HR Market Update – Q1 2025-26
As we close out the first quarter of the 2025-26 financial year, the HR recruitment landscape across Scotland, particularly within the Central Belt, continues to show signs of steady improvement. Online job postings rose by 23% in May 2025 compared to the previous year, reflecting a rebound in hiring intentions after a period of caution and cost-efficiency drives. While some businesses are still delaying permanent recruitment, there is a growing recognition that lean staffing models are unsustainable for long-term growth, and overall market sentiment is more optimistic.
Hiring Trends & Market Insights
- Businesses are demonstrating increased confidence in hiring, though cost control and operational efficiency remain key priorities. Structural reviews are underway across several sectors, including FMCG, in response to global economic pressures such as new American tariffs, directly influencing headcount planning and workforce strategies.
- Demand for interim HR professionals and fixed-term contractors remains steady. Organisations are using temporary staff to bridge gaps and maintain flexibility, though these roles are subject to closer scrutiny, with some contracts ending earlier than expected and extensions undergoing more rigorous review.
- There has been a notable increase in recruitment for specialist HR positions, particularly in projects, Learning & Development (L&D), and Reward. This reflects a strategic focus on upskilling, employee experience, and strengthening reward offerings. Over a fifth of employers have increased their training budgets to address skills shortages and invest in staff development.
- The market remains competitive, with employers needing to offer compelling packages that include flexibility, career progression, and hybrid working to attract and retain top HR talent. Salary growth continues, with 82% of Scottish employers increasing pay in the last year, often in response to the rising cost of living.
- Technology adoption is accelerating, with HR teams increasingly using AI, automation, and data analytics in recruitment and employee development. However, many organisations are still in the early stages of fully leveraging these tools, and demand is rising for HR professionals who can combine traditional expertise with digital skills.
Engagement & Insights
The Iconic team has seen a marked increase in client engagement throughout Q1, with more in-person meetings and strategic conversations reflecting greater momentum and intent in the market. We also hosted two separate roundtable events at our Glasgow office, bringing together a diverse group of business leaders to share perspectives on workforce challenges and opportunities. The discussion offered valuable insight into how organisations are adapting to change and planning for the future.
More of these to come across the remainder of the year! If you would like to be involved, just reach out!
Looking Ahead to Q2 2025-26
We expect to see more of the same steady hiring activity, with a degree of caution still shaping business decisions. Many organisations recognise that, for too long, their approach to HR has been largely reactive, responding to immediate needs rather than planning for the future.
There is now a growing acknowledgement that a more proactive, strategic mindset is essential, particularly as there are several significant employment law changes on the horizon that Scottish businesses need to prepare for. With these changes, there is a clear need for HR functions to become more proactive and strategic—reviewing policies, updating contracts, and ensuring compliance to future-proof both people operations and the wider business.