Permanent Placements Rise for First Time Since September 2022
The UK recruitment market has delivered its clearest sign of improvement in almost four years, with permanent staff appointments increasing for the first time since September 2022.
The latest KPMG and Recruitment & Employment Confederation (REC) UK Report on Jobs found that permanent placements increased slightly during August, ending a prolonged downturn in permanent hiring.
The Permanent Placements Index increased to 50.5, moving above the 50.0 level that separates growth from contraction.
Temporary recruitment also remained positive, with temp billings increasing for a fifth consecutive month. The rate of growth was the second-fastest recorded in more than three years, as employers continued to make greater use of temporary and contract workers.
London and Midlands Record Permanent Hiring Growth
The improvement was not evenly spread across the country.
Permanent placements increased in London and the Midlands during August, while recruitment activity continued to decline in the South and North of England.
This follows an encouraging July for the capital, when London recorded its strongest increase in permanent placements for almost four years.
The figures provide further evidence that recruitment conditions are improving in parts of the UK after an extended period of employer caution.
There were also signs of specialist demand. Permanent vacancies increased in Engineering and Accounting/Financial, although demand declined across the other eight sectors monitored by the REC/KPMG survey.
Vacancies Continue to Fall Despite Hiring Improvement
The latest figures do not, however, signal a return to a recruitment boom.
Overall demand for staff declined for the 34th consecutive month in August. Although the contraction was the second-weakest recorded in almost two years, vacancies are still falling.
Candidate availability also increased at its fastest rate for three months, with redundancies, fewer job opportunities and concerns over job security contributing to more people looking for work.
For recruitment agencies, this creates a market where employers have greater candidate choice but competition remains strong for people with specialist and niche skills.
That competition is also influencing pay. Starting salaries for permanent workers increased at their fastest rate since January, while temporary wages continued to rise.
Employers Signal Stronger Hiring Intentions for Q4
Separate research from ManpowerGroup provides further evidence that employer confidence has improved compared with a year ago.
Its latest Employment Outlook Survey puts the UK's Net Employment Outlook at +23% for Q4 2026, more than double the +11% recorded in Q4 2025.
Four in ten UK employers surveyed expect to increase staffing levels during the final quarter of the year, compared with 17% expecting to reduce their workforce.
Importantly, employers across all nine sectors surveyed expect staffing levels to increase.
For the recruitment industry, some of the sector results are particularly encouraging.
Construction and Real Estate recorded an 18-percentage-point improvement in hiring intentions compared with a year ago, while Trade & Logistics improved by 19 points. The Information sector recorded the strongest overall Q4 hiring outlook at +34%.
ManpowerGroup also linked improving regional demand to continuing investment in areas including infrastructure, technology, energy and defence.
Is the UK Recruitment Downturn Finally Bottoming Out?
After almost four years of declining permanent placements, the August figures represent an important milestone for the recruitment industry.
There are now several positive indicators: permanent placements have returned to growth, temporary billings are increasing, starting salaries are strengthening and employers are reporting substantially better hiring intentions than a year ago.
But the recovery remains fragile.
Vacancies are still declining and candidate availability continues to increase, meaning recruiters are operating in a considerably more competitive market than during the post-pandemic hiring boom.
The coming months will therefore be important.
If improving employer confidence begins to translate into sustained vacancy growth, August could prove to have been a turning point for UK recruitment.
For now, the evidence suggests the market is stabilising rather than booming – but after nearly four years of declining permanent placements, that represents a significant change in direction.
Whether you're exploring your next move or hiring experienced recruiters, discover the latest Rec2Rec jobs and specialist recruitment opportunities on My Recruiter Jobs.
Browse Recruitment Consultant Jobs from leading recruitment agencies and employers across the UK.
My Recruiter Jobs