Q2 2026 UK Jobs Market Report

After a turbulent spring, Q2 2026 brought the most encouraging signals in some time: temporary hiring is powering the recovery, permanent placements are edging towards stabilisation following 45 consecutive months of contraction, and starting salaries are picking up. Much unlike musical statues, in this market the advantage goes to those who keep moving.

A Gordon Yates market briefing
Q2 2026

Headline Findings

What This Means for Candidates

If your job search has dragged on longer than you expected, you aren’t the only one. Although that likely won’t be much comfort, lengthy searches are very much reflective of the current market rather than you: permanent placements have now fallen for 45 straight months, and open vacancies sit at a five-year low.[1][2][3]

Although caution and cost-consciousness are still at the forefront for individuals and employers alike, March-June delivered the most encouraging signals in some time. Hiring paused for many firms during the spring as the Iran war escalated, yet by June temp billings were growing at their fastest in over three years and permanent placements showed signs of stabilising.[1][3]

Whether this trend will persist is anyone’s guess – “It is difficult to make predictions, especially about the future”.

Regardless of what the wider market is doing, your best bet is to focus on the things within your control.

Here are our tips for navigating the current job market:

1. Give temporary and contract work serious consideration. This is where demand is strongest right now, as employers push ahead with projects without committing to permanent headcount.[1][3] Contract roles keep your skills sharp and your CV consistent, alongside the obviously helpful income it provides. In our experience, many temp roles become permanent down the line, so they shouldn’t be viewed as an either/or with permanent employment.

2. Adapt to the job market you’re in, not the one you might want. The job market today contains obstacles and hoops that weren’t present (or were configured differently) in the past. For example:

3. Negotiate from an informed position. Starting salaries may be rising at their fastest rate since January, but the job market remains delicate.[1][3][4] Your best bet is to arm yourself with salary data on what similar organisations in your area pay for comparable roles. Our pick of the resources are:

One last thought: momentum matters more than ever in a market like this one. The candidates who fare best in slower periods are those who keep going – taking interim work, adding skills, staying visible, but above all staying sane.

A Note to Candidates

“Adapt to the job market you’re in, not the one you might want. The job market today contains obstacles and hoops that weren’t present in the past”

What This Means for Clients

The latest data on employer sentiment hardly paints a picture of swashbuckling fearlessness: the CIPD’s latest survey reports 58% of employers naming cost management their top priority for the year ahead – before productivity or growth.[5] Belt-tightening is, with certain exceptions, rarely cause for excitement.

Yet despite that fragility, the more foundational numbers tell a steadier story. The economy grew 0.7% in the three months to May[6], unemployment has eased to 4.9%, and hiring activity is levelling out rather than deteriorating.[2]

Three things stand out for employers:

1. Flexible staffing is now the market’s engine. The defining trend of Q2 is the pivot to temporary and contract hiring, with billings growth at a three-year high even as permanent vacancies fell at their steepest rate since January.[1][3] Used well, temp staff let you scale responsively to demand and provide a tested pipeline of permanent hires for when conditions improve.

2. Budget for rising pay. Starting salary inflation is at its highest since January, temp pay is climbing, and April’s National Minimum Wage increase is feeding through cost bases, with median expected pay awards settling around 3%.[1][3][5]

Understanding your cost per hire matters more than ever – stay on top of things using our Cost of Employment Calculator:

True Cost of Employment Calculator →

3. The employer’s market won’t last indefinitely. Candidate availability is still rising sharply, but the pace has eased, and many candidates are now reluctant to move.[1][3] The deep talent pools many employers have grown to expect won’t last forever. Biased though we may be, employers who move decisively now will have less competition for good people than they may in twelve months’ time.

A Note to Clients

“Employers who move decisively now will have less competition for good people than they may in twelve months’ time.”

The Bottom Line

Q2 2026 was a quarter of two halves (two eighths?). Spring hiring was chilled by the Iran war and rising costs, while June brought measurable signs of thaw. Thermal metaphor aside, uncertainty clearly remains – energy prices remain above pre-conflict levels,[4] and there may be more severe consequences to the latest closure of Hormuz than previously[7]. Further Employment Rights Act measures take effect this year,[5] which could act as an additional headwind for some employers.

Lastly, while Downing Street has done its bit to further the temp-led recovery – preparing to welcome its seventh Prime Minister in a decade – the instability is another source of uncertainty. Given Burnham’s relative outsider status, and the rapidity of the transition, the new PM serves as another unknown for employers to factor in.

Yet apart from the political churn and macro volatility, the fundamentals have been steadier than many feared: inflation stands at 2.8%, real pay is rising, and the economy has now grown (albeit fairly glacially) for six consecutive rolling three-month periods.[2][4][6]

Regardless of whether you’re a candidate or an employer, the message from Q2 stands in stark contrast to musical statues received wisdom: the advantage goes to those who keep moving.