The UK recruitment market is sending mixed signals in October 2026. Job vacancies have fallen below 700,000 for the first time since 2021, yet recruitment consultancies report the strongest rise in permanent placements for four years. This monthly UK recruitment market update brings together the latest ONS labour market statistics, the KPMG and REC Report on Jobs and the policy changes landing this month, and explains what they mean for employers, in-house talent teams and recruitment agencies planning their recruitment marketing.

Last updated: 26 October 2026. Our next UK update follows the ONS labour market release on 17 November 2026.

UK recruitment market at a glance: October 2026

  • UK vacancies fell by 21,000 to 691,000 in July to September 2026, the first time below 700,000 since February to April 2021 (ONS).
  • UK unemployment was 4.7% in June to August 2026, with 2.4 unemployed people per vacancy (ONS).
  • Permanent placements rose for a second month in September 2026, the strongest rise in four years (KPMG and REC).
  • 40% of UK employers plan to increase staffing levels in Q4 2026 (ManpowerGroup).
  • Key dates: pay transparency consultation closes 27 October, Autumn Budget 28 October, new Employment Rights Act duties from 30 October.

UK labour market statistics: the key numbers

Measure (UK) Latest figure Period Source
Job vacancies 691,000 (down 21,000 on the quarter) July to September 2026 ONS
Vacancy rate 2.1% July to September 2026 ONS
Unemployment rate (16+) 4.7% June to August 2026 ONS
Unemployed people per vacancy 2.4 June to August 2026 ONS
Employment rate (16 to 64) 75.3% June to August 2026 ONS
Regular pay growth 3.7% (private sector 3.0%) June to August 2026 ONS
Net Employment Outlook +23% Q4 2026 ManpowerGroup

What is happening to UK job vacancies?

Early estimates show UK vacancies fell by 21,000 (2.9%) to 691,000 in July to September 2026, the first time the total has been below 700,000 since February to April 2021. Vacancies fell in 14 of the 18 industry sectors, with the largest fall in construction (down 7,000), and the biggest drop by business size was among firms with 1 to 9 employees (down 21,000). The UK vacancy rate was 2.1% (Source: ONS, Vacancies and jobs in the UK, October 2026).

The ONS said feedback from its Vacancy Survey “continues to suggest that smaller firms may not be recruiting because of increases in labour costs” (Source: ONS, Labour market overview, UK, October 2026).

Elsewhere the picture is steadier. UK unemployment was 4.7% in June to August 2026, down 0.1 percentage points on both the year and the quarter, and the employment rate rose to 75.3%. There were 2.4 unemployed people for every vacancy (Sources: ONS, Labour market overview, October 2026; ONS, Vacancies and jobs, October 2026). Indeed Hiring Lab described the October figures as “Signs of Stabilisation”, noting payrolled employment rose by a provisional 13,000 in September (Source: Indeed Hiring Lab, UK Employment Figures, October 2026).

Is UK hiring starting to recover?

Recruiters are seeing early green shoots. The KPMG and REC UK Report on Jobs, based on a survey of around 400 UK recruitment and employment consultancies, found a back-to-back rise in permanent placements in September 2026 which, “though marginal, marked the strongest rise in four years”. Overall demand for workers fell at the weakest rate in just over two years, and there was “the first improvement in demand for permanent private sector staff for over two years” (Source: KPMG and REC, UK Report on Jobs, October 2026).

The recovery is uneven by region and sector. Three of the four monitored English regions recorded higher permanent placements, led by the North of England, while the South of England saw a decline. Demand for permanent staff was led by IT and Computing and Engineering, while the sharpest falls in vacancies were in Retail and Hotel and Catering (Source: KPMG and REC, October 2026).

Employer surveys point the same way, with caution. The ManpowerGroup Employment Outlook Survey gives the UK a Net Employment Outlook of +23% for Q4 2026, more than double the +11% of Q4 2025, with 40% of employers planning to increase staffing levels and 43% planning to hire for entry-level roles (Source: ManpowerGroup UK, Employment Outlook Survey Q4 2026). The CIPD’s most recent Labour Market Outlook, published in August, was more cautious: only 62% of UK employers planned to recruit in the following three months (Source: CIPD, Labour Market Outlook, Summer 2026).

UK candidate availability and pay trends

Candidate availability continued to rise in September 2026, but at the slowest rate in three years, and permanent candidate supply grew at the weakest rate since September 2023. Permanent salary growth slowed for the first time in four months and stayed below its historical average (Source: KPMG and REC, October 2026).

Official pay data tells a similar story. Annual growth in regular pay was 3.7% in June to August 2026, at 3.0% in the private sector and 6.3% in the public sector. After inflation (CPIH), regular pay grew by just 0.6% (Source: ONS, Labour market overview, October 2026).

What it means: there are more candidates than a year ago, but the pool is no longer growing as quickly and pay rises are modest. Specialist and skilled candidates still have options, so your employer brand and the clarity of your job ads matter as much as your salary.

Key dates for UK employers: pay transparency, the Budget and the Employment Rights Act

  • 27 October 2026: pay transparency consultation closes. The government’s equal pay and pay discrimination consultation closes at 5pm (Source: GOV.UK). It proposes requiring all employers to publish pay information in job ads, or to give it in writing before interview where there is no job ad (Source: GOV.UK, consultation document). No final decision has been made.
  • 28 October 2026: Autumn Budget. The Chancellor presents the Budget, with new Office for Budget Responsibility forecasts published the same day (Source: House of Commons Library, Autumn Budget 2026 briefing). Indeed Hiring Lab notes that employers are waiting for “greater clarity about the government’s tax plans and what it means for their cost base”.
  • 30 October 2026: new Employment Rights Act 2025 duties. Employers will have a new duty “not to permit” harassment by third parties and must take “all” reasonable steps to prevent sexual harassment. New trade union rights of access also start. The Employment Tribunal time limit for most claims already rose from three to six months on 1 October 2026 (Source: CIPD, UK employment law changes October 2026).
  • 5 November 2026: Bank of England decision. Bank Rate was held at 3.75% in September, and the next decision is due on 5 November (Source: Bank of England, Monetary policy).
  • 17 November 2026: next ONS labour market release (Source: ONS release calendar).

What this means for UK recruitment marketing

  • Stay visible while competitors go quiet. Hiring is picking up first in permanent roles, IT, engineering and the North of England. Employers who keep their employer brand active now are best placed when confidence returns.
  • Get your job ads ready for pay transparency. Audit which roles show pay, agree a consistent approach to salary ranges and brief hiring managers. Our guide to pay transparency in UK job ads covers the options.
  • Focus budget on hard-to-fill roles. With more applicants for volume roles, spend should go where the competition for skills is highest. Recruitment advertising optimisation helps you cut wasted spend on job boards.
  • Plan for entry-level hiring. With 43% of UK employers planning entry-level hires in Q4, early careers messaging and skills-based hiring can widen your talent pool.
  • Be found in search and AI answers. Candidates increasingly research employers through Google and AI assistants, so careers pages need strong SEO and AIO to appear when they search.

Conclusion

The UK recruitment market in October 2026 is cautious but steadying. Vacancies are at their lowest since early 2021 and smaller firms are holding back, yet permanent placements are rising and employer hiring plans for Q4 are stronger than a year ago. With pay transparency, the Budget and new employment law duties all landing within days of each other, this is the moment to review your job ads, sharpen your talent attraction strategy and make sure your recruitment marketing can scale quickly when hiring returns.

Hiring in Australia as well? Read our Australia Recruitment Market Update, October 2026.

Hiring in other markets? Read our UAE Recruitment Market Update, October 2026, European Recruitment Market Review, Q3 2026 and Global Recruitment Market Review, Q3 2026.

Sources

Planning your recruitment marketing for 2027? Get in touch with RMG to talk about your employer brand, job ads and talent attraction plans for the year ahead.