This Week in Recruitment, 28 September 2026
UK hiring returns to growth, AI accountability gaps widen, and three compliance deadlines loom. Here is what agency owners need to know this week.
Permanent hiring has returned to positive territory in September, according to data brought together by The Global Recruiter from the KPMG and REC UK Report on Jobs and the S&P Global indices. That is the headline most agency owners have been waiting for. Temporary recruitment has maintained its momentum throughout, so the two sides of the market are, for once, pulling in the same direction. The mood, though, is cautious: a recovery is not a boom, and several forces this week serve as a useful corrective to any temptation towards optimism.
Below, we have grouped the week's most relevant stories by theme. Each one has something for you to take away.
Market conditions: recovery with caveats
The return of permanent hiring to growth is meaningful, particularly after a sustained period of employer hesitancy. Temp momentum continuing alongside it suggests underlying demand for flexible resourcing has not wavered, even when headcount decisions felt too risky to commit to.
Pay, however, is a different story. Brightmine, the HR data provider, reports that the median basic pay award for the three months to the end of August held at 3 per cent for the second consecutive rolling quarter. The forecast is that awards will remain around that level well into 2027. For recruiters placing permanent candidates, that subdued pay environment is likely to bear on counter-offer dynamics and candidate motivation in equal measure.
Takeaway for agency owners: A recovering market at flat pay growth is still a market worth working. Consider revisiting your client conversations around salary banding: the gap between what candidates expect and what clients will offer may be wider than either side realises.
The graduate pipeline is under real strain
Two stories this week land together to paint an uncomfortable picture of early-careers hiring. The Institute for Fiscal Studies finds that one in four graduates say they would choose not to go to university if they had the decision again. Separately, nine in ten young people aged 11 to 18 say they would consider an apprenticeship over a degree. The assumption that a degree is the obvious route to a good job is, quietly, collapsing.
The CIPD has responded ahead of the Milburn Review's final report on youth unemployment and inactivity by calling for an 'apprenticeship guarantee' to address the growing NEETs (young people not in education, employment or training) crisis. That is a structural policy ask, but it reflects a problem agencies are likely already seeing on the ground: a shrinking, increasingly disillusioned graduate pool.
A Scottish recruiter, C&P Recruitment, has meanwhile urged employers to reintroduce human judgement into their CV screening processes. The firm, which works across construction, property and engineering, argues that over-reliance on automated shortlisting is causing agencies to miss capable young candidates who lack the polished CVs that algorithmic filters reward. It is a fair point. A filter trained on yesterday's ideal candidate profile will always struggle to spot tomorrow's.
Takeaway for agency owners: If you specialise in early-careers or volume hiring, it may be worth reviewing whether your shortlisting criteria are still fit for purpose, and whether the talent you want is coming through the channels you have always assumed.
AI in hiring: the accountability gap widens
The conversation about artificial intelligence in recruitment has moved on from "should we use it?" to "who is responsible when it goes wrong?" The Global Recruiter this week explores what it calls the accountability gap: as AI takes on greater weight in hiring decisions, accountability for those decisions can become diffuse in ways that create real legal and reputational risk.
Personnel Today adds a sharper edge to this. Research cited this week finds that more than two-thirds of respondents believe under-represented graduates are at greater risk of being left behind as AI reshapes hiring processes. Lack of social capital (broadly, who you know and how you present) is identified as the biggest driver of job disadvantage for graduates from lower socioeconomic backgrounds. AI tools trained on historical hiring data can entrench those disadvantages rather than correct them.
None of this means AI in recruitment is a bad idea. It means the setup and configuration of any automated screening or matching tool deserves serious attention. A well-designed system, built on representative data and subject to human oversight at the right moments, can genuinely broaden access. A poorly configured one just automates the bias faster.
Takeaway for agency owners: If you are using or evaluating AI-assisted matching or CV screening tools, it is worth asking your supplier explicitly what the system was trained on, how it handles edge cases, and where a human remains in the loop.
Business operations: cashflow and the outsourcing question
Two pieces from The Global Recruiter this week speak directly to the operational pressures agency owners are managing. The first addresses cashflow: the argument, well made, is that winning new business means little if the money you have already earned arrives late. Late payments remain a structural problem for smaller agencies running on thin margins.
The second piece tackles outsourcing. The question of what back-office functions an agency should handle in-house versus hand off to a specialist is one that comes up repeatedly, especially as compliance obligations multiply. The piece makes a distinction worth holding on to: some functions (client relationships, candidate experience, cultural fit judgements) are too close to the agency's core value to outsource safely. Others (payroll processing, certain compliance checks) carry genuine efficiency gains when handled by specialists with dedicated infrastructure.
On the technology investment side, Spott, an AI-native ATS and CRM platform aimed at recruitment agencies, announced a $21 million Series A round led by Balderton Capital. It signals continued investor appetite for recruitment tech, even in a cautious market.
Takeaway for agency owners: Outsourcing is a strategic decision, not just a cost-cutting one. Before handing off any function, consider whether it touches something a client or candidate would notice if the quality slipped.
Compliance: three deadlines to act on now
This is the section to share with your ops team this week. Three employment law changes are at different stages of implementation, and each one requires action at agency level.
- Right-to-work checks, October 2026: Changes to right-to-work verification come into force next month. Personnel Today has published guidance from employment lawyer Rebecca Tester on what employers need to review. If you place workers and conduct checks on behalf of clients, the responsibility to stay compliant sits with you as much as with the end employer. Do not assume your current process still qualifies.
- Trade union statement requirement, 1 January 2027: The obligation for employers to provide workers with a written statement of their right to join a trade union has been pushed back to 1 January, Personnel Today reports. That gives agencies a little breathing room, but January will arrive faster than it feels right now.
- Bereavement leave, April 2027: New statutory bereavement leave rights are on the horizon for April 2027. Personnel Today has published early guidance on what employers need to prepare. For agencies managing large numbers of temporary or contract workers, embedding this into onboarding and payroll processes sooner rather than later is sensible.
Separately, Personnel Today reports that Glasgow City Council has moved to fire and rehire approximately 23,000 employees in an attempt to resolve a long-running equal pay dispute. Whatever one thinks of the approach, it is a reminder that workforce restructuring at scale carries enormous legal and reputational exposure. Agencies involved in public sector resourcing should stay alert.
Takeaway for agency owners: The October right-to-work changes are the most immediate. Review your compliance and candidate management processes this week, and consider whether your current tooling flags expiry dates and document gaps automatically or leaves that to human memory.
What to watch next week
The Milburn Review's final report on youth unemployment is expected imminently, and its recommendations are likely to shape apprenticeship and early-careers policy for years ahead. Agencies active in that space should read it closely when it lands. Meanwhile, October's right-to-work deadline makes next week a practical moment to check whether your recruitment software is doing the compliance heavy lifting it should be.
The market is recovering. The regulatory environment is tightening. The technology is getting more capable and more scrutinised at the same time. As recruiters, we have seen enough cycles to know that the agencies that use quieter weeks to get their house in order are the ones that make the most of busier ones. That is where we are right now.