We’re running out of snappy ledes about how the labor market has roiled from economic challenges…and it seems we’re going to need to get creative.
While slightly more employers plan to hire in Q1 2026 than in Q4 2025, many anticipate continuing to hold off, citing economic uncertainty, a new ManpowerGroup survey found.
Forty-three percent of employers plan to increase their staff in Q1 2026, while 16% are planning reductions, according to the survey, which tracked responses from 6,000-plus employers in the US. Another 37% said they don’t anticipate changes.
By comparison, 41% of employers planned to hire in Q4 2025, while 13% anticipated cuts and 42% expected no changes. Similarly, looking year over year, 41% of employers planned to increase their ranks in Q1 2025, while 16% expected to decrease and 40% expected to stay constant.
Growth. For the 43% of employers planning to expand in Q1 2026, the business outlook seems optimistic: 37% said they plan to hire to facilitate organizational growth, while another 26% said they’re pursuing new business areas. Only 19% attributed hiring plans to backfilling positions.
It’s a “super positive sign” that employers are focused on hiring for growth and not simply to make up for attrition, Raj Namboothiry, SVP at Manpower US, told HR Brew.
“When I hear clients talk about hiring for transformation, hiring to invest in the future, hiring for growth, hiring to increase capacity, that is where you see employer confidence shift a little bit, as they start to plan for the future,” he added.
Construction and real estate (36%) had the strongest net employment outlook—which measures the difference between the share of employers planning to increase and decrease staff—followed by information (32%), and finance and insurance (31%).
Plagued by uncertainty. Economic uncertainty, however, is the driver behind the 53% planning to reduce or not change their headcounts. Of employers planning to reduce their staff, 44% cited economic challenges, while another 24% said market shift had reduced demand for specific jobs, and 23% and 21% pointed to right-sizing and restructuring, specifically.
Of the companies without planned changes, 22% say they’re in wait-and-see mode.
For those holding back on hiring, “the message is consistent,” Namboothiry said. Employers have been battered by everything from tariffs to weak consumer spending to pressure to maximize profits amid belt-tightening. “There’s economic challenges, there’s market shifts, there’s uncertainties,” he added, saying it’s forcing employers to say, “‘We’re right-sizing our business. We’re restructuring. We’re looking to drive operational efficiency.’ That is where the pause is.”
Large employers with 1,000 or more employees had the weakest outlook for Q1 2026. Many went on hiring sprees during the Great Resignation, creating the conditions for a retraction in 2025, Namboothiry said, adding, “They’re the ones that over-hired, and they’re sitting on some level of cost and talent and figuring out…do we right-size, or do we hold on to this talent?”
Mid-sized businesses (with 50–249 employees), meanwhile, had the strongest employment outlook, and are in the best position to invest in growth and hires, Namboothiry added.
Look ahead. Employers should start contemplating what talent strategy may be required in the next six to nine months to help achieve profitability and growth, Namboothiry said.
“There’s been some stagnant numbers in terms of growth. And I think employers, companies need to start thinking about what they need to do to drive growth and profitability in their business, and making sure that they have the right talent pool to grow, to diversify their business, to adjust for the new ways of working,” he said.
This report was originally published by HR Brew.
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