Capacity & Growth
UK Hiring Confidence Just Hit a Record Low. Move Anyway
3 September 2026 · Outsourcery
CIPD's winter Labour Market Outlook put UK employers' net hiring balance at +7, the lowest reading on record outside the pandemic. More than a third of employers, 37%, say they're cutting back permanent recruitment specifically because of the Employment Rights Act. Most of the market is reading that as a reason to sit still. It's the reason to move.
The numbers behind the freeze
Among the employers cutting permanent recruitment because of the Employment Rights Act, the net hiring balance drops to -5. Overall, 74% expect the Act to raise their employment costs, and 15% anticipate significant recruitment difficulties in the next six months. Separately, ONS data puts UK vacancies at around 707,000 for May to July 2026, the lowest level since September to November 2014.
None of this is a blip in one sector, it's the continuation of a slowdown we've tracked for months. It's a broad, structural bout of caution, and it's showing up in the same data every quarter.
Why "everyone's freezing" is your advantage
When permanent hiring freezes, the work doesn't stop landing on someone's desk. It piles up. Founders who solve the capacity problem without adding a fixed, Employment Rights Act-exposed headcount are the ones still growing while competitors wait for a clarity that may not arrive on any predictable date.
There's a quieter benefit too. Good people are still moving, and right now they're competing against far less demand for their attention than usual.
What moving looks like right now
Start by separating two different questions that founders tend to merge: do we need more capacity, and do we need a permanent UK hire? They're not the same decision. Fractional or remote support can add real capacity without carrying the same day-one liabilities that are making the rest of the market so cautious, which is why South Africa has become such a popular route for UK founders building capacity right now; it lets you keep building while everyone else waits to see how the numbers settle.
FAQ
What is the UK's current hiring confidence level?
CIPD's winter Labour Market Outlook recorded a net employment balance of +7, the lowest level on record outside the pandemic.
Why are employers cutting back on permanent hiring?
37% of employers surveyed say they're specifically reducing permanent recruitment because of cost and risk concerns tied to the Employment Rights Act.
Are UK job vacancies falling?
Yes. ONS data puts vacancies at around 707,000 for May to July 2026, the lowest level since September to November 2014.
Is a hiring freeze the same as no growth?
No. Work that needs doing doesn't disappear when permanent hiring pauses; it just needs a different structure to get done.
What's an alternative to a permanent UK hire right now?
Fractional or remote support that adds capacity without the same fixed, Employment Rights Act-exposed commitment as a direct permanent hire.
Sources
The No Compromise Newsletter
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