KPMG and REC, UK Report on Jobs - August 2025

Key findings

• Permanent and temporary labour availability rises rapidly.
• Recruitment activity falls at softer, but still marked rate.
• Starting salaries increase at softest pace for four-and-a-half years.

Data collected 12-22 August

Summary

Ongoing uncertainty around the economic outlook and concerns over costs contributed to a further reduction in staff hiring across the UK in August, according to the latest KPMG and REC UK Report on Jobs survey, compiled by S&P Global.

Recruiters signalled further marked falls in permanent placements and temp billings in the latest survey period, though the rates of decline were the least pronounced in three months. Overall vacancies meanwhile fell sharply once again, which, alongside reports of redundancies, drove the steepest upturn in candidate availability since November 2020. Shrinking demand for staff and concerns around payroll costs dampened rates of starting pay in August. Notably, starting salaries and temp pay both increased at rates far below averages seen since the survey began in 1997.

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

Staff hiring falls at softer but still marked rate

Recruitment consultancies across the UK signalled a further reduction in the number of people placed into permanent job roles in August. Although the rate of contraction was the slowest seen in three months, it was steep overall and often linked to weak confidence around the economic outlook and concerns over costs.

Permanent Placements Index

Temporary Billings

50.0 = no-change

Temp billings also fell at a slower, but still solid rate.

Sharpest rise in candidate numbers since November 2020

The availability of staff increased at a rapid and accelerated rate in August. Furthermore, the latest upturns in permanent and temporary labour supply were the most pronounced since November 2020, with the former seeing the sharper rate of growth overall. According to recruiters, redundancies, fewer job opportunities and concerns over current job security were key factors pushing up worker availability.

Overall demand for staff continues to fall

That latest survey pointed to a further marked drop in total vacancies across the UK midway through the third quarter. Notably, the pace of reduction was the steepest recorded in six months. Divergent trends were seen by job type, however, with a sharper decline in permanent vacancies contrasting with a softer fall in temporary job opportunities.

Permanent starters' salaries increase only marginally

Recruiters operating across the UK signalled muted rates of pay growth for both permanent and temporary staff in August. Furthermore, the increase in starting salaries was the weakest recorded in four-and-a-half years and only marginal, while temp wage inflation also remained much slower than the historical trend. Softer rates of pay growth were often linked to increased candidate availability, lower demand for staff and tighter client budgets.

Regional and Sector Variations

August survey data indicated that permanent staff appointments declined across all four monitored English areas, with the steepest reduction seen in the South of England.

The South of England recorded by far the sharpest reduction in temp billings in August. The Midlands meanwhile bucked the wider trend and registered a marginal expansion.

Construction was the only monitored sector to register an increase in demand for permanent workers in August, albeit marginal. The Retail sector meanwhile maintained its position at the bottom of the rankings, registering a rapid drop in perm vacancies, followed by Hotel & Catering.

August survey data pointed to a broad-based reduction in short-term vacancies, led by the Retail sector. The softest falls in demand were meanwhile signalled for short-term positions in the Construction and Blue Collar sectors.

Comments

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

“The business trading environment remains complex and it is still a mixed picture when it comes to reported business confidence. This complexity, coupled with a subdued economic outlook, means chief execs continue to pause their future spending plans, including hiring.

“Given the speculation around upcoming Budget measures, it's unlikely we'll see a significant shift in recruitment patterns in the near term as businesses evaluate their investment strategies in response to policy commitments and the rapid pace of change brought by AI and new technologies.”

Neil Carberry, REC Chief Executive, said:

“Employers need a shot of confidence along with their seasonal flu jabs this autumn. August saw recent declines in the market moderating, and a few positive signs – like an improving market for temps in the Midlands. Overall, permanent placements are declining at their slowest rate since May, and the reduction in temporary billings also eased. There is certainly potential out there - but with fewer vacancies and more candidates looking for work, the overall picture is still subdued. While we have seen a summer slowdown, we will hopefully see more positive signs when the September data come through next month.

“All eyes are now on the Autumn Budget, in hope now that the Chancellor won’t do any further damage to the labour market with costs on hiring. For the economy to thrive, the Budget must recognise the need for investment in people. Long-term investment in skills, workforce stability, a more practical approach to the Employment Right Bill and meaningful partnerships with employers will yield far more enduring returns than short-term fixes.”