2026 Autumn Budget: What every employer and professional needs to know 

As the Chancellor unveiled the 2026 Autumn Budget on 26 November, employers and professionals now have clarity on the fiscal measures that will shape workforce strategies and career plans for the year ahead. With rising employment costs, persistent skills shortages, and evolving employee expectations, the Chancellor’s decisions carry significant implications for hiring, pay, and organisational agility.

Using data from our 2026 Salary & Recruitment Trends guide, supported by our research of over 5,100 respondents across the country, we’ve set out how the Budget announcements will influence workforce trends for the year ahead.

Minimum wage increase adds to employment costs

The Budget confirmed that the National Minimum Wage will rise to £12.71 per hour from April 2026 for workers aged 21 and over, alongside increases for younger workers and apprentices. This change will add substantial payroll pressure, particularly in sectors reliant on lower-paid roles, and may trigger wage compression across pay bands.

Employers are already grappling with higher NICs and the cost of complying with new workers’ rights under the forthcoming Employment Rights Bill, which introduces stricter rules on zero-hour contracts, expanded parental leave rights, and stronger enforcement of holiday and sick pay. The Government estimates overall this could cost businesses up to £5 billion annually.

Employers focused on growth remain open to hiring

Despite rising costs, our latest salary guide data shows that 77% of employers plan to recruit new talent in the coming year, reflecting the drive for business growth and continuity. However, the Budget’s measures may prompt leaders to adopt more agile hiring strategies. Over half (55%) anticipate revising their approach within the next 12 months, with increased reliance on temporary and contract staff to manage costs and maintain flexibility.

Employers should also prepare for business rates reform in April 2026, which aims to ease pressure on high street businesses while shifting more burden to large distribution sites. Scenario planning for these changes will be essential.

Ambitious professionals could seize new opportunities

The Chancellor extended the freeze on income tax thresholds until 2031, meaning millions of UK taxpayers will be pushed into higher tax brackets as wages rise. This ‘stealth tax’ could drive professionals – particularly high earners – to seek new roles offering better compensation or benefits.

Our data shows that 62% of professionals plan to change jobs in the next 12 months, up from last year. However, with employers facing tighter margins, jobseekers should expect a more competitive market and focus on demonstrating how their skills add immediate and long-term value; especially as organisations accelerate automation and AI adoption.

Skills and workforce development in the spotlight

Persistent skills shortages continue to negatively impact productivity and hiring across all levels. According to our latest salary guide, 93% of employers have experienced skills shortages in the past 12 months, unchanged from the previous year. These shortages have had tangible consequences:

• 55% report reduced productivity
• 42% cite lower employee morale
• 37% say projects have been delayed or disrupted

The Autumn Budget’s commitment to Skills England initiatives – including the expansion of T Levels, foundation apprenticeships, and Local Skills Improvement Plans – is a positive step. However, any investment in skills will only succeed if employers and government work together to close gaps and build future-ready talent pipelines. For organisations, this means exploring partnerships with education providers and leveraging available funding to accelerate workforce development.

A reinforced need for strategic planning

The signals are clear: employers must prepare for higher costs and evolving workforce expectations. Strategic workforce planning is no longer optional, especially given upcoming changes to employment legislation and benefits rules – such as the new cap on salary-sacrificed pension contributions above £2,000 annually from April 2029.

Whether you’re planning to scale your team, optimise your contingent workforce, or refine your pay strategy, we are here to help. Our recruitment services and workforce solutions are designed to support your hiring goals and ensure you’re ready for what’s next.

Get in touch with one of our expert consultants to find out how Hays can support your hiring goals and workforce ambitions.

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