Labour Market Overview, UK: April 2026
The latest figures point to a continued cooling in employment, with a sharper drop in vacancies suggesting the recruitment market is facing growing pressure, despite some underlying stability.
Employment Trends: Gradual Decline Continues
Estimates from HM Revenue & Customs (HMRC) show that the number of
payrolled employees in the UK fell by
74,000 (0.2%) over the year to February 2026, with a small monthly decrease of 6,000.
Looking at the December 2025 to February 2026 period, payrolled employment declined by 87,000 (0.3%) year-on-year and was broadly flat over the quarter. Early data for March 2026 indicate a further fall of 65,000 (0.2%) on the year and 11,000 on the month, keeping the total at around 30.3 million employees. These figures are provisional and may be revised.
The employment rate for those aged 16–64 was 75.0%, slightly down on the quarter but broadly unchanged compared with a year ago. The unemployment rate fell to 4.9%, while the economic inactivity rate edged up to 21.0%.
Vacancies and Hiring: Demand Drops to Four-Year Low
The number of job vacancies has declined more noticeably this month. Early estimates for January to March 2026 show a drop of 29,000 (3.9%), bringing vacancies down to 711,000 — the lowest level since early 2021.
This marks a shift from recent stability and suggests employers are becoming more cautious. Many businesses are focusing on retention and cost control rather than expanding headcount.
Pay and Earnings: Growth Slows Further
Annual growth in average earnings slowed further, with regular pay rising by 3.6% and total pay by 3.8% in December 2025 to February 2026.
Public sector pay grew faster (5.2%) than private sector earnings (3.2%), although earlier pay settlement effects are now fading.
Adjusted for inflation, real pay growth remains modest. Using CPIH, real earnings rose by 0.2% for regular pay and 0.4% for total pay, with slightly stronger gains when measured by CPI.
Labour Disputes and Claimants
The Claimant Count increased slightly on the month to 1.694 million, though it remains lower than a year ago. Around 39,000 working days were lost due to labour disputes, with disruption continuing in public services.
What This Means for Recruiters
The latest figures point to a more cautious hiring market, with falling vacancies signalling softer demand from employers. Many organisations are slowing recruitment activity and focusing on filling only essential roles.
That said, opportunities remain for recruiters who can adapt.
- Focus on specialist and hard-to-fill roles, where demand remains steady
- Support clients with targeted hiring strategies rather than volume recruitment
- Offer guidance on retention and workforce planning
- Use real wage growth as a tool to attract and secure candidates
While overall hiring activity has eased, the market is becoming more selective rather than stalling completely, creating space for recruiters to add value through insight and expertise.
Office for National Statistics (ONS), released 21 April 2026, ONS website, statistical bulletin, Labour market overview, UK: April 2026
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