The UK labour market is changing. Vacancies have fallen, unemployment has increased compared with a year ago, and some employers are receiving more applications for advertised roles.

That may sound like hiring should now be easier. In practice, a larger candidate pool does not automatically produce better applicants or quicker decisions.

For UK SMEs, the challenge in 2026 is to manage higher application volumes, keep salary decisions realistic and avoid spending more than necessary on recruitment.

What is happening in the UK labour market?

The latest available figures from the Office for National Statistics show that the labour market has become less tight.

UK unemployment was estimated at 5.0% in January to March 2026, while the number of vacancies fell compared with the previous year. There were also more unemployed people available for each advertised vacancy.

This means some employers may receive more applications than they did when candidate shortages were at their most severe.

However, conditions vary considerably by:

• Industry
• Location
• Salary
• Working arrangements
• Required qualifications
• Level of experience

Skilled candidates can still be difficult to attract, particularly in engineering, healthcare, manufacturing, technical sales and other specialist areas.

More candidates does not always mean better candidates

A rise in application numbers can create the impression that a recruitment campaign is performing well.

The more useful question is how many applicants genuinely meet the requirements.

Employers may receive applications from people who:

• Have not read the full advert
• Do not have the essential experience
• Cannot work the stated hours
• Live too far from the workplace
• Have different salary expectations
• Are applying broadly following redundancy
• Need significant retraining

A crowded inbox can therefore increase recruitment administration without producing a stronger shortlist.

Clear job adverts and structured screening are essential when candidate volume rises.

Keep salary decisions realistic

A softer labour market does not mean employers can automatically reduce salaries.

Candidates with valuable technical skills, qualifications or sector experience may still have several options. Existing employees may also notice when new vacancies are advertised below realistic market rates.

Before setting a salary:

• Review comparable local vacancies
• Consider the skills genuinely required
• Check whether the role is difficult to reach
• Account for shifts, travel and overtime
• Review internal pay consistency
• Be clear about benefits and progression

Advertising an unrealistically low salary may produce more applications, but not necessarily from people capable of doing the job.

Make job adverts more specific

When more people are searching for work, vague adverts can attract a large number of unsuitable applications.

A strong advert should clearly explain:

• Salary or hourly rate
• Location
• Working hours or shift pattern
• Main responsibilities
• Essential experience
• Qualifications or licences
• Benefits
• Training available
• Application process

Separate essential criteria from skills that can be taught.

This gives suitable candidates the confidence to apply while helping others recognise when the vacancy is not right for them.

Review applications regularly

Strong candidates may still move quickly, even when unemployment is higher.

Waiting until the closing date to review every application can mean the best people have already interviewed elsewhere.

Employers should:

• Review applications throughout the campaign
• Identify clear mismatches promptly
• Contact strong candidates quickly
• Use short screening calls where appropriate
• Reserve interview time in advance
• Set deadlines for decisions
• Keep candidates updated

The aim is not to rush the appointment. It is to remove avoidable gaps between each stage.

Use screening to manage application volume

A structured screening process can help employers distinguish between application volume and genuine suitability.

Begin by checking:

• Essential experience
• Required qualifications
• Location and travel
• Working hours
• Salary expectations
• Notice period
• Right to work
• Interest in the role

A short telephone screening call can then clarify information that is missing from the CV.

Using the same core criteria for each applicant supports a fairer process and gives hiring managers a more focused shortlist.

Keep recruitment costs predictable

Traditional recruitment agencies often charge a fee linked to the successful candidate’s salary.

For SMEs, this can make recruitment costs harder to predict, particularly when several vacancies are being filled.

Flat-fee recruitment advertising provides an alternative. Employers pay an agreed amount for advertising and any included support rather than a percentage-based placement fee.

Depending on the package, support may include:

• Professional job advert writing
• Advertising across leading UK job boards
• Application management
• CV screening
• Telephone screening
• Candidate communication
• Shortlist preparation

A fixed-fee approach does not guarantee a successful appointment, but it gives employers clearer control over the cost of reaching and managing applicants.

Frequently asked questions

Does higher unemployment make recruitment easier?

It can increase candidate availability, but the impact varies by role and sector. Specialist skills may remain difficult to find, and a larger applicant pool may create more screening work. The Office for National Statistics publishes monthly information on UK employment, unemployment and vacancies.

Link “monthly information on UK employment, unemployment and vacancies” to the latest ONS labour market overview.

Should employers reduce salaries when more candidates are available?

Not automatically. Salaries should reflect the skills required, local market conditions, internal pay levels and the overall employment package. Skilled candidates may still have several opportunities despite a wider slowdown.

How can employers handle more applications?

Use a clear advert, agree the essential criteria in advance and review applications regularly. Structured CV screening and short telephone calls can help employers identify the strongest candidates without interviewing everyone.

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Frequently asked questions

Does higher unemployment make recruitment easier?

It can increase the number of people looking for work, but it does not guarantee more suitable applicants. Specialist skills, qualifications and local labour shortages may still make some roles difficult to fill. The Office for National Statistics publishes the latest data on UK employment, unemployment and vacancies.

Should employers reduce salaries when more candidates are available?

Not automatically. Pay should reflect the skills required, local competition, internal salary levels and the overall employment package. A wider candidate pool does not remove shortages in technical, regulated or specialist roles. Employers can use the ONS earnings data to monitor wider UK pay trends.

How can employers manage a rise in applications?

Use a clear advert, agree essential criteria before advertising and review applications regularly. Structured CV screening and short telephone calls can help identify the strongest candidates without interviewing everyone. Acas provides guidance on assessing applicants fairly and consistently.