2025 became a year that asked a lot of manufacturing and engineering businesses.
There were wins, there were setbacks, and there were plenty of moments where decisions felt heavier than they used to. But it was also a year that reinforced why the right recruitment partner matters and why people-led recruitment still has a place in an increasingly pressured market.
For us at Oliver Rae, 2025 was about staying close to our clients, listening hard, supporting candidates properly and continuing to do things the right way. This is our reflection on the year just gone, the challenges we faced together, and how we see manufacturing and engineering recruitment in 2026 shaping up.
What Oliver Rae Achieved in 2025
Five years of consistent, relationship-led recruitment.
Reaching five years in business was a proud moment for us. Not because of the milestone itself, but because of what it represents.
Five years of:
- Building genuine relationships
- Understanding roles before filling them
- Supporting people beyond their start date
In an industry that can move fast and forget even quicker, consistency has been one of our biggest strengths. With 842 temporary workers and 41 permanent placements made last year we’re proud to continue building relationships with both candidates and clients, solving hiring issues for our clients, creating job satisfaction for our candidates, and being the bridge between them both.
Being a Workforce Partner, Not Just a Recruiter
Throughout 2025, we worked alongside clients during BRC audits, new division launches, restructures and long-term workforce planning.
Recruitment wasn’t an afterthought. It was part of the conversation.
That’s exactly where we want to be, helping businesses make informed decisions about their people, not just reacting when a vacancy appears.
Staying Compliant and Ethical in a Tough Market
With increasing scrutiny across the recruitment sector, compliance and ethics remained front and centre. Maintaining our GLAA licence, REC and ALP memberships, and industry involvement allowed us to protect both our clients and candidates during a complex and ever-changing year.
Trust always matters, especially when the stakes are high.
Keeping the Human Side of Business
Despite the pressures of the market, we continued to celebrate our team, support community initiatives and show the human side of Oliver Rae. Recruitment is about people, not numbers, and that belief guides everything we do.
The Challenges We Faced Together
Closures, Reductions and Hard Decisions
2025 wasn’t without it’s challenges for many businesses. We saw many businesses close their doors, reduce their headcount, and pause their hiring plans. These were difficult moments, and they affected many people. Our phones were ringing with many candidates having been made redundant from jobs they’ve been in for 2-10 years. Experience that needed to continue to be utilised by clients we knew would harness and care for it.
Yet at the same time, the skills gap continued to grow.
A Skills Gap That’s Here to Stay
The skills gap we experienced in 2020 and 2021 felt reactive and temporary. The one we are facing now feels different. It feels structural.
It’s being driven by:
- An ageing workforce
- Automation and evolving job requirements
- Reduced entry into skilled technical careers
- Inconsistent investment in training and progression
This shift is shaping manufacturing & engineering recruitment in 2026 and beyond. It isn’t a short-term issue, and it can’t be solved with short-term thinking.
What We Are Seeing Now Across Manufacturing & Engineering
Cautious Optimism with Ongoing Pressure
From our conversations with our clients, there is cautious optimism. Some order books are improving and plans are being discussed. But pressure still remains.
Margins are tight. Hiring decision are slower. Every role feels like a bigger commitment that it used to be.
The Impact of National Minimum Wage Increases
The impending increase in national minimum wage will bring genuine benefits for workers in entry-level and lower-skilled roles such as packers, assemblers, and basic machine operators. That’s a positive step!
However, there are knock-on effects to this.
We will see:
- Pay compression between low-skilled and highly skilled roles
- Reduced financial incentive to pursue complex technical careers such as maintenance engineering, CNC programming and CAD
- Businesses struggling to restructure pay brackets across entire organisations
- Limited ability to pass increased costs onto customers without losing work
For many employers, higher labour costs have triggered a wider review of their position in the job market. In some cases, this has led to job losses or the loss of skilled talent from the shop floor.
A Personal View From the Front Line
There are moments where confidence is tested. There is light ahead, but it doesn’t always feel close. Equal opportunity matters, but so does recognising effort, responsibility and skill.
Those who train, qualify, and carry complex roles should be rewarded consistently. Without that recognition, the skills gap will only continue to widen.
That said, frustration alone doesn’t drive change. Action does.
Why A Recruitment Partnership Matters More Than Ever
As manufacturing & engineering recruitment in 2026 becomes more competitive, one thing is clear…businesses can’t afford to hire reactively.
Partnering with a recruitment agency that has genuine insight on the ground is critical. Not one that waits for vacancies to appear, but one that is already:
- Engaging with passive candidates
- Tracking future skill shortages
- Understanding shifting candidate expectations
- Advising on workforce planning before problems arise
Businesses that don’t invest in recruitment partnerships, training, and employer branding now risk being priced out of the market later.
Temporary to Permanent Hiring and Employment Rights
With changes to employment rights on the horizon, more businesses are considering temporary to permanent recruitment models. When used transparently and fairly, this approach can support both employers and candidates.
It allows businesses time to assess long-term fit while giving individuals clarity and security. However, it must never be used to mislead candidates or create false expectations. Fairness and honesty are essential if this model is to work.
Looking Ahead to Manufacturing & Engineering Recruitment in 2026
The coming year will not be easier by default. The skills gap is entrenched. Labour costs are rising. Candidate expectations are changing. Flexibility is becoming the norm, not the exception.
We are already seeing more four-day weeks, early Friday finishes and flexible working arrangements used as tools to attract and retain talent when salary alone can’t compete.
For manufacturing and engineering businesses, the message is pretty clear…long-term workforce planning is no longer optional.
At Oliver Rae, our focus remains the same. To support businesses, advocate for skilled workers and deliver recruitment that is built on care, insight and accountability. Because the future of manufacturing & engineering recruitment in 2026 belongs to those who invest in people now, not those who wait until the gap becomes impossible to close.
If your a manufacturing & engineering business in the West Midlands and want to start planning your hiring plan for the year now…you’ve come to the right place! Get in touch with us if you would like our help or insight into the job market this year, we’ll be happy to discuss it with you!