The market is cautious but not flat. Across 2025, businesses took a careful approach to hiring against a subdued economic backdrop, yet clear demand hotspots stayed hot for specialist skills in AI, data, enterprise applications and cyber security Computer Weekly (tech recruitment outlook 2026). That pattern matches the wider picture: the UK labour market is best described as 'low hire, low fire', with weaker recruitment but only slight rises in redundancies, and vacancies sitting below pre-pandemic levels Low Pay Commission Report 2025, GOV.UK.
So demand hasn't disappeared. It has concentrated. Some technology roles remain in critical shortage: IT business analysts, architects and systems designers, a group of around 193,000 workers, show three of five indicators in critical demand in 2025 Occupations in demand 2025, Explore Education Statistics, GOV.UK. The question for employers is no longer whether to hire, but where the genuine scarcity sits.
The first shift is at the entry level, and it's sharp. The UK tech sector cut graduate jobs by 46% in the past year, with a further 53% drop projected The Register. That squeeze is broader than tech alone: UK entry-level job postings have fallen 30% 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% while senior hiring sits at -10%, a nine-percentage-point gap GOV.UK - A snapshot of entry-level hiring in the UK.
The second shift is the pull towards specialist AI skills. Demand for AI skills rose nearly 200% in a year, with London accounting for 80% of AI-related job postings and nearly two-thirds of all UK technology vacancies The Register (Accenture data). Alongside AI, cyber security keeps growing: the UK cyber workforce stands at roughly 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, and 70% of cyber firms still report at least one hard-to-fill vacancy AI Labour Market Survey 2025 (Gardiner & Theobald), GOV.UK / publishing.service.gov.uk.
The third shift is in how firms build these teams. Apprenticeships have climbed from 3% of AI hires in 2020 to 19% in 2025 GOV.UK / DSIT – AI Labour Market Survey 2025 report. And most technology and engineering hiring now draws on resident talent: for engineering professionals, the vast majority of new hires come from the resident labour force, showing low reliance on international recruitment GOV.UK - Professionals in IT and engineering. International routes still matter for the very top of the market, where leading firms pay well above salary thresholds for scarce skills Professionals in IT and Engineering (Migration Advisory Committee), GOV.UK / publishing.service.gov.uk.
Start by being precise about scarcity. Broad demand has softened, so treat generalist openings differently from the roles in genuine shortage, such as business analysts, architects, systems designers and cyber specialists Occupations in demand 2025, Explore Education Statistics, GOV.UK. For those, move quickly and keep your process short: hard-to-fill vacancies stay hard to fill AI Labour Market Survey 2025 (Gardiner & Theobald), GOV.UK / publishing.service.gov.uk.
Next, rethink the entry-level pipeline instead of abandoning it. With graduate routes contracting The Register, apprenticeships are now a real channel into AI teams GOV.UK / DSIT – AI Labour Market Survey 2025 report. Building talent this way protects you against future scarcity at senior levels. And because most tech hiring comes from the resident workforce GOV.UK - Professionals in IT and engineering, invest first in reaching UK-based skilled people well, then use international routes only for the roles where the market is thinnest.
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