Budget must bring back hiring confidence, labour market experts said Wednesday, urging Chancellor John Healey to focus on hiring incentives in the upcoming Budget.
Active job postings reached the highest level since March 2024, rising 12.1% from the previous month, according to the REC’s monthly tracker.
“Confidence remains fragile,” said Maxine Bligh, interim chief executive of the REC, at a pre-budget press conference.
Bligh urged the chancellor to centre his Budget on three “Cs”: conviction in supporting businesses, cuts to employment costs, and renewed confidence to invest and hire.
Naomi Clayton, chief executive of the Institute for Employment Studies, noted “tentative signs” that the labour market is stabilising after months of decline.
She added that the market has stopped falling but has not yet begun to recover, with retail and hospitality sectors experiencing some of the largest drops in pay-rolled workers.
Government data show that over a quarter of young unemployed workers have been out of work for a year or more, highlighting persistent youth joblessness.
The REC’s tracker reported an 11.8% year-on-year rise in active job openings for September, with 848,335 new postings, a 19% increase from August 2026 and a 9.8% rise from September 2025.
These figures suggest that fewer workers are leaving jobs rather than a surge in new hires, a pattern that may keep overall employment levels flat for the near term.
Analysts interpret the flat employment trend as a signal that firms remain cautious about expanding payrolls, especially in sectors that have seen recent wage pressure.
Policy proposals
Lee Chant, managing director of ManpowerGroup UK & Ireland, described the current moment as a “handbrake on, handbrake off” for businesses awaiting Treasury decisions.
He warned that unexpected Budget measures could reverse the modest optimism businesses currently feel.
The REC is seeking a “sign of intent” on taxes, specifically a reduction in employer national insurance contributions, which presently sit at 15%.
It also called for a review of Employment Rights Act provisions on guaranteed hours, arguing that temporary agency work can be a vital entry point for many young people.
The organization also proposed more support for short, targeted training programmes and easier access for temporary workers.
Targeted assistance for young people could build on existing schemes such as the Youth Jobs Grant and Jobs Guarantee, and extend support to those not currently on Universal Credit.
Business community response
Chant said firms need the ability to “plan, to have more confidence and swagger,” and that reforms could help channel demand into hiring.
All government office regions reported growth in those listings for the second consecutive month, indicating a broad-based, if uneven, improvement.
Leave a Reply