The wider labour market is best described as 'low hire, low fire', with weaker recruitment and vacancies sitting below pre-pandemic levels Low Pay Commission Report 2025, GOV.UK. The latest official figures show vacancies easing again, with professional, scientific and technical activities among the sectors seeing the largest quarterly falls ONS - Vacancies and jobs in the UK.
Yet the same sector has also shown genuine pulses of demand. In late 2025 the biggest volume increase in vacancies came in professional, scientific and technical activities, up by 5,000 ONS – Vacancies and jobs in the UK: November 2025. So the market is not simply shrinking. It is sorting. Employers are cautious about volume and specific about skills, and that is changing what good software hiring looks like.
Against a subdued 2025 backdrop, businesses took a careful approach to hiring, but clear demand hotspots held up for specialist skills including AI, data, enterprise applications and cyber security Computer Weekly (tech recruitment outlook 2026). The question for hiring teams is no longer just how many developers, but which capabilities, and how you spot them.
AI leads the pack. Demand for AI skills rose by nearly 200% in a year, with London accounting for 80% of AI-related job postings and close to two-thirds of all UK technology vacancies The Register (Accenture data). Cyber security is growing steadily too: the UK cyber workforce sits at around 143,000 people, with growth accelerating from 2% in 2022 to 5% in 2024 Cyber security skills in the UK labour market 2025 - GOV.UK.
The routes into these roles are changing shape. Apprenticeships have climbed from 3% of AI hires in 2020 to 19% in 2025 GOV.UK / DSIT – AI Labour Market Survey 2025 report. That points to employers building talent as well as buying it, and valuing capability over credentials.
The tougher story is at entry level. UK tech cut graduate jobs by 46% in the past year, with a further 53% drop projected The Register. Adzuna has recorded a 30% fall in UK entry-level postings since ChatGPT launched, leaving graduates facing the toughest market since 2018 techUK – What's actually happening with entry-level and graduate jobs?. In engineering, entry-level hiring has fallen to -19% against -10% for senior roles, a nine-point gap GOV.UK - A snapshot of entry-level hiring in the UK.
There is a lesson in that gap. As routine code output gets automated, the roles that hold their value are the ones that call for judgement: framing the problem, weighing trade-offs, reviewing what a tool produces, and owning the outcome. That is where software hiring is growing up.
Hire for judgement, not just throughput. Ask someone to reason out loud about a real decision: why this approach over that one, what could break, how they would test it. Code you can generate. The thinking behind it is what you are really paying for, and it is what separates one strong hire from a busy one.
Widen where you look. Most new engineering hires come from the resident labour force, showing low reliance on international recruitment GOV.UK - Professionals in IT and engineering. And with adjacent sectors like defence hiring hard, surveyed recruitment there grew by 17.8% in 2022 Defence sector continues contributing significantly to UK economy - GOV.UK, strong software people have options. Move quickly and keep your process short.
Build as well as buy. The rise of apprenticeships in AI shows that growing talent works, especially for skills that are scarce on the open market. Pair a clear capability bar with a route in for people who can learn fast, and you widen your pool without lowering your standard.
Read the market honestly. With 2.5 unemployed people per vacancy ONS - Vacancies and jobs in the UK, you will see plenty of applicants, but plenty is not the same as fit. The job is to surface the right person fast, not to sift the most CVs.
This is where we help. We search a database of 15 million candidates and rank a shortlist in seconds, so you spend your time on judgement calls, not admin. We manage the process end to end, from matching and contacting people to booking interviews. Our recruitment agent manages recruitment end to end for 8% on a successful hire, with no monthly fee and no upfront cost. That keeps the focus where it belongs: finding the right person for the role. Ready to hire smarter? Start today with Reed.ai.
