Employment news in brief - October 2026

Real Living Wage rises to £14.10 an hour

The Living Wage Foundation has announced a 4.8% rise in the real Living Wage, increasing the UK-wide rate from £13.45 to £14.10 an hour. In London, the rate will rise by 4.4% to £15.45 an hour.

Accredited Living Wage Employers have six months to introduce the new rates and must do so by 1 May 2027. Almost half a million workers are expected to benefit: a full-time employee will receive a pay rise of more than £1,250 a year.

Unlike the statutory National Living Wage, the real Living Wage is voluntary, independently calculated and applies to workers aged 18 and over. The 2026 to 2027 rates are the first to use a revised method combining the Minimum Income Standard with a poverty threshold based on household income after housing costs.

Nearly 17,000 employers, including half of the FTSE 100, are accredited Living Wage Employers. However, the Foundation says 4.4 million UK workers still earn less than the real Living Wage.

Government consults on employment status reform

The Department for Business, Innovation, Science and Trade (BIST) has launched a consultation about changing the employment status framework in England, Wales and Scotland.

The proposals aim to tackle bogus self-employment by:

• placing less emphasis on personal service when determining worker status
• improving compliance with the employment status framework, including through a presumption of worker status and enforcement measures; and
• strengthening protections for the self-employed, including through written statements, blacklisting protections and health and safety protections.

The consultation closes at 11.55 pm on 8 January 2027.

Government consults on whistleblowing reform and SFO reward scheme

The Department for Business, Innovation, Science and Trade (BIST) has launched a consultation on changes to the whistleblowing framework under the Employment Rights Act 1996 which looks at: 

• the scope of whistleblowing protection
• reporting routes
• employer policies; and 
• the support currently available to whistleblowers. 

It is also considering putting in place a financial reward scheme for people who report economic crime to the Serious Fraud Office (SFO).

The consultation closes at 11.59 pm on 8 January 2027.

Acas consults on revised flexible working Code

Acas has launched a consultation on an updated Code of Practice for statutory flexible working requests to reflect planned changes to flexible working law. 

Under the legislative changes, employers will need to consult with employees before refusing a flexible working request, show that a refusal is reasonable and explain their decision. The existing eight statutory business reasons for refusing a request aren't changing. 

The draft Code sets out a more structured approach to handling requests, with an emphasis on evidence-based decision-making, exploring alternatives where possible, and acting transparently and consistently. 

The consultation closes on 17 December 2026. 

The partnership with UKHospitality includes employers such as Whitbread, McDonald’s, Nando’s, Marriott, Burger King, Haven and Sodexo. Young people will also have access to work experience and training to help them build skills, confidence and improve their experience of work.

The announcement comes alongside plans to gather evidence on reforms to school exclusions. The Government noted that pupils who are persistently absent from school are 3.9 times more likely to become NEET. The proposed reforms aim to keep children engaged in education and help them return to school after suspension.

Critical thinking becomes key workforce priority as AI adoption grows

A global study by the IBM Institute for Business Value has raised concerns about AI’s effect on workforce skills. Some 60% of employees worry that AI is weakening their skills, with critical thinking the skill most often said to be declining.

The research involved 1,500 chief human resources officers (CHROs) and 8,800 employees. It found a clear gap between organisational and employee priorities. While 71% of CHROs said the ability to supervise, check and override AI outputs was the most important workforce skill, only 29% of employees ranked judgement as important.

The study also highlights concerns about who is accountable for the output. Some 43% of employees said they were blamed when something went wrong with AI. Meanwhile, 80% of CHROs said AI creates extra “invisible” work, including checking recommendations, correcting errors and managing exceptions.

Despite HR’s role in workforce change, 72% of organisations reported limited or no use of AI in HR, and nearly half do not involve the CHRO in developing their AI strategy.

Skills shortages continue to make vacancies hard to fill

Employers are still struggling to find workers with the skills they need. 

Skills England’s Annual skills report 2026 found that 27% of vacancies were hard to fill because of skills shortages in 2024. This was down from 36% in 2022 but remained above pre-pandemic levels. The report also found that 60% of priority occupations, including software developers, IT analysts and engineers, faced high recruitment demand in 2025. 

Employer investment in training has fallen sharply, with high costs and a difficult-to-navigate skills system discouraging businesses, particularly smaller employers, from investing in workforce development.

The report suggests a range of measures which would help to make training easier to access. This includes providing shorter and more flexible courses focused on specific skills needs.

UK employers stretch salary budgets to secure specialist skills

Specialist skills continue to give job candidates the upper hand, with many employers prepared to stretch salary budgets to secure the talent they need. 

Robert Half’s 2027 UK Salary Guide found that four in ten hiring managers have exceeded their salary budgets for new recruits, particularly where candidates bring specialist expertise or generative AI skills. And despite wider cost pressures, more than half expect pay budgets to increase in 2027. 

Employers are also placing greater emphasis on pay transparency, with many reporting that greater openness about pay has improved the quality of candidates applying for roles. 

The strongest growth in starting salaries is expected for qualified financial accountants, ERP functional consultants and talent acquisition partners.

UK job adverts receive median of 31 applications

UK job adverts receive a median of 31 applications, according to TalentFinder UK’s Job Advert Response Benchmark. 

Demand varied sharply by sector. IT and technology roles received a median of 74 applications, while legal, engineering and financial services vacancies attracted far fewer. 

Lower-paid roles also generated significantly more interest than higher-paid positions, highlighting the very different recruitment challenges facing employers across the jobs market.

The figures are based only on TalentFinder UK’s adverts, not the whole UK jobs market. They therefore provide a recruitment benchmark rather than a national average.

Employees are being asked to cope with an unprecedented pace of workplace change

Employees are dealing with a faster pace of workplace change. Deloitte’s 2026 Global Human Capital Trends study found that a third of employees experienced more than 15 major workplace changes in the last year. Many reported rising workloads, lower engagement and a decline in wellbeing linked to their ability to cope with constant change.