The picture is cautious at the entry end and tight at the top. In engineering, entry-level hiring has fallen to -19% while senior hiring sits at -10%, a 9-percentage-point gap, according to a 2026 GOV.UK snapshot of entry-level hiring. The squeeze is sharpest for people just starting out.
Graduate routes have thinned even faster. The UK tech sector cut graduate jobs by 46 percent in the past year, with a further 53 percent drop projected, reports The Register, citing Institute of Student Employers figures. Entry-level postings are feeling it too: Adzuna has seen a 30% drop in UK entry-level job postings since ChatGPT's launch, with graduates facing the toughest job market since 2018, as techUK notes.
Yet employers still can't fill the roles they need. 76% of engineering employers struggle to recruit for key roles, with technical and specialist sustainability skills topping the list, the Institution of Engineering and Technology found in 2025. Fewer openings, and still hard to fill: that's the tension defining the market today.
Demand has concentrated around specialist skills rather than spreading evenly. Against a subdued 2025 economic backdrop, businesses took a cautious approach to hiring but there were demand hotspots for specialist tech skills including AI, data, enterprise applications and cyber security, Computer Weekly reported in its 2026 tech recruitment outlook.
AI sits at the centre of that shift. Demand for AI skills increased nearly 200 percent in a year, with London accounting for 80 percent of AI-related job postings and nearly two-thirds of all technology vacancies in the UK, The Register reported, citing Accenture data. The longer view is just as striking: for the total of AI-related occupations, the net change ranges from approximately 696,000 jobs in the Automation Scenario to 1,072,000 in the Technological Opportunities Scenario, with replacement demand rising from 3,077,000 to 3,193,000 jobs across these scenarios, per GOV.UK labour market and skills projections.
How people enter engineering is changing too. Apprenticeships have risen from 3% of AI hires in 2020 to 19% in 2025, according to the GOV.UK AI Labour Market Survey 2025. And the people you want to hire are moving: 79% of UK technical professionals plan to change employers in 2026, found Rise Technical's 2025/26 Insights Report, surveying over 500 employers and 1000 candidates. The talent is in motion, which is both the risk and the opportunity.
Start by redefining the job. When AI handles much of the keystroke work, the value a software engineer adds is judgement: choosing the right approach, spotting what the generated code gets wrong, and understanding the problem behind the request. Write your role around those outcomes, not a list of languages.
Assess for reasoning, not recall. Ask people to review and improve AI-written code, explain a trade-off, or walk through a real decision they changed their mind on. You learn far more from how someone thinks than from whether they can reproduce syntax from memory.
Then widen the door. With graduate and entry-level routes shrinking, apprenticeships and non-traditional backgrounds are a growing source of strong people, and the rise in apprentice AI hires shows it works at scale according to the GOV.UK AI Labour Market Survey 2025. Prioritise people who learn quickly, because the tools will keep changing.
Finally, move fast. With most technical professionals open to a move in 2026 per Rise Technical's 2025/26 Insights Report, the employers who respond quickly and keep the process clear win the people worth hiring. A slow process loses good engineers to a faster one.
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