United Kingdom market insights
Takeaways from people2people's 2026 Report
United Kingdom market breakdown
Key trends and insights
The UK labour market has tightened in early 2026, with job ads down 9% and unemployment rising to 5.1%. While hiring confidence remains at 52% and job seeker confidence is stronger at 58%, applications have increased 6%, pointing to a more competitive environment for candidates. Wage growth also remains above inflation, with private sector wages at 3.9%, public sector wages at 7.8%, and inflation at 3.6%, reinforcing a market where cost pressure, pay expectations, and hiring caution are all shaping employer decisions.
Replacement hiring remains the dominant force across the UK, strongest in England (37%) and Northern Ireland (36%), with Scotland (29%) and Wales (23%) also reflecting continued workforce movement rather than broad expansion. Growth hiring is more measured, led by Northern Ireland (27%), while Wales remains the most cautious. At the same time, net migration remains positive, driven mainly by work and study, with 69% of non-EU immigration linked to employment and education. Turnover is also being shaped by limited career development opportunities across much of the UK, although the pressure varies by region, with Scotland more influenced by employee benefits and Wales by a narrower mix of career development, work-life balance, and stress.
2026 United Kingdom Labour Market
5.2%
Unemployment Rate
79.3%
National Participation Rate
2.1%
National Application Increase
-9%
Annual National Job Ad Change
58%
Job Seeker Confidence Index
52%
Hiring Confidence Index
United Kingdom job seeker sentiment
How engaged are people in today's job market?
Across the United Kingdom in 2026, job seekers are navigating the market with a blend of caution and confidence. After several years of economic headwinds, many are seeking greater stability and purposeful work rather than constant movement between roles. Flexibility continues to be a core expectation, with hybrid and remote options now standard, but candidates are also placing higher value on culture, leadership, and opportunities for progression.
There’s a growing sense that workers want to build careers, not just hold jobs — favouring employers who offer transparency, inclusivity, and long-term growth. The result is a more discerning and balanced employment market, where UK job seekers are weighing their options carefully and prioritising workplaces that align with their personal and professional values.
36%
of jobseekers are passively looking or hesitant to move
62%
of job seekers are engaged in at least 3 interview processes
14%
of job seekers say their salary is below market levels
27%
of job seekers say salary doesn't reflect performance or workload
Employment trends shaping United Kingdom labour market in 2025
What key factors are driving talent retention in 2025?
Talent retention remains a key priority in today’s competitive job market. As workforce dynamics evolve, understanding what matters most to employees is essential. Focusing on factors such as career growth, management support, and work-life balance helps employers strengthen engagement and build lasting loyalty.
Why are you losing your staff in 2025?
Employee retention and resignation remain key challenges in today’s evolving workforce. Understanding why people leave and how to keep them engaged is essential for long-term success. As priorities shift toward career growth, culture, and leadership, businesses must adapt their strategies to retain talent. What’s driving resignations in 2025, and how can organisations better support and sustain their people?
What's the impact of forcing a return to the office?
As return-to-office mandates rise, businesses are increasingly concerned about their impact on morale, productivity, and retention. With flexibility now an expectation, finding the right balance between in-person collaboration and remote autonomy is vital. The challenge lies in making office returns work for both people and performance.
2026 Employment & Salary Report
Stay ahead of your market across Australia
Take a closer look at what’s driving hiring in your industry, from shifting employer priorities to the roles most in demand. This comprehensive report reveals the key trends shaping recruitment and workforce strategy this year, providing your business with a competitive edge in today’s uncertain labour market.
- Benchmark your company's attraction and retention strategies
- Find out what job seekers are looking for in 2026
- Identify emerging and current hiring and salary trends
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