Marvin OnumonuManpowerGroup UK hosted a webinar on 12th February 2026 to discuss the current labour market, the latest results from the Manpower Employment Outlook Survey (MEOS) for Q1 2026 (January to March) and the impact of the Employment Rights Act (ERA) on hiring and workforce planning.
Speakers included Petra Tagg, workforce solutions director at ManpowerGroup UK, Lee Chant, managing director, commercial staffing at ManpowerGroup UK, and Brigitte Crawley at ManpowerGroup UK.
Tagg described 2026 as a year of caution, with many people saying the pending Employment Rights Bill had put the brakes on hiring confidence and that cost increases, particularly for small to medium-sized businesses, were having an impact.
She said the uptick in the unemployment rate to 5% was something everyone was acutely aware of and that it would be closely watched for the rest of 2026.
On sector trends, Tagg identified the IT sector as consistently leading the hiring scale, holding strong and strengthened by artificial intelligence (AI).
The hospitality sector posted a minus 9% outlook, making it the worst performing sector in the survey, and this is driven by rising minimum wage costs and exposure to zero hours.
Tagg added that retail hiring has remained quite subdued compared to the highs in 2025.
Additionally, She said that youth employment pressure is rising within these sectors, hospitality is contracting and retail is flattening, and these are what are typically seen as traditional gateways into the world of work.
Chant said there have been some positive signs in the commercial staffing business, with improved job flow through Q4 that has carried on in January.
He explained that while there is typically a seasonal dip in December, job flow rebounded to 2025 levels by the third week of January – something now seen over the last couple of years.
Chant suggested that this could be a good indicator to say that the market is starting to look better, and it is certainly more robust than it did at the end of Q3 2025.
He said: “The UK job market has been hit by two significant things. One is the National Insurance increase back in 2025, which made businesses stand back and think about their hiring strategies and how they use permanent employees versus hybrid workers.
“When you put the ERB into the mix, it is no good for business confidence, and it does not help. If there is one thing that is for sure, it is that business hates uncertainty.”
Another topic of discussion was about unfair dismissal and day-one rights.
Crawley said there is more clarity emerging, particularly regarding the timeline, which she believes is giving employers greater confidence about how long they have to prepare for the changes.
She said: “Unfair dismissal has received a lot of publicity, largely because of the concessions that the Government have made to get Royal Assent.”
Crawley noted that the qualifying period before individuals can claim unfair dismissal has been retained, rather than moving to the initially proposed day-one rights. She said this is significant in two ways: it helps reduce risk and removes a considerable administrative burden.
She said: “Employers are now switching to how they make best use of that first six months’ employment, and thinking about whether they need to be more on the ball in how they manage probations and performance more closely.”
There has also been increasing interest in temp-to-perm arrangements, which allow employers a period to assess individuals during temporary employment before making permanent offers.
