Hiring in the UK weakened again in January, pushing advertised vacancies to their lowest level in five years, which may signal growing challenges for policymakers and labour analysts in maintaining employment levels.
Vacancies declined by 3.05% month-on-month to 694,940 roles, marking the lowest level in five years and signalling a notable contraction in the UK labour market.
The figures suggest the labour market is edging closer to pandemic-era conditions.
With vacancies falling, competition for roles is increasing.
The figures suggest the labour market is edging closer to pandemic-era conditions, with unemployment climbing to 5.2%, a development that should prompt HR professionals and policymakers to consider potential impacts on workforce stability.
Youth unemployment has risen more sharply, reaching 16.1%, the highest level in more than a decade. Entry-level vacancies are down 4.4% year-on-year, while graduate roles have plunged 45% annually, the steepest annual drop since late 2020.
The number of young people not in education, employment or training (NEETs) stands at 946,000, remaining near record highs.
Despite weaker hiring, pay continues to rise.
The average advertised salary reached £43,289 in January, up 0.69% month-on-month and 5.98% year-on-year — comfortably ahead of inflation, which recently fell to 3%.
Seven sectors recorded particularly strong annual pay growth:
- IT (+12.79%)
- Domestic Help & Cleaning (+12.4%)
- HR & Recruitment (+9.36%)
- Retail (+8.19%)
- PR, Advertising & Marketing (+7.65%)
- Sales (+6.7%)
- Consultancy (+6.29%)
Public sector pay rose 7.2% annually, outpacing the private sector’s 3.4% growth.
IT remains the highest-paid sector, with average salaries climbing to £63,428. Meanwhile, Logistics & Warehouse saw the sharpest monthly salary drop (-2.53%), and Maintenance roles recorded the biggest annual pay fall (-3.70%).
After a temporary December rebound, entry-level and graduate hiring weakened again in January.
- Entry-level vacancies fell 4.46% month-on-month to 197,044 roles
- Graduate jobs dropped 19.1% monthly
- Graduate vacancies are now down 45% year-on-year
Professional sectors also struggled. Legal, Property, IT, and Accounting & Finance roles all declined monthly, alongside HR, Healthcare & Nursing, and Engineering.
Frontline sectors saw sharper contractions:
- Logistics & Warehouse (-17.58%)
- Retail (-15.37%)
- Hospitality & Catering (-11.57%)
However, some resilience emerged. Domestic Help & Cleaning roles rose 3.92% monthly, while Teaching vacancies increased 4.07% and are up nearly 12% annually.
All UK regions recorded monthly declines in vacancies.
All UK regions experienced monthly declines in vacancies, with London dropping the most at-5.61%, while the North East saw the smallest fall of-0.89%, yet faces the highest competition with 3.91 jobseekers per vacancy.
By contrast:
- South West: 1.62 jobseekers per role
- South East: 1.73 jobseekers per role
Every region recorded annual pay growth.
Wales posted the strongest increase (+10.66%), marking a full year of double-digit rises. Scotland (+8.39%) and Northern Ireland (+7.31%) also saw robust gains.
London remains the highest-paying region, with average salaries at £49,966, approaching the £50,000 mark.
Adzuna’s Trending Jobs list reflects ongoing demand in logistics and support roles.
Warehouse Worker topped the list in January, followed by Healthcare Support Worker and Cleaner. Lorry Driver and Delivery Driver also ranked highly, underscoring sustained demand in transport despite wider hiring slowdowns.
The January data paints a picture of a labour market entering 2026 with:
- Falling vacancies
- Rising unemployment
- Increased competition
- Slowing but still positive wage growth
While pay growth offers some encouragement, the sharp fall in graduate and entry-level opportunities suggests younger workers face the toughest conditions.
If the current trajectory continues, economists warn the labour market could move further toward stagnation in the first half of 2026, particularly if business confidence remains subdued.
Andrew Hunter, co-founder of job matching platform Adzuna, said: “As economists point to ONS data that suggests hiring rates are levelling off, the live picture from advertised jobs tells a different story.
“Our January figures show hiring is approaching pandemic-era levels, and with graduate roles falling to a record low, this suggests the market is far from being on stable footing – yet. There are signs of resilience as 2026 gets underway. Wages continue to rise steadily, outpacing inflation for another month and several key sectors are seeing strong growth as employers compete for skilled workers.
“It’s encouraging to see areas such as Teaching and Domestic & Cleaning continue to add jobs, showing that demand hasn’t disappeared entirely across the economy.
“Although competition for roles remains high, these pockets of strength suggest businesses are beginning to adapt to tougher conditions and invest where it matters. For jobseekers in early 2026, the market remains challenging, with fewer vacancies and intense competition, but continued wage growth suggests employers are still willing to pay for the right skills.”
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