The ONS Business Insights and Conditions Survey, released on 5th March 2026, provides a snapshot of the pressures UK employers face around staffing costs, recruitment, and workforce availability.
While some labour market indicators suggest conditions have eased slightly compared with late 2025, businesses are still navigating a complex mix of rising employment costs and persistent skills shortages.
With further employment cost changes coming into effect from April, workforce planning is increasingly strategic. Hiring decisions now require balancing operational needs with rising costs and skills availability.
Staffing Costs Continue to Rise
41% of businesses reported that staffing costs had increased in the previous three months, including wages, bonuses, National Insurance contributions and pension payments.
More than half (55%) expect costs to rise further in the next quarter. This combination of current and upcoming cost pressures demands for workforce planning to be a major business priority for UK businesses.
Recruitment Difficulties Remain for One in Five Businesses
The survey found that 20% of businesses experienced recruitment difficulties in January 2026, meaning one in five organisations are still struggling to hire. This figure is lower than the levels reported in late 2025, but recruitment challenges remain a reality.
Among businesses reporting difficulties:
- 47% said there was a lack of qualified applicants
- 29% said they received too few applications
While candidate numbers fluctuate, the right skills remain scarce, creating ongoing hiring challenges.
Worker Shortages Are Still Affecting Operations
17% of businesses reported being affected by worker shortages in February 2026, a figure broadly stable since late 2024.
For sectors reliant on skilled operational staff, logistics workers, manufacturing employees or warehouse teams, workforce reliability continues to be critical.
Wage Growth Is Stable but Staffing Costs Are Rising
Only 18% of businesses reported increases in hourly wages for employees in January 2026, broadly in line with previous periods.
Even with stable wages, rising National Insurance and other employment costs from April will add pressure on overall budgets. This reinforces the need for planning, efficiency, and retention strategies rather than relying on wage increases alone.
What This Means for Hiring Managers
The latest ONS data highlights a workforce landscape that is still challenging for UK employers: rising staffing costs, skills shortages, worker availability pressures, and now legislative changes coming into effect from April. For hiring managers, this is a clear signal that reactive hiring is no longer sufficient; strategic workforce planning is essential.
Here are the key areas employers should focus on:
1. Review and Forecast Workforce Costs
With 41% of businesses already reporting increased staffing costs and 55% expecting further rises, employers must examine both current payroll and projected costs. The April changes, which include updates to National Insurance thresholds and minimum wage rates, will add another layer of financial planning.
Actions:
- Update payroll projections to account for the April cost changes.
- Identify roles where cost increases could impact profitability or productivity.
- Plan for potential adjustments in hiring budgets or scheduling to manage costs effectively.
2. Audit Current Recruitment Channels
The survey shows 20% of businesses are still struggling to recruit, with a lack of qualified applicants and low application volumes. This means traditional recruitment channels may not be sufficient.
Actions:
- Evaluate the performance of your current job boards, agencies, and in-house recruitment efforts.
- Consider expanding outreach to specialist recruitment agencies who have access to hard-to-reach candidates in key sectors.
- Strengthen employer branding and candidate value proposition to attract quality applicants.
3. Focus on Skills Mapping and Internal Talent
With nearly half of struggling businesses citing a lack of qualified candidates, it’s vital to understand your existing workforce skills and where gaps exist.
Actions:
- Conduct a skills audit across teams to identify development opportunities.
- Consider upskilling or reskilling internal talent rather than relying solely on external hires.
- Create succession plans to reduce the risk of key roles remaining vacant.
4. Flexible and Contingency Planning
Worker shortages continue to affect 17% of businesses, highlighting that even with strong recruitment, gaps can occur.
Actions:
- Build flexible staffing models, including temporary or contingent workers, to cover peaks or unexpected absences.
- Partner with agencies that can supply skilled temporary staff quickly.
- Review shift patterns and workload distribution to optimise productivity without overburdening staff.
5. Proactive Compliance and Legislative Readiness
April brings changes to employment costs and rights, which will affect hiring budgets, contracts, and compliance obligations. Hiring managers must be prepared:
Actions:
- Ensure all employment contracts reflect new minimum wages and National Insurance changes.
- Review HR and payroll systems to ensure compliance from day one.
- Communicate transparently with staff about any operational or pay changes to maintain trust and morale.
6. Integrate Data Into Strategic Decisions
The ONS survey demonstrates the importance of data-informed workforce planning. Employers who combine market insights with internal metrics can anticipate issues before they arise.
Actions:
- Track recruitment KPIs such as time-to-hire, vacancy fill rates, and candidate quality.
- Use market intelligence from industry surveys to benchmark pay rates and benefits.
- Build a rolling workforce plan that accounts for upcoming legislative and economic changes, not just current demand.
Swift’s Recommendation
The combination of rising costs, persistent skills shortages, and legislative changes makes early and strategic workforce planning essential. Employers who proactively review budgets, recruitment strategies, skills gaps, and compliance obligations will be better positioned to secure the talent they need while managing costs.
Working with a trusted recruitment partner like Swift can provide:
- Access to skilled candidates, including those hard to reach
- Flexible staffing solutions to cover peaks and gaps
- Guidance on compliance and labour law changes
This ensures your business can adapt quickly, remain competitive, and retain a reliable workforce throughout 2026 and beyond.