The January UK Market Briefing points to stabilisation at a lower level of hiring activity. Unemployment reached 5.1% and employment eased to around 75%, while the official vacancy estimate for October–December 2025 stood at 734,000. Employers gained more choice, but demand for critical skills remained resilient.
Selective hiring and easing pay pressure
Professional services, healthcare, technology and retail continued to account for a substantial share of recruitment. Online advertising indicators were weaker, reinforcing the need to distinguish essential hiring from broader expansion.
Regular pay growth slowed to 4.5% and total pay growth to 4.7%, with real increases below 1%. Private-sector regular pay rose 3.6%, while delayed settlements lifted the public-sector figure to 7.9%. Advertised salary measures remained firmer, reflecting continuing competition for particular capabilities.
What this means for talent leaders
More balanced conditions offer an opportunity to tighten role definitions, prioritise high-impact vacancies and benchmark pay carefully. Engineering, IT and healthcare still require a targeted approach to scarce skills.
The briefing also highlights internal mobility, succession planning and upskilling as ways to build capability efficiently. As AI changes workforce requirements, digital skills and job redesign deserve attention alongside recruitment. The early-2026 outlook remains one of gradual loosening, with core service demand helping to limit the slowdown.