KPMG and REC, UK Report on Jobs
December 2025

Key findings

• Weaker, but still marked, reduction in permanent worker demand
• Uncertainty and higher staffing expenses weigh on recruitment activity
• Pick-up in permanent salaries as firms seek to attract talented candidates

Data collected 12-24 November

Summary

November’s KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, indicated a further downturn in recruitment activity, with permanent placements declining again and temp billings down modestly. A high degree of market uncertainty, linked to the November Budget*, plus high employment costs limited hiring.

That said, the downturn in permanent placements eased for a fifth successive month and was the weakest since July 2024. Permanent salaries also increased as firms sought to attract skilled workers. However, with staff availability rising steeply, and competition for positions fierce, pay rates again rose to a historically subdued degree.

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

*Note the latest survey took place prior to the Budget on 26th November 2025. Panel responses were collected between 12th-24th November.

Permanent placements down markedly in November, albeit to lesser degree

Permanent placements continued to decline during November as subdued market confidence – linked in part to uncertainty in the lead up to the Budget that took place at the end of the month – and the impacts of higher employment costs continued to weigh on recruitment.

Permanent Placements Index (blue)

Temporary Billings Index (green)

50.0 = no-change

Sources: KPMG, REC, S&P Global PMI.

Although still marked, the degree to which placements fell eased again, dropping to its weakest since July 2024. Temp billings were also down only modestly, albeit signifying a return to contraction following marginal growth in October.

Vacancies continue to decline during November

Demand for staff declined again in November, in line with a trend that now stretches back over two years. Once again, the net reduction was marked, despite easing to its weakest since June. Vacancies for permanent positions continued to decline at a steeper pace than for temp workers.

Staff availability increases considerably

Latest data showed that the supply of candidates for new roles increased at the second-fastest rate since November 2020, with only August 2025 seeing a stronger rise during the past five years. Recruitment companies reported that redundancies and fewer vacancies had led to the upturn in labour supply. Both permanent and temporary worker availability increased at faster and historically strong rates.

Permanent salary inflation highest in five months

Permanent salaries continued to increase in November as firms remained willing to offer increased pay to skilled candidates. The rate of inflation also accelerated, rising to its highest level for five months, though remaining notably below its trend level as competition and increased labour supply limited the scope for increased pay. These factors tended to weigh even heavier on temp pay, which was unchanged overall in November.

Regional and Sector Variations

All four monitored regions of England registered lower permanent staff appointments in November, with the sharpest decline seen in the North of England.

Temp billings trends were mixed at the regional level, with a sharp and accelerated rise in the Midlands, and marginal growth in London. However, marked falls were seen in the South and North of England.

Vacancies for permanent staff fell across all ten monitored categories in November, albeit to varying degrees. The steepest reductions in demand were signalled for Construction and Retail workers, while the softest was seen for Blue Collar staff.

Nursing/Medica/Care was the sole exception to the general trend of falling demand for short-term staff in November and recorded a modest increase in vacancies. Hotel & Catering saw the sharpest drop in demand overall, while Blue Collar registered the mildest rate of contraction.

Comments

Commenting on the latest survey results, Lisa Fernihough, Head of Advisory at KPMG UK said:

“Despite a slight uptick in some indicators again this month, the latest figures confirm the jobs market remains stuck in contraction. A complex business environment and uncertainty around the Budget kept hiring on ice last month, as business leaders weighed potential impacts.

“There will be relief at the absence of major tax hikes, however that alone is unlikely to be enough to see a marked change in how firms are planning. For now, with many businesses still facing challenges it is likely many will maintain a cautious stance, balancing recent tech investments against the need to expand their workforce.”

Neil Carberry, REC Chief Executive, said:

“Pre-Budget nerves knocked temporary recruitment back just a little in November after a growing October, but the overall picture was still relatively benign by comparison to the last year. The market grew in London and the Midlands – two key bellwethers. Permanent hiring remained weaker, but numbers continue to improve a little month-on-month. With such a late Budget and the Christmas period just around the corner, the key now will be the decisions that employers make for their businesses this coming January.

“We can see signs of the market stabilising, including an improvement in pay rates for new jobs. But to really get businesses firing, they need confidence. While the Budget was not the horror show of last year, there was little in it to fire the heart of firms. More recently, moves to change the Employment Rights Bill will have landed well, but there is much more to do to get the economy firing. If government’s priority is growth, their report card at the end of 2025 reads “Must try harder.”