KPMG and REC, UK Report on Jobs - June 2025

Key findings

• Candidate supply expands at sharpest rate since end of 2020
• Demand for staff falls at softest rate in eight months
• Pay growth strengthens but remains below historical trend

Data collected 12-23 May

Summary

The latest KPMG and REC UK Report on Jobs survey, compiled by S&P Global, pointed to a further reduction in UK recruitment activity in May. Permanent placements fell at a slightly sharper rate, but the decline in temp billings was the slowest in six months. Concurrently, overall demand for staff fell at a notably softer rate.

The availability of candidates meanwhile rose at the quickest pace for nearly four-and-a-half years amid reports of redundancies and fewer job opportunities. At the same time, rates of starting pay increased further in May, though growth of both starting salaries and temp wages remained weaker than on average.

The report is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.

Hiring activity falls again, particularly for permanent staff

Recruitment activity across the UK continued to slow in May, with survey members reporting that weaker confidence around the outlook and concerns over costs had dampened staff hiring. While permanent staff appointments fell at a slightly quicker and sharp rate, the downturn in temp billings slowed since April to the softest in six months.

Permanent Placements Index

Temporary Billings

50.0 = no-change

Sharpest rise in candidate supply for nearly four-and-a-half years

Candidate availability continued to rise in May, with the rate of growth the steepest since December 2020. Recruiters signalled quicker increases in the supply of both permanent and temporary staff, with the former recording the sharper rate of expansion. There were frequent reports that redundancies and fewer job opportunities had pushed up candidate numbers in the latest survey period.

Vacancies decline at softest rate in eight months

The downturn in demand for staff eased notably in the latest survey period, with total vacancies declining at the weakest rate since last September. Softer reductions were signalled for both permanent and temporary vacancies, though in each case the rate of contraction was solid.

Stronger increases in starting pay

Salaries awarded to new permanent joiners increased further in May, with recruiters often noting that competition for suitably-skilled candidates had driven the latest upturn. The rate of salary inflation was the quickest seen since last August. At the same time, temp wage growth improved to a one-year high. That said, rates of inflation remained below their respective long-run averages.

Regional and Sector Variations

The sharpest reduction in permanent placements was seen in the South of England. The Midlands meanwhile bucked the wider UK trend and recorded the first increase in placements for a year (albeit marginal).

Three of the four monitored English regions registered a decline in temp billings, led by the South of England. In contrast, the Midlands recorded the first expansion in four months.

Seven of the ten monitored job categories registered lower demand for permanent staff in May. Hotel & Catering saw the sharpest reduction in vacancies, followed by the Nursing/Medical/Care and Retail sectors. The strongest uptick in demand was seen in the Engineering category.

Engineering was the only monitored job sector to record an improvement in demand for temporary workers during May. Retail meanwhile saw the steepest drop in vacancies, with sharp contractions also noted across the Executive/Professional and Nursing/Medical/ Care sectors.

Comments

Commenting on the latest survey results, Jon Holt, Group Chief Executive and UK Senior Partner KPMG, said:

“May’s data shows very little change. Employers are still holding back on hiring, which meant last month the number of jobseekers increased at the steepest rate since 2020.

“The first half of this year has been full of uncertainty for businesses who are still trying to navigate cost pressures, technology advancements and global risks. Business leaders will want to see how the new trading agreements with the US and EU, Government spending plans and the Modern Industrial Strategy will drive forward our economic growth. To boost the jobs market employers need to feel confident about the outlook and understand how AI will impact their business.”

Commenting, Neil Carberry, REC Chief Executive, said:

“More encouraging signs in temp billings, vacancies, and stabilising private sector demand offer a measure of optimism as we head into the second half of the year. There are early signs of promise, particularly in the Midlands, which saw its first increase in permanent placements in a year and a rise in billings after four months. Meanwhile, the downturn in temporary billings has eased further in London and the North of England.

“The big test now is whether the Spending Review convinces more employers to dance at the party by turning intent on hiring and investing into action. The Spending Review delivered a big hit in terms of eye-catching spending on technology and energy, but the lack of announcements on workforce matters is badly out of step with its desire to build a deep pool of talent.

“With the Industrial Strategy imminent, businesses are looking for more than talk of renewal, they want a clear plan for an economic revival. One that acknowledges the central role of good workforce policy – beyond just employment rights. That means putting workforce matters at the heart of the agenda, not treating it as a compliance issue.”