Permanent staff appointments in the UK stabilised in July after 45 consecutive months of decline, while temporary billings increased for a fourth month, according to the latest recruitment-industry survey.
The KPMG and Recruitment and Employment Confederation UK Report on Jobs, compiled by S&P Global from responses from around 400 recruitment and employment consultancies, recorded the first month without a fall in permanent placements since the prolonged downturn began.
Temporary vacancies also increased for the first time in two years. The rise was modest, but was the strongest recorded since August 2023, while the fall in permanent vacancies eased to its weakest in 22 months.
Overall demand for workers continued to decline, although the rate of deterioration slowed. The combination leaves the recruitment market in a transitional position: some measures have stopped worsening, but the data has not yet moved into a broad-based recovery.
Temporary billings rose for a fourth consecutive month, with growth remaining among the strongest recorded during the past three years. Recruiters reported that some employers continued to prefer flexible labour while political uncertainty, economic conditions, and employment costs constrained commitments to permanent recruitment.
Callum Licence, group head of advisory at KPMG UK and Switzerland, described the end of the 45-month contraction in permanent placements as “a big milestone.”
Candidate availability nevertheless remained elevated. The supply of people seeking work increased sharply again during July, extending a rise that has lasted for almost three and a half years. The pace eased to a five-month low, but recruiters continued to cite redundancies and limited job opportunities as factors increasing candidate numbers.
Pay indicators strengthened despite that availability. Starting salary inflation reached a six-month high, while temporary wage growth was the strongest for 26 months. Recruiters linked some increases to shortages of suitably skilled or experienced candidates.
The divergence shows how a labour market can remain weak in aggregate while particular capabilities command stronger pay. Employers may have more applicants overall but still struggle to recruit people with specialist experience, technical knowledge, or sector-specific qualifications.
The findings create a more mixed picture than recent vacancy data. Indeed data published earlier this month showed UK job postings falling 11% from the start of the year, alongside particularly weak graduate hiring and growing demand for artificial-intelligence skills.
The datasets measure different parts of the labour market. The REC survey tracks recruitment-consultancy activity, while online job postings provide a broader measure of advertised demand. Taken together, they suggest recruitment conditions are becoming more uneven rather than uniformly stronger.
Regional variation was also substantial. London and the Midlands recorded renewed growth in permanent placements, with London producing its strongest expansion for almost four years. Permanent hiring continued to decline in the South and North of England.
Temporary billings were strongest in the North, followed by London, while the Midlands recorded a slight fall. The regional split points to differing labour demand across local economies rather than a single national hiring cycle.
Demand also varied sharply by occupation. Permanent vacancies increased in three of the ten sectors monitored by the survey, led by nursing, medical, and care roles. Retail and hotel and catering recorded the steepest reductions. Temporary vacancies increased in seven categories, with blue-collar and engineering roles leading the expansion.
The increased use of temporary labour is consistent with employers preserving flexibility while demand, costs, and investment conditions remain uncertain. Temporary hiring allows businesses to add capacity around projects, seasonal requirements, or short-term workloads without making the same long-term commitment associated with permanent headcount.
A sustained recovery in permanent placements would provide stronger evidence that confidence has broadened. Employers generally need greater certainty over future workloads and costs before adding fixed headcount, particularly after an extended period of weaker recruitment.
The July data nevertheless removes one of the longest-running negative signals in the market. Permanent placements are no longer falling on the survey measure, temporary work is expanding, and wage growth has strengthened.
The next few months will show whether that stabilisation can survive against still-high candidate availability and continued weakness in vacancies. For now, the labour market appears to be moving away from prolonged contraction without yet reaching a decisive expansion.
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