

The job market is far from falling apart, but confidence and economic pressures are shaping who's hiring and who's holding back. Some places - like parts of London - have fewer openings because of tight budgets and higher payroll costs.

Most employers are taking a careful approach. Instead of making people redundant, they're often just not replacing staff who leave. But a bit of short-term uncertainty could still make some industries more hesitant to hire.

For graduates, that means opportunities aren't spread evenly across all sectors or locations. Staying flexible and open to different paths will give you the best shot.

When you take a closer look at graduate jobs, it's a mixed picture. Retail is struggling, with fewer roles compared to staff numbers. IT is still strong, but vacancies have dipped slightly - hinting that the long-running shortage of IT professionals might be easing. Still, recent bumps in openings show the market's not standing still.

Overall, fewer vacancies haven't led to mass redundancies. Employers are simply being cautious - pausing new hires or leaving positions unfilled. Graduate vacancies are about 10% below pre-pandemic levels, with nearly half of that drop coming from retail.

Employer size matters

Job opening trends also depend on the size of the employer. Bigger organisations often run structured graduate schemes and recruit on a regular schedule, while smaller firms might have fewer roles, but they can hire faster and be more flexible.

For graduates, this means you could land a job more quickly with a smaller employer, while bigger companies often offer more support, formal training, and a clearer career path. Understanding these differences can help you target your applications in a way that fits your goals and timeline.

Graduate outcomes are a mixed picture

Early data from the Graduate Outcomes 2022/23 survey shows graduates have had a slightly tougher time, with small drops in employment. Some subjects, like IT, saw bigger declines. The graduate job market isn't in crisis, but if this cohort didn't land a professional-level role quickly, options were often more limited - sometimes meaning less secure or lower-paid work.

The latest CIPD Labour Market Outlook paints a similar picture. In the private sector, things are modestly positive: 57% of employers plan to hire in the next three months. Public sector hiring is weaker, especially in the National Health Service (NHS) and social care.

Priority sectors present opportunities for graduates

Skills England expects jobs in government priority sectors to grow by 15% by 2030 - faster than average. Around two-thirds will need a degree or higher, which works out to about 600,000 graduate-level opportunities over the next four years - roughly 150,000 a year. The areas expecting the most new jobs include:

Many of these roles won't open up until current students finish their degrees, creating both competition and opportunity. IT and care work are set to expand, though graduates entering now may see some short-term ups and downs before demand peaks.

Civil engineering stands out - there are far more jobs projected than graduates currently in training. Targeting these high-demand areas and building the right skills early can put you in a strong position for the future.

What you should take away

The graduate job market is starting to settle after the post-pandemic boom. Vacancies are dipping slightly, but the market is far from collapse. Some sectors, like IT and healthcare, are adjusting, while government priority areas offer clear opportunities for new graduates.

For those entering the workforce, it's smart to focus on:

Choosing industries strategically, especially ones expected to grow.
Building skills that match future demand, particularly in priority roles.
Staying adaptable, remembering that short-term changes don't define your whole career.

Planning carefully and using data to guide your choices is the best way to navigate the graduate job scene.

Find out more

Discover what you can do with your degree.
Read our advice on getting a job.
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