Toby Day
Scotland’s professional labour market is gaining momentum in 2026. Vacancies are forecast to rise by 9.2% year on year, with hiring activity during the first seven months already exceeding 2025 levels. This performance is particularly encouraging against a backdrop of continued economic uncertainty.
Engineering and technology are key drivers of growth, supported by investment in renewable energy, infrastructure, artificial intelligence and digital capability. Demand is also increasing across the Industrials and Technology, Media and Telecommunications sectors. Major employers, including Iberdrola, BAE Systems and AECOM, are expanding recruitment as long-term investment programmes create new workforce requirements.
However, this growth is intensifying existing talent challenges. Skills shortages remain a significant constraint, particularly across engineering, infrastructure and technology, where employers are competing for increasingly specialised expertise. Developing the skills needed to support future investment will be critical to Scotland’s continued growth.
This latest report from APSCo and Vacancysoft offers valuable insight into the changing professional labour market across Scotland. It identifies the sectors, functions and employers driving recruitment, while highlighting the areas where skills pressures are likely to become increasingly significant.
The UK technology labour market is expected to strengthen in 2026, with vacancies for IT professionals forecast to rise by 20.4% year on year. Although Indeed reported an overall decline in UK job postings during the first half of the year, demand for artificial intelligence skills reached a record high. This indicates an increasingly selective labour market, with employers controlling overall headcount while continuing to invest in technology capabilities that improve productivity, automation and growth.
The continued growth in AI-related hiring should be a clear signal to employers and policymakers. The UK has a strong opportunity to build its position as a global technology leader, but this will depend on continued investment in skills, workforce development and effective talent attraction.
Recruiters will play an important role in helping businesses access the specialist expertise needed to adopt and scale emerging technologies.Progress on salary transparency is also encouraging, although further improvement is still needed. Greater openness around pay remains one of the most effective ways to attract talent in a highly competitive market.
While overall vacancy growth remains modest, the data shows a clear change in employer priorities. Demand for AI skills is rising quickly, while businesses continue to favour permanent hiring over more flexible workforce models.
Permanent roles accounted for 88% of all technology vacancies in Q2, increasing by 4.9% year-on-year. Contract and temporary hiring remained broadly flat annually and fell by 6.1% compared with the previous quarter.
AI-related vacancies were the strongest area of growth, rising by 23.7% quarter-on-quarter and 41.8% year-on-year. AI roles now represent 4.6% of all technology vacancies, compared with 3.4% a year earlier. Demand for Artificial Intelligence Engineers increased by 74.4%, with average salaries of £78,821, the highest among the leading technology roles analysed.
Permanent hiring remains steady but more deliberate. Pipeline constraints are playing a bigger role than demand itself, with fewer active candidates in the market. As a result, when businesses do hire, decisions are faster, more focused and centred on high-impact roles .
At a leadership level, demand continues to rise. Organisations are navigating increased complexity across AI adoption, regulation and growth strategy, which is driving sustained need for experienced C-suite and board-level talent to provide direction and execution .
Across all markets, one theme is consistent. Quality, speed and specialisation are now more important than volume. The ability to access and secure the right talent, quickly, is becoming a clear competitive advantage.
The market has entered 2026 in a more selective, but still active phase. Hiring demand hasn’t disappeared, it has sharpened. Businesses are focusing investment on areas that directly impact growth, efficiency and transformation, particularly across technology, data, product and commercial leadership.
Contract and freelance hiring continues to lead this shift. Organisations are increasingly prioritising flexibility, bringing in specialist talent to deliver defined outcomes across AI, digital transformation and revenue-driving initiatives. This is no longer a short-term fix, but a core part of workforce strategy .
Permanent hiring remains steady but more deliberate. Pipeline constraints are playing a bigger role than demand itself, with fewer active candidates in the market. As a result, when businesses do hire, decisions are faster, more focused and centred on high-impact roles .
At a leadership level, demand continues to rise. Organisations are navigating increased complexity across AI adoption, regulation and growth strategy, which is driving sustained need for experienced C-suite and board-level talent to provide direction and execution .
Across all markets, one theme is consistent. Quality, speed and specialisation are now more important than volume. The ability to access and secure the right talent, quickly, is becoming a clear competitive advantage.
"December’s slowdown was expected, but it highlights how differently the contract and permanent markets are behaving. Contract hiring continues to play a critical role as organisations prioritise flexibility and remain cautious about long-term commitments. In the current climate, flexibility has become a strategic requirement rather than a short-term fix.
Permanent hiring has softened at points, yet year-on-year stability shows confidence has not disappeared, it has simply become more selective. Strong conversion rates across both markets suggest that when decisions are made, they are decisive, with quality continuing to outweigh volume despite wider use of AI.
This sits within a broader backdrop where London remains resilient but is clearly at a turning point. Corporate confidence is under pressure, reflected in reduced hiring across professional services and tighter margins in sectors such as hospitality and retail. While London still leads the UK labour market, sustaining that position will depend on adaptability, productivity gains through technology, and a clear focus on quality execution rather than scale alone."
"December’s slowdown was expected, but it highlights how differently the contract and permanent markets are behaving. Contract hiring continues to play a critical role as organisations prioritise flexibility and remain cautious about long-term commitments. In the current climate, flexibility has become a strategic requirement rather than a short-term fix.
Permanent hiring has softened at points, yet year-on-year stability shows confidence has not disappeared, it has simply become more selective. Strong conversion rates across both markets suggest that when decisions are made, they are decisive, with quality continuing to outweigh volume despite wider use of AI.
This sits within a broader backdrop where London remains resilient but is clearly at a turning point. Corporate confidence is under pressure, reflected in reduced hiring across professional services and tighter margins in sectors such as hospitality and retail. While London still leads the UK labour market, sustaining that position will depend on adaptability, productivity gains through technology, and a clear focus on quality execution rather than scale alone."
