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Attracting and keeping qualified staff remains the biggest concern for UK employers heading into 2026, according to new research by HR software provider Ciphr.
The survey of 300 HR decision-makers found that29 per centconsidered recruitment the top challenge they expect to face over the next 12 months, closely followed by retention (28 per cent). . Other major concerns include rising costs and budget pressures (27 per cent), meeting hybrid working expectations (26 per cent) and managing the ethical use of AI (25 per cent).
One in four respondents also anticipate difficulties in meeting employee pay expectations amid ongoing cost-of-living pressures, while the same proportion cited the upcoming Employment Rights Bill as a significant compliance challenge.
The findings suggest that HR leaders are navigating a complex mix of people and operational pressures, with wellbeing, inclusion and work-life balance all high on the agenda. Nearly a quarter said they expect challenges in providing employees with regular training, maintaining good work-life balance, and creating an inclusive workplace culture.
Claire Hawes, Chief People and Operations Officer at Ciphr, said the results show just how finely balanced HR priorities have become:
“Although recruitment and retention continue to make headlines, HR leaders have many other, equally concerning, challenges to navigate – including AI, tighter budgets, salary inflation and continuing hybrid working demands. Attracting talent is only half the battle; keeping people engaged and supported is just as important.”
Ciphr’s research also asked HR professionals what employers should prioritise in response. Employee benefits topped the list (46 per cent), followed by a positive workplace culture and flexible working (both 45 per cent), fair pay (42 per cent) and career development opportunities (42 per cent).
Phil Curtis, Managing Director of Avantus Employee Benefits, part of the Ciphr Group, said flexible and personalised benefits were key to attracting and retaining talent.
“Employers who embrace flexible benefits – giving people greater autonomy to choose the benefits they genuinely want – have seen staff retention rates improve,” Curits said. Jobseekers today look beyond salary. They want to feel fairly rewarded and supported in their wellbeing.”
He added that improving benefits doesn’t always require large budgets: salary sacrifice options and smarter communication can help employees better understand the true value of what’s already offered.
The results underline the growing importance of employee experience and wellbeing as strategic business priorities. While the competition for skills continues, organisations that balance cost control with investment in people are expected to be best placed to adapt and succeed in 2026.
Ciphr’s survey was conducted in July 2025 via OnePoll among HR decision-makers at organisations across the UK, more than half of which were SMEs.
