KPMG and REC, UK Report on Jobs May 2026

Key findings

• Stronger, but modest decline in permanent placements
• While temp billings expand for first time in three months
• Rates of pay growth remain relatively weak

Data collected 9-24 April

Summary

Heightened market uncertainty amid the war in Iran and rising business costs contributed to a faster fall in permanent staff appointments across the UK in April, according to the latest KPMG and REC, UK Report on Jobs survey. Meanwhile, temp billings edged up slightly for the first time in three months, as some employers expressed a preference for flexible staff amid the current economic climate. 

Total demand for workers fell at a slightly softer, but still solid rate. This, combined with reports of redundancies, contributed to a further marked increase in candidate availability. Finally, while pay indicators picked up from March, they continued to signal historically weak rates of both starting salary and wage growth.

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

Permanent placements fall at quickest pace since January

Greater uncertainty around the outlook due to the Iran war and rising cost pressures contributed to a quicker reduction in permanent staff appointments across the UK in April. That said, the pace of decline remained slower than typically seen in 2025. The prevailing economic environment led to a preference for short-term staff at some firms who wanted to push ahead with business development and expansion plans.

Permanent Placements Index

Temporary Billings Index

50.0 = no-change

This resulted in a fresh, albeit marginal, increase in temp billings.

Downturn in vacancies eases slightly

Demand for staff continued to decline in April, falling for the thirtieth successive month. However, the rate of contraction continued to ease, and was the softest seen for nearly a year. Permanent job opportunities fell at a stronger rate than temporary positions, with the latter falling modestly overall.

Permanent salary growth remains subdued...

Starting salaries for permanent workers increased again at the start of the second quarter. Although the rate of pay growth quickened from March's five-month low, it was mild overall and below the survey's long-run average. Temp pay growth also strengthened since March, but remained historically subdued.

...amid further steep rise in staff availability

The overall availability of workers continued to increase markedly in April. Redundancies and lower demand for staff were cited as key factors driving the latest rise in candidate numbers. However, the rate of expansion eased since March and remained slower than typically seen in 2025. Permanent staff supply rose at a slightly quicker pace than temporary workers.

Regional and Sector Variations

Permanent placement trends diverged at the regional level in April, with substantial falls across the Midlands and the South of England offsetting marked upturns in London and the North of England.

Temp billings trends varied by region, with increases seen in the Midlands and the South of England, while declines were recorded in London and the North of England.

Across the ten monitored job categories, Engineering was the only area to register an increase in demand for permanent workers in April, with the rate of expansion solid overall. Hotel & Catering and Retail meanwhile recorded the steepest falls in permanent vacancies.

April survey data signalled greater demand for short-term staff across the Nursing/Medical/Care and Blue Collar sectors in April. Temporary vacancies across the Engineering sector were unchanged. The steepest drop in temp job opportunities was recorded in Retail.

Comments

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

“The small signs of recovery in the jobs market may have been disrupted in April by the uncertainty stemming from the conflict in Iran. Although conditions remain more favourable than they were through much of 2025, hiring decisions are being deferred, with the rise in temporary recruitment pointing to chief execs taking a more flexible approach to workforce planning.

“As business resilience becomes a greater priority, that flexibility may help avoid a deeper downturn in the labour market and support growth plans, even as they brace for further economic headwinds.”

Neil Carberry, REC Chief Executive, said:

“So far this year we’ve seen signs of improving momentum but that is now being tempered by the economic effects of the Gulf conflict. Businesses will be particularly concerned about the impact on inflation, their borrowing costs and any disruption to wider supply chains. The good news is that employers are leaning more on temporary work to move ahead with their plans in this more uncertain time, demonstrating again why temporary and contract work matters so much to growth and jobs. The temporary sector showed its strongest growth in two and a half years last month. Government can do more to help firms feel able to commit to permanent hiring too, by addressing the cost of doing business – the key domestic contributor to hiring activity. Taking the threat of badly designed guaranteed hours rules off the table would make a huge difference.”