Skills shortages persist as UK vacancies fall
Nearly a third of employers report hard-to-fill vacancies despite UK vacancies falling 10% below pre-pandemic levels, according to the CIPD.
UK employers continue to face skills shortages despite vacancies falling below pre-pandemic levels, according to the latest CIPD Labour Market Outlook.
UK vacancies fell to 712,000 in April to June 2026, 10% below their pre-pandemic level and well below the 1.29 million peak recorded in the same period in 2022. Despite the decline, 31% of employers report hard-to-fill vacancies.
Some 14% expect significant recruitment difficulties during the next six months, with a further 34% anticipating minor problems.
Recruitment pressures vary considerably by sector. Some 23% of employers in construction expect significant difficulties filling vacancies over the next six months, up from 9% in the previous quarter. The figure is also 23% among employers in care, social work and other healthcare activities and human health activities. In retail, it is 4%.
The figures indicate that skills mismatches persist even as overall demand for workers has weakened.
Employer hiring intentions also remain well below their pre-pandemic level. The CIPD's net employment balance, which measures the difference between employers expecting staffing levels to increase and those expecting them to fall, stands at +9. The measure averaged +19 between 2014 and 2019.
Only 62% of employers plan to recruit during the next three months. Among private sector employers, 57% plan to recruit, the lowest proportion since the CIPD began collecting the measure in 2016, excluding the pandemic.
Across employers, 26% expect staffing levels to increase during the next three months, 17% expect a decrease and 49% expect staffing levels to remain unchanged.
James Cockett, senior labour market economist at the CIPD and an author of the report, said the prolonged slowdown could affect organisations' ability to renew their skills base.
'A stagnant labour market closes off routes into work for first-time jobseekers, blocks progression for existing employees, and erodes the talent pipeline organisations rely on to refresh skills and support innovation,' he said.
Redundancy intentions have remained relatively stable, with 21% of employers planning redundancies in the three months to September. The CIPD characterised the labour market as a 'low hire, low fire' environment.
The organisation called for government action to increase employment opportunities for young people, including an Apprenticeship Guarantee for 16 to 24-year-olds. It said nine in 10 employers support the proposal.
It also called for the employer National Insurance threshold to be restored to £9,100 a year and for plans to align the minimum wage for 18 to 20-year-olds with the adult rate to be paused.
The report also examined employers' expectations of forthcoming reforms covering zero-hours and low-hours contracts. Among employers that had used these workers during the previous 12 months, 45% said implementation would be difficult.
Around two-thirds expect the changes to increase administration and compliance work, HR and management time and costs. Some 33% expect to increase their use of self-employed or atypical workers and 31% expect redundancies to increase following the reforms.
Median expected basic pay increases remain at 3%, unchanged for more than two years.
The Labour Market Outlook was based on a YouGov survey of 2,017 senior HR professionals and decision-makers conducted between 24 June and 24 July 2026. The sample was weighted to represent UK employment by organisation size, sector and industry.
CIPD Labour Market Report
- 712,000 UK vacancies, April to June 2026
- 10% below pre-pandemic vacancy levels
- 31% of employers have hard-to-fill vacancies
- 14% expect significant recruitment difficulties in the next six months
- 23% of construction employers expect significant recruitment difficulties
- 62% plan to recruit in the next three months
- 57% of private sector employers plan to recruit, a record low outside the pandemic
- +9 overall net employment balance, compared with a +19 average in 2014–19
- 21% plan redundancies in the three months to September
- 3% median expected basic pay increase