Reaction from across the recruitment sector to the Chancellor’s budget has been mixed with recruiters noting the increased costs of employing people which are set to come in over the coming years.
Matthew Wragg, CEO of Gattaca PLC and Matchtech said he thought the Autumn Budget set the stage for a more expensive and competitive labour market. “Rising employment costs, frozen tax thresholds and tighter pension rules will squeeze take home pay and increase pressure on employers to rethink their reward strategies,” he said. “At the same time, long-term investment in infrastructure, energy, defence and skills will continue to drive strong demand for specialist talent. The challenge for 2026 will be balancing higher costs with the need to attract and retain the people who will deliver the UK’s growth ambitions.”
“This budget delivers a mix of welcome measures and missed opportunities,” commented Ollie Whiting, CEO, La Fosse Associates. “On the positive side, fully funded apprenticeships for SMEs are a smart move – investing in skills at the start of someone’s career is exactly what the tech sector needs to widen access to entry-level roles.
“The increase in the minimum wage and targeted cost-of-living support will also give lower-paid workers some breathing space after a tough few years,” he said. “Regional investment in emerging tech hubs is also encouraging, and shows a commitment to spreading opportunity across the UK.”
However, Whiting said the budget stopped short on addressing some of the bigger challenges being faced by employers. “Freezing tax thresholds puts more pressure on take-home pay and on employers already navigating rising wage expectations,” he said.
“Most importantly, it doesn’t fully tackle the drivers of long-term growth: innovation, business investment, and technology adoption,” he said. “Without bold action in these areas, we risk managing symptoms rather than solving the structural issues affecting productivity and employment.”
Elsewhere in the industry, Lee Biggins, Founder and CEO of CV-Library, said the budget brought another jobs tax on businesses adding to employment costs and set to further hit hiring. “Organisations have already seen the cost of employment rise with increased employer NICs, and the measures announced today will simply increase those costs further,” he said. “With job creation well below pre-covid levels, this budget needed to incentivise businesses to hire – but this is simply adding more cost and risk.
“We had hoped the government had learned their lesson with plenty of evidence that its last budget led to less hiring,” he continued. “Now they’re simply going back for more. Job creation is the foundation for economic growth, and this budget – freezing NIC thresholds, reducing salary sacrifice allowances, increasing minimum wage, alongside the added risks brought by employee rights bill – does the exact opposite.”
Finally, Charlotte Shipley-Hall, Co-founder, Zinc said the budget brought a ‘significant burden’ to business payrolls. “The confirmed rise in the National Living Wage and the new tax raid on Salary Sacrifice pension schemes will increase the cost of employment across the entire wage spectrum, from entry-level staff to high-earning professionals,” she said. “Coupled with the extended freeze on income tax thresholds businesses now face a double challenge: absorbing higher operating costs while navigating increased pressure for gross salary increases. This will create an environment of caution where businesses will favour automation and efficiency over hiring.”
Shipley-Hall worries that the impact of these changes will be to shift focus to value and ‘zero-risk’ hiring. “As a result, the need for rigorous due diligence is no longer a best practice; it is essential cost-protection,” she said. “We anticipate hiring will be sharply focused on high-value sectors backed by government investment, such as Infrastructure, Digital Transformation, and Public Services, where the talent war for specialist skills remains fierce. In an expensive and fiscally tight economy, a robust background check is the most critical commercial tool for any employer seeking to de-risk what is now their most expensive investment: people.”
