The Employment Rights Act 2025 (ERA) has already changed the calculations behind every hiring decision – and it’s just getting started.
Employers and recruiters may need to rethink hiring strategies built around time-to-hire KPIs and reliance on probation windows addressing skill gaps. Instead, investing in more predictive assessments, clearer role definitions, and prioritising retention from day one could be the new norm.
The question is no longer simply how quickly an organisation can fill a vacancy, but how confidently it can make a hire that lasts. If not, they may face the biggest brunt of rising costs reported in the aftermath of the ERA.
Why the cost of bad hiring is changing
With 2026 already bringing with it a wealth of employment law changes, from day-1 rights to industrial action protection, some of the more significant rules are still to come.
Unfair dismissal protection threshold
From January 2027 onwards, workers will only have to work for an employer for 6 months to qualify for protection from unfair dismissal (previously 2 years).
With many probation periods currently lasting 6 months themselves, it puts recruiters and employers in a sticky situation if they don’t take proactive action for new hires that might not look as promising as they hoped. This could also widen the net of ‘potential dismissal claims’ if not handled properly, with the threat of defence costs waiting on the sidelines.
‘Fire & rehire’ tactics no longer ‘fair’
The new restrictions on “fire & rehire” tactics on the horizon make it more important than ever to get the role right from day 1.
It’s not uncommon for duties and responsibilities to need to evolve as a role progresses. But if you find you need to make substantial changes, new rules will automatically class it as “unfair dismissal” if it involves dismissing an employee because:
- They won’t agree to the contractual changes
OR
- The employer wants to re-hire or replace them with varied contractual terms
This means more resources and effort will need to go into proper role definitions and candidate assessments to make sure it’s absolutely what the hiring company needs – no retractions.
Speed can no longer be the prioritised metric
“Time is money” is an adage we all know, and the recruitment market isn’t immune from the mindset. It makes sense that hiring managers want to get roles filled quickly – a headcount gap and the costs of the recruitment process can be draining.
But rushed placements can lead to easy oversights and mistakes in candidate selection.
The mindset recruitment stakeholders should have? Quality over quantity.
The good news is recruitment stakeholders are already showing a shift towards quality of hire. In fact, Guidant Global’s 2026 report found 64% of procurement leaders prioritise quality of hire when assessing recruitment solution providers. Though 42% still value speed of delivery as a top-3 KPI.
This is mirrored by Greenhouse research (noted by the Talent Labs Recruitment Agency Trends Report 2026) that found 84% of hiring leaders believe quality of hire is more of a priority than increasing hiring volume.
Recruitment and retention should go hand in hand
Historically, retention has often been viewed as an HR responsibility. But recruitment and retention are becoming increasingly interconnected.
If organisations face greater consequences from failed hires, it makes little sense to treat recruitment and retention as separate challenges.
Recruiters can take steps to maximise successful placements by advising clients on:
- Employer branding
- Candidate expectations
- Flexible working arrangements
- Career progression opportunities
- Cultural fit
The most valuable recruitment partners will be those who can help employers build workforces that stay, not simply provide candidates who can start.
Recruitment strategies must become more predictive
If replacing an unsuitable employee becomes more costly (and more legally complex), employers will naturally seek greater confidence before making an offer. Recruiters can support more informed decisions by focusing investment in:
- Skills assessments
- Structured interviews
- Behavioural testing
- Reference checking
- Workforce planning
As it stands, workforce planning seems to be the weakest area, with the CIPD Resourcing and Talent Planning Report 2026 finding that 24% of surveyed organisations take a short-term approach (up to 6 months) whereas only 16% are planning more than two years ahead.
What this means for recruiters
The reforms could accelerate a broader shift that’s already underway within the recruitment industry.
Clients are looking for more than access to talent pools. They need guidance on:
- Workforce planning
- Hiring risk
- Candidate suitability
- Retention strategies
- Labour market trends
Recruiters who position themselves as strategic advisers rather than transactional suppliers are likely to become increasingly invaluable.
Safeguarding against a changing landscape
Understanding risks is one thing – managing them effectively is another. Kingsbridge Recruitment offers recruiters specialist insurance that reflects how they actually operate, backed by expert guidance to help them navigate their risk landscape with confidence.
With the right partner, insurance can be a practical safeguard, not a guessing game.
Speak to the Kingsbridge team – they’ll be more than happy to answer your questions.
*Disclaimer – any dates provided in this article are correct at the time of writing. Implementation of legislation is subject to government consultation. For more accurate timelines, please check government websites.
