According to the latest joint report from KPMG and the Recruitment & Employment Confederation (REC), the UK jobs market in June 2026 reflected ongoing economic caution amid geopolitical tensions. Compiled by S&P Global from surveys of approximately 400 recruitment agencies, the data highlights a notable shift toward flexible staffing as businesses navigate uncertainty.
Temporary staff billings experienced their strongest expansion in more than three years, signaling heightened demand for short-term workers.
In contrast, placements for permanent roles continued to contract, though the rate of decline eased significantly compared to the previous month.
This pattern underscores a broader preference for agility in hiring, driven by subdued business confidence and efforts to manage costs without long-term commitments.
Overall staff demand weakened more sharply than in May, primarily due to a steeper drop in permanent vacancies.
Redundancies remained common, further boosting the pool of available candidates.
However, this increased labor supply coincided with improved compensation trends.
Employers offered faster rises in starting salaries and wages for both permanent and temporary positions to attract skilled professionals, marking the quickest pay growth since the start of the year—though still below historical averages.
The survey, based on responses collected between 11 and 24 June, indicates that economic and global instability prompted many organizations to prioritize temporary projects.
Permanent appointments declined only marginally, the mildest contraction in three months, suggesting the downturn may be stabilizing.
Candidate availability grew at a solid but slower pace than recent months, as some workers showed reluctance to switch jobs in the current climate.
Regional differences emerged across England. London, the South, and the Midlands saw softer declines in permanent hiring, while the North experienced a return to contraction after a period of growth.
Temporary billings expanded in all monitored regions, with the South recording the most robust increase.
Sectoral variations were also evident. Nursing, medical, and care roles, along with engineering, were the only areas to post gains in permanent staff demand, with healthcare showing the stronger uptick.
Retail faced the steepest fall in permanent openings.
For temporary positions, blue-collar and engineering sectors led growth, while retail, healthcare, and executive/professional categories saw the sharpest reductions.
Lisa Fernihough, Vice Chair of Advisory at KPMG UK, welcomed the positive shifts: businesses are gradually resuming activity after recent pauses linked to international events.
She noted the clear pivot to temporary staffing allows firms to advance projects amid uncertainty, with hopes that stabilizing oil prices and improved conditions will encourage renewed momentum in the coming months.
Neil Carberry, Chief Executive of the REC, described the figures as encouraging after a challenging period.
Temporary and contract work continues to drive activity as companies test demand before committing to permanent expansions.
He emphasized the need for government policies that support businesses rather than adding costs and regulations, pointing to recent measures that have impacted youth employment.
With new leadership on the horizon, Carberry urged collaboration to unlock the UK‘s growth potential.
The KPMG-REC Report on Jobs uses diffusion indices to track changes, where readings above 50 signal expansion and below indicate contraction.
This month’s data offers cautious optimism, pointing to a labor market adapting through flexibility while awaiting broader economic stability. As geopolitical and domestic factors evolve, recruitment trends will likely remain a key barometer of business sentiment.