Construction and manufacturing lead workforce growth
While artificial intelligence continues to reshape the UK employment landscape, several industries are bucking the trend of workforce contraction and actively hiring new staff, according to data from HR platform Employment Hero.
The analysis, based on data from tens of thousands of employers using the service, reveals which sectors are expanding their headcount and which are shedding jobs as businesses adapt to economic pressures and technological change.
Blue-collar employment is experiencing a surge as AI-proof jobs remain in high demand. The construction industry saw employee numbers climb 2.1 per cent in June and 8.1 per cent over the three-month period, according to Employment Hero data.
However, the sector faces significant headwinds. The Construction Products Association forecasts that UK construction output will contract by 2.5 per cent in 2026 due to geopolitical tensions, higher energy prices and rising construction costs weighing on confidence. Despite this, the industry requires 266,000 additional workers to meet demand, with workforce shortage identified as the single greatest threat to growth. The challenge is compounded by an ageing workforce, with 35 per cent of construction workers now over 50.
Looking ahead, the Construction Industry Training Board projects the UK construction workforce will reach approximately 2.68 million by 2030 as the sector expands to meet expected activity levels.
Manufacturing is experiencing even stronger growth, with a 4.7 per cent rise in workers in June and a substantial 9.3 per cent increase over the past year. Prime Minister Andy Burnham, who took office in July 2026 after Sir Keir Starmer's resignation, has pledged to reindustrialise Britain through public procurement backing British industry.
Young graduates are increasingly shifting towards vocational work and apprenticeships as artificial intelligence makes it tougher to break into some entry-level office positions. With over 625 different apprenticeship types available across UK industries, opportunities for hands-on training have expanded significantly. The government introduced new restrictions in January 2026, limiting funding for Level 7 apprenticeships to those aged under 22 or under 25 with an Education, Health and Care Plan or care leaver status.
Kevin Fitzgerald, UK managing director at Employment Hero, said many young people are changing direction and taking up more vocational roles in sectors where apprenticeships are more common.
Education sector expands to meet growing demand
AI-resistant roles also exist in teaching. Education sector employment rose 4.4 per cent in June, with 8.1 per cent growth over three months. Employment Hero attributed the increase to a surging student population and more complex curriculum requirements, both boosting demand for qualified teachers.
Technology creates new opportunities
While AI has eliminated some positions, it is simultaneously creating roles for workers who can develop and deploy such systems. Science and technology positions saw the strongest monthly growth in June at 5.7 per cent, driven by surging AI adoption across industries.
Financial services face workforce contraction
Roles in banking and accounting have declined sharply, the data shows. Accountancy employment dropped 0.1 per cent in June but fell 6 per cent over three months. Employment Hero cited increased automation and a shortage of qualified talent as primary factors.
Banking sector employment declined 1.6 per cent in June and 5.7 per cent over the past quarter. The high-pressure work environment deters some applicants, whilst AI has replaced certain functions and political uncertainty has prompted hiring freezes. Salaries in banking dropped to a 13-month low of £47,025 in the year to June, making it the only sector with negative wage growth.
The picture is more nuanced than simple contraction, however. KPMG's UK Financial Services Sentiment Survey found that 55 per cent of firms plan to increase hiring in 2026, with AI development the second biggest factor influencing recruitment decisions at 25 per cent. This suggests the sector is restructuring rather than shrinking, with demand shifting towards AI-related expertise. AI is forecast to add £26 billion to the UK financial services sector by 2030, fundamentally reshaping team structures and decision-making processes.
The transformation is part of a wider European trend, with forecasts predicting over 200,000 banking jobs will be eliminated across the continent by decade's end as automation targets high-skill white-collar positions once considered secure.
Administrative and office support roles also declined 0.3 per cent in June as AI encroaches on routine clerical work.
Labour market under pressure
The employment shifts are occurring against a backdrop of broader economic challenges. UK unemployment reached approximately 5.2 per cent in the three months to January 2026, a post-pandemic high, whilst wage growth slowed to around 3.8 per cent.
Kevin Fitzgerald of Employment Hero said the UK labour market is experiencing a fundamental shift. Industries such as banking, finance and insurance form a large part of the economy and have traditionally been the natural destination for graduates, but these sectors are navigating significant economic pressure and technological transformation. Many businesses are adopting a more cautious hiring approach as a result.
