Our Spring/Summer 2026 Hiring Trends Update highlights a labour market that remains active but increasingly selective. Employers continue to hire, candidates continue to seek opportunities, and organisations are adapting to a rapidly changing environment. However, these hiring trends do not exist in isolation.
In this accompanying commentary, economist Richard Ramsey explores the wider economic backdrop shaping employer and employee behaviour across Northern Ireland. While the region has outperformed many parts of the UK in recent years, signs of slowing momentum are emerging. Rising business costs, renewed inflationary pressures, geopolitical uncertainty, and the accelerating impact of technology are creating fresh challenges for organisations and workers alike.
Ramsey examines how these economic forces are influencing confidence, recruitment decisions, workforce mobility, and skills development. His analysis reinforces many of the themes identified throughout this report: a growing sense of caution, a need for adaptation, and an increasing focus on productivity, resilience, and future-ready skills.
Together, the findings from our survey and Richard’s economic perspective provide a comprehensive picture of a labour market that remains resilient under pressure but is entering a new sense of adjustment. Understanding these wider forces will be critical for employers and employees as they navigate the opportunities and challenges that lie ahead.
Loss of Momentum
Over the last 12 months, a key theme in recent surveys has been Northern Ireland’s economic outperformance relative to the UK. However, there are signs that this outperformance is waning with loss of momentum noted.
Northern Ireland’s Composite Economic Index (NICEI), a proxy for GDP economic growth, outperformed the UK economy in Q4 2025. However, the 0.2% quarter-on-quarter growth rate was modest and was largely driven by the public sector. Revisions to earlier data revealed that the NI economy wasn’t growing as fast as previously thought in 2025 with the private services sector posting its second successive quarter of decline in Q4 2025.
NISRA’s Quarterly Employment Survey also revealed that private sector fell, albeit modestly, for the second consecutive quarter in Q4 2025. Despite the loss of momentum within the private sector, Northern Ireland still recorded a new record high (843,860) in the number of employee jobs in December 2025. That represented a rise of +0.3% over the quarter and an increase of +1.3% over the year (+11,120 jobs). But that could represent a highwater mark.
More recent HMRC payrolls data revealed that the number of NI employees fell modestly for the second successive month in April. Despite this decline, NI remained the only UK region to post year-on-year growth in employment (NI = +1.0% y/y versus -0.7% y/y for the UK). NI’s median pay growth has also slowed with the region posting the lowest annual increase of the 12 UK regions in the year to April 2026 (NI = +3.2% y/y versus +4.9% y/y for the UK).
Confidence slipping & cost pressures rising
The conflict in the Middle-East and the closing of the Strait of Hormuz will have an adverse impact on economic activity throughout 2026 and beyond. Rising energy/input costs, supply chain disruption and increased uncertainty have been the main impacts so far. Local households have already seen the price of home heating oil more than double within the space of a few weeks. Prices of home heating oil, petrol and diesel have eased from their recent price spikes but remain significantly above pre-Iran War levels. Food price inflation is expected to pick-up in the coming months and alongside the rise in energy prices will fuel a new leg in the cost-of-living crisis.
Ulster Bank’s Northern Ireland Growth Tracker, signalled that business activity was flat in April with a sharp decline in export orders. Private sector forms also reduced their staffing levels. However, the most notable deterioration in business conditions concerned input costs and business sentiment during March and April. Input cost inflation (e.g. labour & energy costs) accelerated sharply while confidence in business activity in 12 months’ time deteriorated markedly. In time, this will feed through to the labour market.
Uncertainty-Squared
Uncertainty has been an omnipresent theme over the last 18 months not least within the sphere of geopolitics. Trump’s tariff-induced uncertainty last year has been replaced with disruption flowing from the ongoing conflict in the Middle-East.
Political uncertainty is pervasive in Westminster. Meanwhile, hope of Stormont delivering a multi-year budget have all but evaporated casting doubt over the local public finances.
Uncertainty has become increasingly evident within the labour market too. Two-thirds of employees are more cautious about changing jobs because of uncertainty in the market. The corresponding proportions for Ireland and the UK are 73% and 76% respectively.
This new period of caution follows “The Great Resignation” that came after the Covid-19 lockdown induced disruption. According to Sarah O’Connor of The Financial Times, the global labour market is entering a new phase dubbed “The Great Hunkering Down.” Economic instability, geopolitical tensions and the threat of AI-induced job losses are perhaps giving rise to an ‘any post/job in a storm’ mindset.
I can’t get no… (job) satisfaction
Northern Ireland may compare favourably with the UK across a number of labour market statistics. However, the Hiring Trends Update survey of employees and employers highlights some areas where NI compares less favourably with elsewhere. NI employees are less satisfied with their current employer than their UK and Irish counterparts. In both the UK and Ireland, 88% of employees are satisfied with their current employer whereas only 68% of NI employees are satisfied. As a result, the NI workforce appears to be more restless than elsewhere with two-thirds of workers surveyed actively looking for a new job. This compares with fewer than 1 in 5 for the UK and Ireland.
Squeeze Here
For many, the cost-of-living squeeze could mean hunkering down is simply not an option as inflation outpaces wage growth. Instead, the pursuit of better paid employment and working conditions will continue. Salary (53%), Work-life balance (46%) and flexible working (28%) remain the most decision factors when choosing a new job or employer.
The cost-of-doing business squeeze has also intensified. Employers have been levied with sizable labour costs in recent years. These include a series of inflation busting National Living Wage (NLW) increases and a rise in Employers’ National Insurance Contributions. Employers are adapting to this increased cost base in a number of ways. Some 42% of employers have reduced their planned headcount in Q2/Q3 2026 due to the NLW increase. Meanwhile, almost 4 in 10 employers have reduced the number of entry-level roles due to the increase in the NLW. This trend is echoed by Lord Wolfson, the CEO of Next, who recently warned that there has been a dramatic fall in the number of entry-level job opportunities in the UK. This has resulted in a doubling of the number of applicants per job at the retailer.
The Great Adaptation & FOBO
The Northern Ireland economy has endured a prolonged period of tight labour market conditions, where the demand for labour significantly exceeds the supply. For close to 1 in 3 employers, finding the right candidate with the right skills was the biggest challenge to hiring in the six months to March 2026.
Normally under such conditions, one would expect the balance of power to lie with employees rather than employers. According to the Hiring Trends Update, the vast majority of jobseekers are finding the current market harder to get invited for interview and job ads seem to be asking for more skills and experience compared with three years ago. A similar trend is evident within both the UK and Ireland.
A surge in labour costs coupled with rapid developments in technology, such as automation and AI, has shifted the balance away from employees.
“Fear of Becoming Obsolete”, or FOBO, is growing workplace anxiety about being replaced or rendered irrelevant by technology. Some 35% of employees surveyed in NI were worried that their role could become obsolete in the next few years due to AI and automation. This compares with 41% and 42% for Ireland and the UK. Meanwhile almost two-thirds of employees in Germany have a fear of becoming obsolete.
It is noted that technology has already been responsible for making some jobs in Northern Ireland obsolete. Over the 6-year period from Q4 2019 (pre-pandemic) to Q4 2025, four employment categories have reduced their overall staffing levels. Two of these Financial & insurance activities (-550 jobs); and Administrative & support services activities (-2,070 jobs) have undoubtedly used technology such as chatbots to cut headcount.
For two-thirds of NI employees, the primary reason for learning new skills is to remain employable for the future. FOBO has led to an increased update of digital and AI skills by employees. Over one-third of employees have learned to use AI tools over the last 12 months.
AI & technology isn’t all bad for employment
Media headlines invariably focus on the role of AI/technology in triggering job losses. Bill Winters, CEO of Standard Chartered bank, made headlines when he referred to some 7,800 back-office roles being replaced by AI as “lower-value human capital”.
However, technology is also a source of significant employment growth. New roles and opportunities are continually being created. The Hiring Trends Update highlights that 22% of employers surveyed are increasing hiring demand for cybersecurity while 19% of respondents are increasing the number of roles in AI and machine learning.
Outlook
Looking to the year ahead, the majority of job losses will not be due to AI or technology. Instead, they are likely to be due to broader economic forces such as increased cost pressure and lack of competitiveness stemming from the cost-of-living and cost-of-doing business crises. The difficulties facing the hospitality sector, which has lost 1,100 jobs over the year to April 2026, is a case in point. The reality of tax rises and increases in the NLW are simply catching in the Middle East will test the resilience of employers and employees alike. The labour market, like elsewhere, faces uncertain times. This uncertainty is likely to lead to slower hiring as employers pause recruitment/investment.
“The Great Hunkering Down” beckons.