The UK labour market may be turning a corner. Is Jersey following?

After a prolonged period of weak hiring, there are signs the UK labour market may finally be beginning to stabilise.

The latest KPMG and Recruitment & Employment Confederation (REC) UK Report on Jobs found that permanent staff appointments stabilised in July 2026, ending a 45-month period of decline. Temporary billings increased for a fourth consecutive month, while demand for temporary workers rose for the first time in two years.

However, it is not a broad-based recovery. Permanent vacancies are still falling and overall demand for workers remains in decline, although that drop is now the softest recorded for 22 months. Is Jersey following?

An island with high employment but limited growth

Jersey entered 2026 with employment at historically high levels, but with very little overall job growth.

In December 2025, Jersey recorded 64,680 jobs, the highest December total on record. But employment was only 120 jobs higher than a year earlier, an annual increase of just 0.2%. Private-sector employment increased by 0.1%, while public-sector employment increased by 0.7%.

More recent data points to continued cost pressures. Jersey's latest Average Earnings Index shows average weekly earnings increased by 4.1% between June 2025 and June 2026, while the June 2026 Business Tendency Survey recorded a strongly positive balance of +38 percentage points for labour costs.

There is an important caveat when comparing Jersey with the UK. The REC figures measure UK recruitment activity including placements, vacancies and temporary billings in July 2026. Jersey's comprehensive Labour Market report is published every six months, and the latest available figures currently cover December 2025 and primarily count jobs filled.

Shelley Kendrick, Managing Director, Kendrick Rose, a Jersey based recruiter, explains: “Recruitment activity can increase without total employment rising, particularly when employers are replacing departing staff rather than creating new roles, so this is not a like-for-like comparison. What the figures do show is a UK recruitment market beginning to stabilise after a prolonged downturn, alongside a Jersey economy maintaining high employment levels with limited net job creation.”

The talent challenge hasn't disappeared

One of the clearest similarities between the two markets is the challenge finding people with the right skills and experience.

In Jersey, 50% of businesses responding to Statistics Jersey's June 2026 Business Tendency Survey identified staff and/or skills shortages as a factor limiting their business, making it the most reported constraint.

In the UK, overall candidate availability has continued to rise, helped in part by redundancies and fewer job opportunities. Yet REC recruiters continue to report shortages of suitably skilled and experienced candidates for particular roles.

“A labour market can have more available candidates and still have a shortage of the right candidates. For employers looking for specialist knowledge, professional qualifications, leadership experience or scarce technical capabilities, the recruitment challenge may therefore remain intense even when the wider labour market appears stable.” Shelley said.

Jersey's finance sector remains relatively resilient, with both recent business activity and expectations for the following three months recording a positive balance of +24 percentage points in June. For employers competing for specialist and experienced professionals, finding the right people is therefore likely to remain a challenge.

Some sectors are under greater pressure

Headline employment figures also conceal considerable differences between Jersey's industries. The December 2025 Labour Market report recorded falling employment in hotels, restaurants and bars, as well as construction and quarrying, with declines partly offset by growth elsewhere in the private sector.

For some employers, however, the problem extends beyond finding candidates.

Shelley said: “For many employers in Jersey, the issues go beyond recruitment. Staff accommodation, cost pressures, workforce availability and changing operational models continue to create structural difficulties that cannot be solved simply by advertising more vacancies.”

Recruitment alone isn't the answer

If skills remain difficult to find, recruiting additional people cannot be the only response.

Shelley said: “Businesses that are still relying purely on recruitment to meet workforce needs may find themselves fighting an increasingly expensive battle. Attracting the right people remains critical, but organisations need to combine recruitment with a broader workforce strategy, with as much attention paid to development.”

For employers, that means focusing on:

• retaining and developing high-performing employees
• building skills and future leadership pipelines
• using technology and AI to improve productivity
• creating workplaces where people want to build their careers

The answer is not recruitment or development. It is about knowing when to hire, when to develop existing capability and where technology can enable people to be more productive.

Confidence is the next signal to watch

Jersey's latest business data suggest cautious optimism. Overall business activity was broadly neutral in June 2026, with a balance of +8 percentage points, while expectations for future activity were more positive at +23 percentage points.

But faith in future activity does not necessarily translate immediately into additional hiring. Shelley says this reflects what she is hearing directly from employers:

“Most employers I speak with are not pessimistic. Neither are they particularly bullish. They're somewhere in the middle. They are investing carefully, recruiting selectively, watching costs closely and planning for growth while remaining mindful of uncertainty. That feels less like a labour market in recovery and more like a labour market waiting for its next signal.”

Too early to say if Jersey is following the UK

The UK's recruitment market is showing tentative signs of stabilisation, but Jersey's latest comprehensive employment figures only run to December 2025. More recent Jersey business data points to persistent skills pressures, rising labour costs and cautious optimism rather than either a clear recovery or a downturn.

For employers, the more important question may be less about whether Jersey follows the UK's trajectory and more about how they prepare for what comes next.

Shelley said: “For Jersey employers, this is not the time for complacency. I believe that the organisations that will succeed over the next 12 to 24 months won't necessarily be those offering the highest salaries. They will be the businesses that create compelling cultures, invest in their people, embrace technology and give employees a reason to build their careers with them. Because in a labour market like this, talent isn't just a business asset. It's the competitive advantage.”