The UK job market is facing one of its toughest periods in years. Recruiters, whose main role is to help people find jobs, are now fighting to protect their own future. Rising business costs, fewer job openings, and the fast growth of artificial intelligence (AI) are changing the rules of hiring. What once felt secure is now filled with uncertainty, and the facts are hard to ignore.
Why Hiring Is Slowing Down
As 2026 begins, hiring across the UK remains weak. Both temporary and permanent roles are affected, but permanent jobs are suffering the most. Many companies are nervous about the future and prefer to delay hiring rather than take risks.
Key signs of a slowing job market include:
- Employers cutting back on hiring at the end of 2025
- 2.5 unemployed people competing for every job vacancy
- Workers choosing job security over switching roles
Global conflicts, rising costs, and economic instability are pushing businesses to act cautiously. Even unhappy employees are staying put, afraid that moving jobs could lead to unemployment later.
But when companies stop hiring, and workers stop moving, a serious question appears:
What happens to recruiters when the job market freezes?
Recruiters Feel the Financial Strain
Recruitment firms such as PageGroup and Hays are feeling intense pressure. Their earnings depend on successful job placements, especially permanent ones. Unfortunately, this part of the market is struggling the most.
Since 2019, industry analysts estimate that:
- Net fees in permanent recruitment have fallen by double digits
- Profits at some firms have dropped by up to 85%
- Hiring decisions now take much longer than before
Recruiters are also dealing with new challenges in the hiring process:
- Candidates declining interviews
- Last-minute withdrawals from job offers
- More counteroffers from current employers
Public sector hiring is especially weak, sitting at its lowest point since the pandemic. At the same time, advertised salaries have risen by 7.7%, especially in IT jobs. While higher pay sounds positive, it increases costs for employers and makes them even more careful about hiring.
Just as recruiters try to manage these problems, another powerful force enters the picture.
How AI Is Changing Work
Artificial intelligence is no longer a future idea; it is already reshaping workplaces. Companies are using AI to complete tasks faster and at lower costs. In some cases, this has led to real job losses.
Recent examples show how serious the change is:
- McKinsey & Company cut 200 tech jobs after shifting work to AI
- Banks and airlines have warned that AI could put more roles at risk
- Jobs in IT, finance, and accounting face the greatest pressure
These are the same sectors many recruiters rely on. When companies need fewer workers, recruiters have fewer roles to fill. AI can now:
- Scan thousands of resumes in seconds
- Match skills to job requirements
- Automate interview screening
This leads to an uncomfortable question: If AI can recruit faster and cheaper, do companies still need human recruiters?
Cut Out of the Process
AI is not just changing jobs; it is changing how hiring happens. Online platforms now connect employers directly with freelancers and workers, reducing the need for recruitment agencies.
This shift creates serious risks for recruiters:
- Employers managing hiring on their own
- New job platforms lowering entry barriers
- Fewer clients and fewer candidates
Temporary hiring remains weak in many countries, and permanent hiring continues to underperform. Analysts warn that recruitment earnings may stay low for longer than expected.
There are small signs of hope. The US job market looks stronger than the UK’s, and some firms are saving money through restructuring. Still, the challenges are growing.
The Road Ahead: Change or Be Left Behind
The future of UK recruiters is uncertain, but not hopeless. While economic conditions may improve, AI is here to stay. To survive, recruiters must focus on what machines cannot replace: human relationships, judgment, and trust.
This difficult period could mark the decline of traditional recruitment or the start of a smarter, more flexible industry. One thing is clear: the job market is changing fast, and those who fail to adapt may be left behind.
