Executive Outlook: The UK and EU

Executive Outlook: The UK and EU

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In our 2025 Quarter 1 Executive Outlook, one feature stood out for us: Hiring is down almost across the board but executive level positions are being hit hardest. Even the most talented, experienced and highly-qualified candidates or those who are more used to being headhunted with their biggest issues deciding which offer to accept, are struggling to get to interview.

But are analysts predicting it will get better or worse in 2025?

Here, we take a deeper dive into the executive and wider recruitment landscape and look at conditions, trends and forecasts. In part one, we focus on the UK and Europe and in second part, Asia and the US.

As we enter 2025, the UK and European executive job markets are facing one of the most challenging landscapes in recent memory.

The whole world is paying the price for the economic hiatus of the pandemic, the financial cost, cultural change and mental health legacy, while geopolitical tensions are on a knife-edge. Globally, markets are more volatile than was the case a few years ago, leaving many executives in a prolonged state of transition.

The pandemic-inspired trend for distributed team working has expanded the higher end recruitment market to a global pool of executive and emerging leadership talent, creating greater competition, but also opening new opportunities for candidates.

Meanwhile, organisations everywhere are getting to grips with the increasingly complex challenges and opportunities presented by digital and AI technologies, especially Generative AI. The World Economic Forum’s Future of Jobs Survey 2025 found 86% of employers expect their business to be transformed by AI by 2030. This means that in-demand leadership skillsets are in constant flux with executives are now facing a more urgent requirement to upskill to stay relevant.

Some legacy roles are disappearing to be replaced by positions that did not even exist a decade ago. In fact, a 70% change in required job skills is anticipated by 2030. This shift in emphasis towards newly in-demand skills, character and enterprise leaders – who account for fewer than a sixth of executives – has left many established senior leaders struggling to understand their place in this new world order.

Executive search organisations, meanwhile, say there is a shortage of leaders with the required skillsets, outlook, confidence and capacity to drive innovation and oversee transformation, especially in growth areas of technology, healthcare and fintech. The dial has moved; executives need to develop an understanding of what is now required of them, adjust their offering, upskill and repivot. The consequences of not doing so could lead to obsolescence.

To top it all off, a trend is emerging among some organisations to attempt to obscure any difficulties they may be having by posting “ghost jobs”- positions which have never existed. They may give the appearance that the business is thriving – but waste the valuable time and resources of the candidates who apply. Meanwhile, AI-powered recruitment tools mean employers and headhunters can scan worldwide talent pools to look for the right candidates, requiring everyone to better understand the new rules of the executive marketplace and up their game and digital presence. Executive profiles are essentially data points which need to be found.

Those that make the first cut may then be asked to perform through multiple stages of interviews, dragging the process out for months and extending time out of work.

This summary explores the trends shaping the UK and European executive hiring landscape, from the sectors experiencing the sharpest declines to those showing signs of resilience and growth. For executives navigating this turbulent period, understanding these dynamics will be critical to securing their next opportunity in an increasingly selective and competitive market.

Trends, forecasts and opportunities by region: the UK

Headlines in the UK have made grim reading for business leaders since the October 2024 budget, with some right-leaning media warning of a possible meltdown as companies face a quadruple threat from high running costs, an increasing employer tax burden, a crisis in consumer confidence and likely further destabilising action by the Chancellor to try to fill that infamous £22 billion government spending black hole.

The EY ITEM Club is the latest influencer to downgrade predicted UK GDP from 1.5% to 1% in 2025. If the Chancellor is forced to make more cuts, some economists warn the UK could head into a “doom loop” between debt and growth. Much will come down to what happens next in the global economy.

Even if the UK escapes direct US trade tariffs, the potential international impact of increased prices and trade wars could ripple across the Atlantic and the English Channel. More uncertainty in an already edgy recruitment market will only make conditions more difficult to navigate. That market is already tough with the latest figures showing a 22% rise in job applications in Q3, 2024, with 24 candidates per role, up from 19 in Q2, while the number of jobs posted saw a 10.6% drop compared to the 2023 average. Two fifths of recruiters report more candidates but 56% say there has been a slowdown in hiring.

Overall, predictions point to a very challenging and competitive market for the top jobs in a fast-changing environment.  All eyes will be on the next round of economic forecasts from the Office for Budget Responsibility in March and whether the PM Sir Keir Starmer’s can successfully forge stronger trade links with the EU while keeping Trump tariffs at bay. Key business organisations are forecasting the following:

CBI anticipates more interest rate cuts to offset sluggish growth and weak hiring with inflation coming down: “Business surveys have softened, with the CBI’s own growth indicator pointing to a significant fall in output over the quarter ahead. Hiring intentions also deteriorated – now at their weakest since the COVID pandemic – and price expectations have ticked higher.”

IoD:  “The significant increases in employer NI, the forthcoming increase in the minimum wage and concerns over the cost of employment rights continue to sap demand for workers.” A quarter of directors told an IoD survey they expect their headcounts to be lower through 2025 but the same amount said they would go up, while almost half expected wages to increase.

British Chambers of Commerce: “Our latest survey paints a worrying picture of weak workforce growth, persistent hiring difficulties and cuts in workplace training. It also revealed that 55% of firms are planning to put up prices, with labour costs the main driver.”

The IMF: Predicts higher growth of 1.6%.

Despite these challenges, opportunities do exist and lie in addressing the UK’s significant skills gap. While familiar roles and functions may be in short supply, almost two thirds of recruiters report skills gaps in the UK.  At senior level, they are struggling to fill roles that involve AI-led transformation, a gap that Rialto focus on preparing clients for. Such future-facing, in-demand roles can offer faster resettlement, higher remuneration and greater  security for executives open to adapt.

Infrastructure and utilities, property development and capital delivery are also among the sectors with the greatest demand and lowest supply but equally require a stand out proposition.

The EU:

The Eurozone experienced zero growth in Q4, 2024. Goldman Sachs warned it could yet take a “sizeable hit” amid uncertainty over Trump’s threatened trade tariffs, especially around growth and confidence.

Germany, the largest economy, has seen two years of contraction reducing its 2025 growth forecast from 1.1% to 0.3%, largely due to high energy costs and labour shortages.  Its manufacturing and export-heavy economy has been hit by high energy prices and labour shortages and would be extremely vulnerable to US trade levies.

The IMF has forecast 1% growth across the zone in 2025, with 2.3% in Spain, 3.5% in Poland, 0.8% in France and 1.6% in the Netherlands. Those figures will be revised downwards if tariffs are imposed.

The European Central Bank expects inflation to hover around 2.5% with cost pressures easing and rising household incomes being the main driver of growth. Unemployment is predicted to sit at around 6.5% while exports are expected to remain subdued, picking up in 2026, again, depending on tariffs. Employment is expected to maintain modest growth.

The Eurozone’s financial industry is looking precarious for executive recruitment. Several major banks announced a wave of redundancies including shaving board membership, with Deutsche Bank AG Chief Executive Officer Christian Sewing warning 2025 will be “the year of reckoning”.  Stagnation is likely to be exacerbated by Trump lifting regulations in the US to promote unfettered growth

For executives, looking to Europe for their next opportunity, the best opportunities lie in ESG and digital transformation. Predictions are that professionals demonstrating expertise in green transitions, AI ethics, and digital transformation will remain in demand.   As well as seeking to drive efficiencies and growth in these areas, organisations need to adjust their operations in accordance with new environmental and AI regulations around security and ethics.

According to Business Research Insights: “European organisations are increasingly prioritising sustainability and moral leadership” to drive successful transformation. A WTW survey found 94% of European firms surveyed included one or more ESG metrics in their executive pay programmes.

In summary, the executive job market in the UK and Europe is undergoing a profound transformation, with traditional career pathways continuing to be less predictable and competition for senior roles intensifying. Economic pressures, regulatory shifts, and evolving corporate priorities mean that organisations are being increasingly selective in their hiring, prioritising leaders with the skills and strategic vision to drive efficiency, innovation, and transformation. The days of relying on experience alone to secure senior roles are over; executives must take a proactive approach to redefine their value proposition in this evolving landscape. Those who fail to align with these changing demands risk being left behind.