Birmingham Employment Market Trends Highlight Opportunities and Pressures for Local Firms

Greater Birmingham recorded an unemployment rate of 5.7% for working-aged people aged 16-64 as of the year to June 2025, significantly higher than the UK national average of 4.1%.

The figure arrives alongside record employment levels, forcing companies to weigh a larger pool of working residents against persistent gaps that exceed national benchmarks.

Employment Rate Hits Modern High

The employment rate for the working-age population aged 16-64 reached 72.2%, the highest in modern history after 25 years of steady growth, according to data covering the period through June 2025.

Economic inactivity for those aged 16-64 stood at 23.1% between July 2024 and June 2025, 1.9 percentage points above the national rate.

Birmingham itself counted approximately 501,000 employed people aged 16 and over in the year ending December 2023, down from 511,000 the prior year, with an unemployment rate of 7.2% in that earlier period.

Implications for Recruitment and Retention

Businesses now operate in a market where overall participation has climbed steadily yet unemployment and inactivity rates remain above UK averages, pointing to the need for more focused outreach to inactive residents and skills development programmes.

Firms may need to review wage offers and training support, given that average regular earnings in Birmingham rose by 4.8% between May and July 2025, driven by public-sector and service-sector gains.

The city-region has added jobs over the decade, with employee jobs located in Greater Birmingham reaching around 880,000 after growth of 80,000 since 2015, which expands the local talent base while leaving room for further inclusion of working-age residents.

Youth unemployment staying below 10% for four consecutive years offers one entry point for entry-level hiring, while the share of working-age people with no formal qualifications fell to 6% in 2024 from 6.5% in 2023.

Companies should track official labour market releases from the Office for National Statistics and local economic reports to adjust workforce planning, particularly around retention in sectors showing earnings growth and outreach to groups outside the labour force.

This article is general information only and is not personal financial or investment advice. Consider your own circumstances and seek licensed professional advice before making financial decisions.