How 2025 Reshaped Work in the UK — And What HR Must Learn for 2026

2025 shaped the world of work in the UK in many ways, from a slowing labour market and legislative reforms to the impact of AI and shifting employee expectations. The year’s key trends show no signs of slowing down and will be the forces shaping work in 2026 and beyond.

Before we put the year behind us, it’s important to reflect on what those trends are and how leaders can get ahead of them in the year to come.

1. Hybrid work: From benefit to baseline normal

Hybrid work remains a hot topic, even six years on from the events of 2020, which brought it to the mainstream. In early 2025, 28% of UK workers were in hybrid arrangements, up from earlier pandemic years. No longer out of necessity, but because of preference. Companies requiring 100% onsite attendance without reasonable cause (such as security concerns or the nature of the work itself) are significantly less appealing, causing top talent to look elsewhere.

With global, remote-only companies hiring within the UK, job seekers have more flexible working options than ever before. The world of work in the UK has responded to the demand, with 91% of businesses offering some form of flexible working, whether through hybrid arrangements or flexitime. The question for 2025 will not be one of organisational adoption, but of accessibility.

Despite its broad uptake, hybrid options are more widely available for some groups than others, leading to equity challenges. An ONS survey in June revealed that hybrid options are used more by:

• Employees and full-time workers (versus contractors and part-time workers)
• Workers with a ‘degree or equivalent’ qualification
• Those in higher income bands
• Able-bodied workers
• Workers aged 30-49
• Workers in less deprived areas

Rather than making work more accessible for those facing financial or physical challenges, hybrid working options risk becoming a perk reserved for more privileged employees. Making hybrid and flexible work genuinely accessible across roles and demographics will be a key challenge for 2026.

Those with hybrid models in place should look at who benefits and why within their organization. If there are disparities between groups, what are the causes? Some may be logical, or come down to worker preference. For example, younger workers may be more likely to work from the office because they benefit from hands-on training or value social interaction, while older workers may prefer remote or hybrid work due to greater independence or increased responsibilities at home.

What’s important is not “should we offer flexibility?” but “are our flexible policies fair?” In 2026, offering flexible work arrangements where possible is the new normal. However, building an equitable world of work in the long term will require leaders to ask these questions of their hybrid models.

2. AI at work: From tentative adoption to real ROI

AI shifted from abstract potential to a real economic and labour market force. With nearly all UK jobs having some exposure to generative AI,

One interesting aspect of AI adoption in 2025 was that many employees found themselves growing impatient with their organisation’s speed, bringing their own AI tools to work rather than waiting for leadership to catch up. While this is a positive signal that the UK workforce is ready for the AI transformation, this shadow AI poses various risks. It forces organisations to accelerate their AI adoption efforts and to implement usage policies that safeguard ethics, compliance, and security.

For HR teams, this led to three significant challenges:

• Redesigning job roles to match emerging AI skillsets and requirements
• Adopting AI-driven HR tools to gain efficiency without sacrificing accuracy
• Facilitating training in AI skills and company policies

These will be ongoing trends for 2026 and will impact everything from workforce planning to performance management. HR teams can respond to the challenge by adopting a people-first approach to AI, leading by example with AI-assisted HR workflows, and advocating for effective AI skills development.

3. Labour market slowdown: Rethinking careers for the next generation

Unemployment in the UK rose to 5.1%, a four-year high, disproportionately impacting younger workers and prompting fresh concern about long-term economic inclusion. At the same time, AI is reshaping entry-level roles, automating the rote work previously handled by interns and graduates. Vacancies for graduate jobs, apprenticeships, internships, and junior jobs with no degree requirement in the UK have dropped 32% since November 2022 – correlating with the launch of ChatGPT.

Fewer opportunities for the next generation of workers today will translate to talent pipeline challenges in the future. Something the UK, still grappling with an ongoing skills shortage, can hardly afford. Eliminating entry-level positions as we know them is not the answer. Rather, organisations in the UK must rebuild early-career pipelines without relying on volume hiring.

This could look like bootcamp-style partnerships with colleges and universities, based on real-world skills and case studies with a focus on future-proof skills. Internally, AI can be used to create opportunities for early-career professionals, with AI-assisted L&D tools that facilitate leaner, more agile L&D strategies.

4. Employment rights reform: A new legal framework

Many of these changes (such as day-one flexible working rights and enhanced redundancy protections) are already in place, with others (such as the proposed Fair Work Agency and reforms to zero-hours contracts) due in 2026.

2025 was the year that employment law caught up with modern work realities, a trend employers can’t afford to ignore in 2026. The competition for top talent has gone global, meaning UK businesses can’t risk falling behind, losing talent to organisations that meet the new norms in flexibility and fairness. Both worker groups and businesses in 2026 will focus on outcomes that balance fair protections and economic confidence.

Lessons for 2026

These trends aren’t staying in 2025, and neither should our strategies and approaches towards recruitment and people management. When I reflect on the events of 2025, a few key lessons become clear:

• Flexibility is strategic. Not optional, but the new normal. Foundational for talent management.

• AI requires people-first execution. Organisational design must elevate human strengths, with AI designed to augment teams while relying on their judgment and oversight.

• Economic headwinds demand agility. Talent pipelines and youth opportunities need focused rebuilding. Early-career professionals should assist in building future-proof AI workflows and not be replaced by it.

• Law and rights reshape employer strategy: Compliance and foresight are competitive advantages, and contribute towards a more modern world of work in the UK. To keep up with the global competition for talent, this is non-negotiable.

At Deel we provide the tools you need to manage a modern workforce. Whether that means agile and simplified L&D, or IT that supports an ever-changing global workforce. If you’re looking for solutions to future-proof your workforce not just for 2026, but for all the years to come, book your 30-minute demo today.