UK employers in 2026 are struggling to recruit due to a combination of severe, long-term skills shortages, rising employment costs (including Employer National Insurance increase, minimum wage hikes, pension auto enrolment), the introduction of the new Employment Rights Act, advances in technology (AI) and continuing economic uncertainty. All of these factors are forcing a shift to cautious, strategic hiring.
Recruitment statistics
Last month CIPD’s Labour Market Outlook showed that more than a third (37%) of UK employers plan to reduce the recruitment of permanent staff due to at least one or more of the Employment Rights Act’s key reforms.
Furthermore a recent monthly employment index from BDO, an accountancy and consultancy firm, showed that unemployment in the UK rose to a five-year-high of 5.2% in the final quarter of 2025 and a near-11-year high for young people. The Office for Budget Responsibility said the rise had been caused by businesses cutting back on hiring rather than laying off staff, which had a bigger impact on young people who were entering the workforce.
Changing recruitment market
Currently UK employers are hiring more selectively, scrutinising recruitment spend, prioritising retention, managing risk and focusing on productivity. So in a changing recruitment market, where does that leave HR and recruitment companies like Total Spectrum?
Fortunately because we specialise in both HR and recruitment, we can not only help businesses to forecast staff needs, reduce churn by focusing on retention and engagement, provide market insight and improve workforce quality, but we can also help our clients to stay compliant when it comes to changes in employment law. That’s why we recommend that organisations undertake the following:
- Streamline recruitment processes – to accelerate hiring, reduce costs-per-hire, and enhance the candidate experience. By reducing bottlenecks, you can secure top talent faster, improve quality of hires, and gain a competitive edge in attracting the right candidates
- Encourage inclusive hiring – widen your hiring pool to recognise that your next employee may come from a different background
- Strengthen onboarding/induction processes – set clear expectations, add in regular scheduled check ins, mentor and monitor to improve retention
- Create clear pathways for progression – ensure you have visible and accessible learning, training and development opportunities available to help transform short-term jobs into long-term careers
- Recognise and reward people consistently – instil a strong recognition culture to strengthen a sense of belonging. Saying thank you or giving praise are often more powerful than other incentives
- Pay and conditions – offer competitive salaries and workplace flexibility to improve work-life balance, reduce burnout, and increase retention
- Invest in training and upskilling – to close skills gaps, reduce recruitment costs, and increase productivity
- Develop supportive, people focused managers – to nurture trust and prioritise employee well-being, growth and satisfaction which in turn will create a work environment that drives both performance and loyalty
- Foster a culture of inclusion and belonging – to ensure all individuals feel safe, respected, valued, and empowered to contribute their unique skills
- Partner with an HR and recruitment specialist – to get access to in-depth market knowledge, specialised talent pools, speed up the hiring process, enhance the quality of hires through expert screening, improve your compliance, reduce your operational costs and drive company growth.
Outsourcing your HR and recruitment to a professional enhances your strategic workforce management, aligns employee performance with business objectives, improves decision-making and organisational productivity, profitability and effectiveness. To find out more about how Total Spectrum can position your business to remain competitive and agile in an ever-changing environment, get in touch today. Contact Debby on 07780 692784 or debby@total-spectrum.com.
