Home Business NewsRachels tax hikes and wage rises blamed as employers hold back on hiring

Rachels tax hikes and wage rises blamed as employers hold back on hiring

6th May 26 8:37 am

UK job vacancies rose in March for a second consecutive month, offering tentative signs of stabilisation in a labour market that remains significantly weaker than a year ago.

Vacancies increased by 3.74pc month-on-month to 752,711, according to the latest UK Job Market Report from job matching platform Adzuna. However, the overall picture remains subdued, with openings still down 13.6pc compared with March 2025 and hovering near their lowest levels since 2021.

The data suggests the jobs market is attempting to find a floor after a prolonged downturn, but employers remain cautious amid rising costs and global uncertainty.

April’s increase in employer National Insurance contributions and the rise in the National Living Wage have added further pressure on hiring budgets. Many firms appear to be absorbing these higher costs rather than expanding recruitment, particularly in lower-margin sectors.

Global headwinds are also weighing on sentiment, with trade uncertainty tied to US tariff policy and the ongoing conflict in the Middle East contributing to hesitation among export-facing industries.

Despite this, wages continue to rise. The average advertised salary reached £44,327 in March, up 0.55pc on the month and 4.93pc higher year-on-year. Crucially, pay growth remains ahead of inflation, currently running at around 3pc, meaning advertised roles are still delivering modest real-terms gains for workers.

London crossed a symbolic threshold, with average advertised salaries exceeding £50,000 for the first time, reaching £50,867.

However, competition for roles remains elevated. The number of jobseekers per vacancy eased slightly to 2.29 in March, down from 2.40 in February, but remains sharply higher than the 1.81 recorded a year earlier — underscoring how significantly conditions have shifted in favour of employers over the past year.

The labour market continues to show sharp divergence between sectors.

Teaching led monthly growth, with vacancies rising 8.97pc to more than 210,000 roles, making it the largest category on Adzuna. The sector is now 28.4pc higher year-on-year, despite relatively modest average salaries of £37,309.

Domestic Help and Cleaning saw a 25.95pc month-on-month surge, continuing a sustained upward trend since late 2025. The rise coincides with changes to the National Living Wage and growing demand for home-based support services.

Sales, Legal, and Energy, Oil & Gas also recorded solid monthly gains.

By contrast, Consultancy fell 8.08pc and Graduate roles declined 5.61pc, extending a longer-term contraction in early-career hiring.

On an annual basis, Logistics & Warehouse vacancies are down 29.4pc, while Healthcare & Nursing has fallen 35.5pc, making them among the hardest-hit sectors.

Conditions remain particularly challenging for younger workers.

Graduate vacancies fell 1.2pc month-on-month to 10,667 in March and are down 34.9pc compared with a year earlier. The figures sit close to record lows, marking a stark reversal from a peak of more than 55,000 roles in 2017.

While average graduate pay edged up to £26,340, the collapse in available roles continues to dominate the outlook for early-career jobseekers.

Entry-level hiring provided a rare positive signal, rising 2.4pc to 225,634 roles — the highest level recorded in the dataset. Average entry-level pay also increased to £38,137.

Salary growth remains one of the few consistent positives in the data.

Technology continues to lead the market, with average advertised salaries rising 13.5pc annually to £65,347. HR & Recruitment and Domestic Help & Cleaning also recorded double-digit annual growth.

However, salary transparency has continued to deteriorate. Just 43.74pc of job adverts in March included pay information, down from 45.72pc in February. More than half of all roles are now posted without salary details.

London remains the highest-paying region, with average advertised salaries reaching £50,867. Scotland, Wales and the South East all recorded strong annual wage growth.

At the same time, regional competition remains uneven. The North East continues to be the most competitive labour market, with 3.82 jobseekers per vacancy, while the South West remains the least competitive at 1.64.

Northern Ireland was the only region to record annual vacancy growth, albeit marginal at 0.27pc.

Overall, the data points to a labour market that is stabilising at a lower level of activity rather than staging a full recovery — with employers cautious, hiring uneven, and pressure continuing to build on both entry-level and early-career workers.

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