A practical look at the market forces set to shape hiring decisions across UK and Europe
When you start hiring in 2026, the picture across UK and European STEM industries is clear: skills remain tight where roles are critical, regulation is ramping up, and employers are expected to do more with less – while still offering a better candidate experience and a stronger overall offer.
The latest Office for National Statistics (ONS) figures show that the UK still has a large number of unfilled roles: in August to October 2025 there were around 723,000 vacancies, down from the 2022 peak of 1.3 million but still well above pre-pandemic levels, although nothing at time of writing is available on STEM specific skills.Against that backdrop, analysis in Cambridge Industrial Innovation Policy’s UK Innovation Report 2024 found that as recently as late 2023 the UK had 934,000 vacancies, with 46% of them in STEM-intensive sectors such as human health, professional scientific and technical activities, manufacturing, education and ICT (last reported numbers).
Engineering-specific data underlines the point. The IET’s 2025 skills stats report that 76% of engineering and technology employers are struggling to recruit for key roles, with automation, cyber security and data skills in particularly short supply. Industry analyses drawing on ONS data suggest there were over 170,000 open engineering and technology roles in early 2025, with around 73% of engineering businesses saying they cannot find people with the right technical skills.
Put bluntly: STEM skills shortages are structural, not temporary – and 2026 hiring strategies need to reflect that.
Trend 1: Structural STEM Skills Shortages – Plan For Scarcity, Not Relief
Across manufacturing and industrial sectors, the skills gap is no longer a “blip”. Shortages in technical, scientific and engineering roles are now embedded in the system.
The UK Innovation Report 2024 confirms that despite producing a high proportion of STEM graduates, the UK has persistent, STEM-related skills gaps, particularly in engineering, manufacturing and construction. Engineering and technology graduates make up a relatively small share of the total, and many move into non-engineering roles, while employers report particular difficulty finding people with scientific, production or technology and advanced digital skills.
In chemicals and materials, a 2025 joint report by IChemE, IOM3 and the Royal Society of Chemistry warns that skills shortages in process engineering, materials science and circular-economy-related disciplines risk slowing progress towards net zero and a more resource-efficient economy.
What does this mean for hiring in 2026?
Assume key roles (R&D, process, EHS, regulatory, automation, scale-up, QC/QA) will stay hard to fill so build longer lead times into workforce plans.
Invest more in mid-level and “grow-your-own” talent; stop expecting the market to supply ready-made senior specialists on demand.
Use salary and market mapping early, not when an offer gets rejected. This is particularly applicable in London and the UK’s Southeast region, as well as DACH, Benelux and Swiss hubs.
Strengthen your internal mobility and development pathways; retention will beat replacement on cost, risk, and speed.
Trend 2: AI-Powered Recruitment Under Tightening Rules
AI is now baked into recruitment, from CV screening and matching to scheduling and candidate communication and 2026 is when regulation really bites.
The EU AI Act – the world’s first comprehensive AI law – entered into force on 1 August 2024 and will be fully applicable from 2 August 2026, with some rules coming in earlier. AI systems used in employment decisions, including recruitment and selection, are classified as “high-risk”, subject to strict obligations around transparency, data quality, human oversight and record-keeping.
Recent guidance aimed at UK businesses selling or deploying AI in the EU is clear: if you are using AI-enabled tools, for example in CV screening or automated shortlisting, for EU roles or candidates, you will be treated as part of that high-risk ecosystem and expected to comply.
In parallel, UK regulators such as the Information Commissioner’s Office (ICO) and the Competition and Markets Authority (CMA), the UK’s competition and consumer regulator, are sharpening their focus on algorithmic decision-making, bias and explainability in HR and recruitment contexts, even without an AI Act of their own.
What does this mean for hiring in 2026?
Expect more questions from candidates (and internal stakeholders) about how you use AI in hiring and be ready with clear, simple answers.
Review your Applicant Tracking System, assessment tools and any AI-enabled tech for EU AI Act alignment if you are recruiting in or from the EU. Do not assume your system vendor has fully handled it.
Keep humans firmly in the loop, especially for scientific, technical and leadership roles where nuance, context and potential are critical.
Work with recruiters who can blend smart tools with sector expertise, rather than relying on automated keyword matching in already-tight talent pools.
Trend 3: Immigration Headwinds and Salary Thresholds Tighten the Screws
For years, UK and European employers have relied on international talent, particularly highly skilled scientists, engineers and commercial specialists. That route is getting more complex and more expensive.
In the UK, the old Shortage Occupation List was formally withdrawn in 2024 and replaced by the Immigration Salary List (ISL). The Migration Advisory Committee’s rapid review recommended that only 21 occupations should be included on the ISL – around 8% of all roles eligible for the Skilled Worker route, down from roughly 30% under the previous regime. Combined with higher Skilled Worker salary thresholds, that makes it harder and costlier to use sponsorship as a safety valve for skills gaps.
There is also a wider political drive in the UK and across parts of Europe to reduce net migration, adding another layer of uncertainty for employers who have historically plugged gaps with overseas hires.
What does this mean for hiring in 2026?
Build contingency plans that do not rely solely on overseas hires for critical roles.
Expect higher salary expectations for niche roles that still qualify for sponsorship and budget accordingly.
Sharpen your value proposition for international candidates: relocation support, family support, long-term progression and clarity on visa strategy.
Use specialist recruiters who understand which roles realistically qualify for sponsorship and where you will face the most friction.
Trend 4: Sustainability & Circular Economy Skills Move Centre Stage
Climate, net zero and circular-economy commitments are no longer side projects in chemicals, materials and life sciences – they are increasingly central to business models, investment decisions and product portfolios.
The UK Innovation Report 2024 and subsequent net-zero reviews show that the UK’s net-zero economy grew around 9% in 2023, far outpacing overall GDP growth, and is supporting hundreds of thousands of jobs with salaries above the national average.
At the same time, a new 2025 joint report from IChemE, IOM3 and the Royal Society of Chemistry, “Jobs and skills for a circular economy”, warns that skills shortages in key areas, including green process design, resource efficiency, recycling, advanced materials and sustainable product design, threaten to slow circular-economy progress unless the workforce is rapidly upskilled. Global analysis of the chemical industry also highlights the sector’s heavy reliance on fossil feedstocks and the scale of the net-zero challenge, even as leading companies pilot low-carbon and circular solutions.
What does this mean for hiring in 2026?
Many traditional roles now need embedded sustainability capability, for example, process engineers who understand energy efficiency, recycling, low-carbon design and new feedstocks.
Job descriptions that ignore sustainability will increasingly look outdated to high-calibre candidates, investors and regulators.
Cross-functional profiles, technical plus regulatory plus Environmental, Social, and Governance, will be in particularly short supply; expect to compromise on the “perfect mix” and train the rest.
When you brief roles, make the sustainability story explicit: how this hire contributes to greener processes, safer products or more sustainable supply chains.
Trend 5: Cautious Growth and More Flexible Talent Models
Global staffing data suggests that while the UK remains one of Europe’s largest recruitment markets, growth is modest and uneven by country and sector.
The World Employment Confederation’s Economic Report 2025 shows that in 2023 agency work activity declined globally, with Europe and North America particularly challenged, and early-2024 trends showed ongoing difficulties in these regions, in contrast to continued growth in Asia and South America.
Closer to home, UK labour-market surveys such as the REC/KPMG Report on Jobs show that through late 2025 permanent hiring slowed, temporary billings contracted and candidate availability rose, as businesses delayed decisions amid higher employment costs and economic uncertainty.
In chemicals and manufacturing, sector reports paint a mixed picture: some businesses see solid order books in key product lines, but many still anticipate job cuts or hiring freezes in non-critical functions due to margin pressure, high energy costs and regulatory burdens.
Put simply: headcount growth is happening, but it’s selective. Businesses are comfortable hiring where roles are clearly revenue-generating or strategically critical; elsewhere, they are leaning harder on fixed-term, interim and project-based talent.
What does this mean for hiring in 2026?
Expect more business cases and sign-off steps for each permanent hire so you will need stronger evidence of impact.
Interim, contract and project-based roles will stay attractive where you need specialist expertise but cannot justify permanent headcount.
Candidates, especially senior technical and leadership profiles, are increasingly open to portfolio careers; use that flexibility to your advantage.
Build talent pipelines for evergreen roles (QC chemists, formulation scientists, sales and technical service, regulatory) so you are not starting from zero each time.
Trend 6: Candidates Expect a Stronger Offer Beyond Salary
In tight STEM markets, salary gets you noticed by candidates, but it rarely wins the race on its own.
The 2025 Randstad Workmonitor finds that, for the first time in its 22-year history, work–life balance now ranks above pay as the top priority worldwide, with employees also looking for personal growth, a sense of community and future-ready skills.
LinkedIn’s Global Talent Trends 2024 report echoes this: flexibility, career development, purpose and culture are now central to how candidates judge offers, particularly in knowledge- and STEM-intensive fields. Deloitte’s 2024 Global Human Capital Trends adds that organisations focusing on “human sustainability” – long-term worker wellbeing and growth, not just short-term productivity – tend to outperform peers.
For specialists across chemicals, life sciences, polymers, coatings and personal care, the questions sound like this:
What will I learn here and how quickly can I grow in my role?
Where can I go next inside this organisation – technically, commercially or into leadership?
How flexible is this role in reality, not just on paper?
How does this work contribute to safer, more sustainable products, processes and materials for customers and end-users?
What is the real culture in this team – and who will I be working with day to day?
What does this mean for hiring in 2026?
If your employee value proposition has not been refreshed since pre-pandemic, it will feel tired and unappealing, especially to candidates in their 20s to 40s.
Be specific in job adverts and interviews: what they will learn, where they can go, who they will be working with.
Do not oversell flexibility you cannot deliver as mismatched expectations are fueling early attrition.
Use recruitment partners who can pressure-test your Employee Value Proposition (EVP) with the market and give you honest feedback.
Practical Ways to Prepare Now
In summary, 2026 is not going to be an easy hiring year – but with better planning and sharper positioning, you can put your organisation ahead in the competition for talent.
Workforce planning for critical roles, so consider mapping likely retirements, growth areas and high-risk skills gaps over 12 to 24 months.
Market and salary insight so you have a clear understanding where you will need to move on pay, flexibility or location to stay competitive.
Role and EVP refinement is going to be key. Rewriting job briefs and adverts so they reflect current market expectations and your sustainability, development and culture story.
Talent pipeline building, especially for recurring roles and bottleneck skills where you always seem to be hiring in a rush.
Compliant, high-touch hiring by blending smart tools with experienced, sector-specific consultants who know the science and the people.