Survey by professional body finds third of businesses plan to cut permanent recruitment amid cost pressures and conflict fears
16 February 2026
Employers are growing more cautious ahead of major employment law changes, according to new research by the CIPD, raising concerns that permanent job growth could slow further in an already fragile labour market.
More than a third (37 per cent) of organisations plan to reduce permanent hiring because of Employment Rights Act reforms, as overall hiring intentions remains at a record low outside the pandemic’s first year, according to the CIPD’s Labour Market Outlook survey of more than 2,000 UK employers.
The net employment balance – the difference between employers planning to increase staff and those expecting to cut roles over the next three months – remained at +7 this quarter, the lowest level recorded outside the pandemic.
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Among employers expecting to reduce permanent recruitment because of the Act, the balance dropped to -5.
“Against a backdrop of low business confidence and already weak hiring intentions, our research suggests there is a real risk that the Employment Rights Act measures will act as a further handbrake on job creation and recruitment,” said Ben Willmott, head of public policy at the CIPD.
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