Hiring in 2026: Why UK Business Owners Are Anxious and How Smarter Recruitment Reduces Your HR Risk

This article is written by our HR recruitment specialist, Vic Foster, who works with UK SMEs navigating hiring decisions in a changing employment law landscape.

If you run a UK business, there is a particular worry starting to dominate 2026 planning. What if the wrong person is hired and managing them out later is no longer straightforward?

With employment law reforms progressing and further change expected through 2026 and 2027, many business owners are connecting the dots. Recruitment mistakes are becoming more expensive in time, money, and management bandwidth.

The smartest response is not more HR paperwork. It is stronger hiring decisions upfront, supported by an HR-led recruitment process designed to prevent problems later.

The real issue is not the law. It is hiring without a safety net

Most SME people problems follow the same pattern. The role is vague. Interviews become friendly conversations rather than structured assessments. References are rushed or skipped. Onboarding is light. Probation is poorly used. Then performance, attitude, or attendance issues appear. When the fit is wrong, output is not the only thing lost. Risk is inherited. Grievances, conflict, sickness absence, underperformance, and drawn-out exits quickly become management “projects”.

Legal change matters, but the bigger truth is simple. The best tribunal strategy is not hiring the problem in the first place.

Why hiring feels higher stakes in 2026

The Employment Rights Act 2025 received Royal Assent in December 2025 and signals a wider programme of reform, with measures expected to phase in over the next two years. Some changes already have clear implementation dates. ACAS has confirmed that dismissal for taking part in industrial action will become automatically unfair from 18 February 2026.

On the family leave side, neonatal leave and pay is already live for eligible parents of babies born on or after 6 April 2025, with updated ACAS guidance issued in January 2026.

Many businesses may never face industrial action or have needed to navigate neonatal leave yet. But the direction of travel is consistent. Handling people matters correctly is becoming more important, and hiring mistakes magnify every future HR challenge.

Recruitment fixes that reduce HR headaches fast

First, clarify the role properly. Define what success looks like in the first 30, 60, and 90 days. Be clear on non-negotiables and honest about pace and expectations. This prevents CV shopping and reduces the risk of technically strong but culturally misaligned hires.

Second, use structured interviews. Effective interviews are not informal chats. They are consistent assessments using competency-based questions, real workplace scenarios, and simple scoring. This improves decision-making and creates a clear rationale for hiring decisions.

Third, screen for reality, not confidence. A short pre-interview screen and practical check can quickly surface inflated experience, misaligned salary expectations, or weak motivation. This saves time and protects the shortlist.

Fourth, handle references and right-to-work checks properly and consistently. This is an area where many SMEs are exposed, often due to inconsistency or pressure to move quickly.

Fifth, manage the offer stage tightly to reduce dropouts. Candidate drop-off is usually caused by slow processes, unclear communication, or disorganisation. Clean offer management and decisive communication improve acceptance rates and reduce costly rehiring.

Sixth, treat probation as a managed process, not a calendar event. Set expectations early, run regular check-ins, document feedback, and intervene quickly. When probation is used properly, issues surface while there are still options.

How an HR-led recruitment approach reduces risk

Most recruitment focuses on filling a vacancy. An HR-led recruitment approach is designed to deliver the right hire and reduce people risk after they start. This includes role design and advert writing that attracts the right profiles, targeted sourcing rather than posting and hoping, structured interviewing and scoring, proactive candidate management to reduce dropouts, and compliant offer, reference, and right-to-work processes.

It also includes protecting the business post-hire, through practical probation and onboarding frameworks that managers can actually use. An HR lens means every hire is assessed against two questions. Will this person perform in the environment, and how can future risk be reduced if issues arise?

If you are hiring in 2026, ask this cost question

Before posting another role, it is worth considering what one wrong hire would cost over the next six months. Not just salary, but management time, customer impact, team morale, rehiring costs, and employee relations risk if the situation deteriorates. For most businesses, that number is high enough to justify doing recruitment properly.

Want support with your next hire?

For businesses hiring in 2026, an HR-led recruitment plan can reduce risk and lead to stronger, more confident hiring decisions. Sharing the role, location or remote setup, salary range, and any challenges with previous hires allows a tailored recruitment plan to be built, alongside a probation and onboarding approach that protects the business after the hire starts.

If gambling on hope hires no longer feels acceptable, a more structured approach is now essential.