Skills shortages threaten UK economic recovery

New research from international recruitment firm, Robert Half, has revealed that over a third of UK employers (36%) within professional services plan to increase permanent headcount in the next six months, signalling cautious optimism amid ongoing economic and geopolitical uncertainty.

However, persistent skills shortages and retention challenges could undermine recovery efforts.

According to the firm’s latest Hiring Intentions research, while these statistics show some recruitment stability for workers in professional services despite the current climate, underlying concerns around access to skills are resurfacing.

Employers cited speed of hiring (71%), availability of qualified candidates (70%), and retention (70%) as the top challenges impacting their workforce strategies. Addressing skills gaps (64%) and re or upskilling the workforce (54%) were also flagged as significant concerns for the coming months.

Despite rising employer taxes and increasing costs associated with hiring, the research indicates that many employers are pressing ahead with essential recruitment plans that unlock growth, meet competitive challenges and build resilience. They recognise that bringing in the right talent is crucial not just to fill roles, but also to introduce the skills needed to drive business change and ensure organisational success.

Permanent hiring stable, but contract still in demand

The study also revealed a gap between permanent and contract hiring intentions, which further reflects market caution. While 36% of employers plan to increase permanent headcount, 31% are turning to additional contract talent to maintain agility and tackle the aforementioned skills shortages.

Matt Weston, Senior Managing Director for UK & Ireland at Robert Half, said, “It’s encouraging to see that many employers in the professional services sector are still planning to grow their teams despite the economic headwinds ahead of the Autumn Budget.

However, our data does suggest that the current cautious optimism we are seeing from hiring managers could be tempered by fears around talent pipelines and skills readiness. Concerns about skills availability across the UK workforce have been bubbling under the surface for some time, but have recently been overshadowed by the challenging economic environment. Now, though, this issue is coming back to the fore, and it risks the potential for further growth in the recruitment market.

“The pressure to find qualified candidates quickly, coupled with retention challenges, means that organisations must think beyond short-term hiring and outside of traditional talent pools. Investing in upskilling, reskilling and diversifying recruitment efforts, whether by reaching into overlooked regions for attracting skilled remote workers, attracting candidates from different sectors, or broadening access for underrepresented groups, is no longer optional – it’s essential for future-proofing the workforce.

“As we approach a pivotal moment in the economic calendar, businesses should use this time to reassess their recruitment strategies, strengthen internal capabilities and ensure they’re building resilient, inclusive teams that can thrive in a changing landscape.”