Navigating Salary Negotiations in a Cooling UK Labour Market
After a year of significant pay rises, the UK labour market is entering a more restrained phase. Wage growth is easing as inflation cools and employers adopt greater caution regarding costs. The era of widespread, substantial wage increases appears to be diminishing, but the opportunity for negotiation has not vanished entirely. Organisations continue to hire and compete for essential skills, with shortages remaining acute in certain industries. For employees who prepare thoroughly, there remains scope to advocate for higher compensation, whether seeking a raise in a current role or negotiating a stronger offer elsewhere.
Is There Still Room to Negotiate Salaries?
Emma Kwiatkowski, a director at recruitment firm Hays, asserts that negotiation is always possible when discussing job offers. "We know that organisations are still increasing salaries: eight in ten (82 per cent) increased salaries last year and a similar number (80 per cent) plan to do the same in 2026, according to our latest research," she explains. However, the balance of power is shifting. Dr Duncan Brown, principal associate at the Institute for Employment Studies, notes that the premium traditionally enjoyed by job movers has narrowed.
"Throughout the 2010s, a decade overall of low inflation and austerity, people moving jobs on average got much higher pay awards than people staying put - three to four times as high," he says. Currently, many employers are adopting what he terms a "peanut butter approach" - spreading modest increases evenly across staff rather than awarding large individual rises. This often translates into average uplifts of approximately three per cent.
Determining How Much to Request
There is no universal "right" figure for salary requests; it depends on your industry, role, and the demand for your skills. Kwiatkowski highlights that uplift varies by sector and seniority. "Our research found that salary increases for those in-post were higher than average in industries such as legal, business support, and accountancy and finance," she states. She adds that candidates with specialist skills, particularly in the tech industry, can often negotiate more favourable salaries as employers are willing to invest where skills are scarce.
Brown emphasises the importance of focusing on your specific occupation. "If you are an employee seeking higher pay, either internally in your organisation or by moving jobs, researching the situation in your own sector and occupation is really important right now, rather than relying on general national statistics," he advises. A rise of 10 to 20 per cent may still be achievable when moving roles in favourable markets, but within current organisations, tighter pay bands necessitate a carefully prepared case.
Strategies for Negotiating in Your Current Job
Preparation is paramount for professionals aiming to negotiate a pay rise in their existing role. Kwiatkowski stresses, "Putting together a strong business case is more important than ever." This begins with comprehensive market research. "Mapping responsibilities and achievements against market-standard salary levels based on skills, specialism or region gives the best chance of a positive outcome," she notes.
You must also provide evidence of your value. "Show recent achievements and increased responsibilities, backed up with facts and figures such as revenue generated, improved client relationships or costs saved," Kwiatkowski recommends. Be prepared for questions and avoid demanding an immediate answer. If the outcome is negative, carefully consider your next steps. "If you're not successful, you need to decide whether you plan to stay on or not," she adds.
Approaches for Negotiating a New Job Offer
A job offer frequently represents your strongest point of leverage. It is crucial to benchmark the role meticulously, understand local compensation for similar positions, and determine in advance what you would accept. However, salary is only one component of the overall package. "Candidates can also ask for benefits to be included in the overall package," Kwiatkowski points out.
Brown cautions against focusing solely on headline pay, warning that a higher salary might seduce candidates while overlooking weaker pension provisions. Additionally, bonuses, share schemes, and flexible working arrangements can sometimes be easier to adjust than base pay.
Conclusion: The Key to Successful Negotiation in 2026
Negotiating pay in 2026 is less about bravado and more about diligent preparation. Research your market thoroughly, construct a clear and compelling case, comprehend your total reward package, and maintain realistic expectations regarding what your sector can offer. While across-the-board bumper rises may be rarer than in previous years, for individuals who understand their value and can substantiate it with evidence, there remains significant room to advance financially.
