The picture is mixed, and that matters if you're building a data team. On one hand, the wider labour market is subdued. The Low Pay Commission describes it as 'low hire, low fire', with weaker recruitment and vacancies sitting below pre-pandemic levels the Low Pay Commission's 2025 report. On the other, specialist tech skills are the exception.
Demand for specialist tech skills, including AI, data and enterprise applications, is what drove the market through a cautious 2025 and into 2026 Computer Weekly's tech recruitment outlook. The Office for National Statistics backs this up: the largest volume increase in vacancies from August to October 2025 came in the professional, scientific and technical activities sector, up by 5,000 ONS vacancy data for November 2025. Analytics engineering sits right in that hotspot.
The scale of the sector is real too. The updated digital and technology definition covers 107,082 companies, around 5.2% of all UK companies GOV.UK digital and technology statistics. So when you're hiring an analytics engineer, you're competing inside a large, active market for a narrow band of proven skills.
Part of it is a supply problem you can see coming. The UK tech sector cut graduate jobs by 46% in the past year, with a further 53% drop projected figures from the Institute of Student Employers reported by The Register. Adzuna has recorded a 30% drop in entry-level job postings since ChatGPT launched, leaving graduates facing the toughest market since 2018 techUK's analysis of entry-level and graduate jobs.
That squeeze at the bottom of the ladder has a knock-on effect. Fewer junior hires today means fewer analytics engineers with two to four years' experience tomorrow, exactly the people growing software teams need most. In engineering, entry-level hiring has fallen to -19% while senior hiring sits at -10%, a nine-percentage-point gap GOV.UK's snapshot of entry-level hiring.
There are bright spots. Skills England names digital and engineering occupations among its priority list, many already in high demand and expected to keep growing strongly the Skills England annual skills report 2026. And the talent is closer to home than you might think: for engineering, the vast majority of new hires come from the resident labour force, so reliance on international recruitment is low GOV.UK's review of professionals in IT and engineering.
Start by being precise about the role. An analytics engineer sits between data engineering and analysis: they model data, build reliable pipelines and turn raw tables into something the business can trust. Write the job around the specific skills you need today, not a wishlist, because it's specialist demand that's moving the market as Computer Weekly notes for 2026.
Move quickly. In a 'low hire' market the strongest people still get multiple approaches, so a slow process loses them. Set your interview stages in advance, keep them to a practical exercise plus a conversation, and give a clear decision timeline.
Build your own pipeline instead of waiting for one. With junior hiring falling, more employers are growing their own: apprenticeships have risen from 3% of AI hires in 2020 to 19% in 2025 the DSIT AI Labour Market Survey 2025. Pairing a mid-level analytics engineer with an apprentice or a strong junior is a practical way to protect your future supply while the market stays tight a pattern echoed in the KPMG and REC UK Report on Jobs.
Finally, widen where you look. The resident labour force holds most of the engineering talent per the same IT and engineering review, so cast a net across regions, sectors and people who've done analytics work under a different job title.
This is where we come in. Reed.ai searches a database of 15 million candidates to find and rank the right analytics engineers for your team, and manages the process end to end, from shortlist to booked interview. Our recruitment agent manages recruitment end to end for 8% on a successful hire, with no monthly fee and no upfront cost. If you're growing a software team and need proven data skills fast, start a role with us today and see your shortlist.
