Jo Thompson Recruitment contributes to the Report on Jobs, a comprehensive guide on the UK labour market drafted by KPMG and the Recruitment & Employment Confederation (REC), compiled by S&P Global. This monthly report is built upon survey data from recruitment consultancies and employers, providing valuable insights into the latest labour market trends.

Recent data from the UK Report on Jobs suggests the recruitment market remains subdued overall, with permanent placements continuing to face pressure amid cautious hiring strategies and ongoing economic uncertainty. Many organisations are prioritising cost control and delaying long-term hiring decisions.

However, there are early signs of stabilisation. Temporary billings have increased for the first time in three months, indicating that employers are turning to flexible resourcing solutions to manage workload and maintain agility in an uncertain environment. This trend reflects a preference for short-term support over permanent headcount growth.

At the same time, rates of pay growth remain relatively modest. While skill shortages persist in certain sectors, this has yet to translate into significant upward pressure on salaries. Employers appear to be balancing the need to attract talent with tighter budget constraints, resulting in more measured and selective pay increases.

Overall, the market reflects a clear theme: caution in permanent hiring, pragmatism in workforce planning, and a growing reliance on flexibility to navigate uncertainty.

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.”

Commenting, 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.”

Executive Summary

The main findings for April are:

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. 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 for 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.

Pay Pressures

The recruitment industry survey tracks both the average salaries awarded to people placed in permanent jobs each month, as well as average hourly rates of pay for temp/contract staff.

Starting salary inflation picks up only slightly in April

Recruiters operating across the UK signalled a sustained rise in starting pay for permanent workers in April. The rate of pay growth quickened slightly on the month but was nevertheless weak in the context of the typical rates seen over the past five years and well below the survey average. There were reports of employers offering higher pay due to competition for particular skills. However relatively subdued overall demand for staff and tighter budgets weighed on growth. London recorded the strongest rise in salaries, while the softest was seen in the Midlands.

Modest increase in temp wages

Average hourly rates of pay for short-term staff increased again in April, as highlighted by the respective seasonally adjusted index posting above the neutral 50.0 value for the fifth straight month. Some firms linked the rise to stronger than average increases in the national minimum and living wage rates. The rate of inflation accelerated from March’s recent low, but was mild overall and well below the historical trend. Solid increases in temp pay were reported in the South of England and the Midlands, while a fractional rise was seen in London. The North of England meanwhile registered a second successive monthly fall.

KPMG and REC, UK Report on Jobs: South of England

April’s insights show permanent placements declining at their fastest rate in nearly two and a half years, alongside falling vacancies, rising candidate availability, and a drop in temporary billings following a brief uplift at the start of the year.

Commenting on the latest survey results David Williams, Bristol Office Senior Partner at KPMG UK, said:

 “April’s figures suggest that employers across the south are still reluctant to commit to permanent hiring, with business confidence continuing to be held back by wider uncertainty. The sharper fall in permanent placements shows that many organisations are continuing to pause or slow long-term recruitment, even where underlying demand for skills remains.

“At the same time, the return to growth in temp billings points to a market that is adapting rather than stalling. Employers are still hiring, but with a clear preference for flexibility, while rising staff availability is easing some pressure on recruitment pipelines. Yet with temp wage growth accelerating to its fastest pace in a year, the cost benefits of flexible hiring may erode in the coming months.”

Special Feature

This section features official data from the Office for National Statistics about employment and vacancies.

Employment stabilises, but vacancies fall further

UK employment was broadly stable over the three months to February 2026, according to latest data from the Office for National Statistics (ONS). However, vacancies continued to decline over the opening quarter of the year.

At 75.0%, the employment rate was little-changed from 75.1% in the prior three-month period (September to November 2025). The number of people in work now stands at 34.32 million, a figure that has changed little in recent releases, suggesting a broadly stable trend in overall employment.

However, total vacancies declined by 3.9% on an annual basis to 711,000 over the first quarter of 2026; the lowest figure in nearly five years.

Vacancies data broken down by industry showed that nearly one-in-five (125,000) of unfilled job positions were in the human health and social work activities category. Professional scientific & technical activities (75,000) and accommodation & food service activities (71,000) ranked second and third in terms of the number of overall job vacancies.

Source: S&P Global Market Intelligence, ONS © 2026 S&P Global.

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To talk about how Jo Thompson Recruitment can help you with your resourcing needs, please email us at info@jtrltd.com or give us a call at 01635 734975 for more details.