KPMG and REC, UK Report on Jobs September 2026

Key findings

• Slight increase in perm placements, while temp billings growth improves
• Strongest upturn in permanent starters' pay since January
• Staff availability continues to rise markedly amid further drop in vacancies

Data collected 12-24 August

Summary

UK recruitment consultancies signalled the first broad-based improvement in hiring trends for nearly four years in August, according to the latest KPMG and REC, UK Report on Jobs data, which are compiled by S&P Global. Permanent placements rose slightly for the first time since late-2022, while temp billings expanded for the fifth month in a row.

Pay trends stayed strong in August, as recruiters reported a quicker rise in starting salaries and another solid increase in temp wages. Meanwhile, a further fall in overall vacancies and redundancies contributed to another marked rise in total candidate supply, which grew at the fastest pace for three months.

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

Recruiters signal fresh rise in permanent staff appointments while temp billings expand solidly

Permanent staff appointments across the UK rose for the first time since September 2022 in August. The uptick was often linked to an improvement in market confidence and companies’ efforts to expand capacity. However, uncertainty regarding the economic outlook and government policy reportedly dampened the rate of expansion, which was marginal overall. Temp billings meanwhile rose at a stronger pace that was the second-quickest in over three years, driven by a preference for short-term staff and greater amounts of contract work.

Permanent Placements Index

Temporary Billings Index

50.0 = no-change

Solid growth in starting salaries and temp pay

Competition for highly skilled candidates and those with niche skills, as well as rising living costs, drove further increases in starting pay for both permanent and temporary workers in August. The rise in salaries was the quickest since January, while the rate of temp wage growth was among the strongest seen over the past two years.

Availability of staff rises at quicker pace...

The number of people seeking new employment rose at the sharpest rate for three months in August. Redundancies remained a prominent theme when recruiters commented on the latest increases in availability, as well as fewer job opportunities and concerns over current job security. Permanent labour supply continued to rise more sharply than temporary candidate supply, with the latter posting the second-softest rise in over three years.

...as vacancies continue to decline

Overall demand for staff fell for the thirty-fourth month in a row in August. Though solid, the rate of contraction was the second-weakest in nearly two years, having accelerated only slightly from July. Permanent vacancies fell at a solid pace that was unchanged from July, while demand for short-term staff fell following a brief rise in the previous month.

Regional and Sector Variations

Divergent trends continued to be signalled at the regional level, with permanent placements rising in London and the Midlands, but falling in the South and North of England.

Three of the four monitored English areas recorded increases in temp billings midway through the third quarter, led by the North of England. The Midlands was the only area to register a fall, albeit one that was modest.

Permanent staff vacancies rose across the Engineering and Accounting/Financial sectors during August, but fell in the remaining eight job categories monitored by the survey. The steepest reductions in demand were once again seen in the Retail and Hotel & Catering sectors.

Latest data indicated that temporary staff vacancies rose across four of the ten monitored job sectors in August, led by Blue Collar and IT & Computing. Hotel & Catering registered the sharpest drop in demand for short-term staff, closely followed by Retail.

Comments

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

“Confidence is beginning to return to the market. Businesses have learned to adapt to constant global uncertainty, building greater resilience into their strategies. Since the spring, employers have favoured flexible temporary hires to support their investment plans, but permanent placements have also now risen for the first time in almost four years.

“This is clearly encouraging after such a prolonged downturn in hiring, but the jobs market continues to contract overall. Vacancies are still falling, the number of people looking for work continues to rise, and some employers are keeping the brakes on recruitment because of continued geopolitical uncertainty and elevated borrowing costs.

“With the Budget next month, the Government has the opportunity to turn these green shoots into sustained positive momentum. A clear and credible plan for growth would give businesses greater certainty over the outlook and help unlock stronger demand across the jobs market.”

Maxine Bligh, Interim Chief Executive at the Recruitment and Employment Confederation (REC), said:

“The job market is starting to power up again after employers had permanent hiring on the standby button for the past four years. It is encouraging that temporary recruitment is now complementing rather than replacing permanent hiring. Now we need to see this confidence to hire widen out across the country and more sectors of the economy.

“Government, business and trade unions must act to shore up this fragile momentum in the job market. This is not the time to take the job market for granted. Instead, government should follow through on its commitment to lessen burdens on business. This means greater pragmatism on the employment rights agenda, including lessening the gamble the government is taking with its guaranteed hours policy. It also means delivering an Autumn Budget that demonstrates the government is serious about backing business and provides employers with the confidence they need to hire, invest and grow."