KPMG UK has recently noted that recruitment consultancies signaled a relative improvement in hiring conditions in October of 2025. This, according to the KPMG and REC, UK Report on Jobs survey, which is compiled by S&P Global. Temp billings have reportedly expanded for the first time since June 2024 (slightly), while the downturn in permanent placements “eased for the fourth straight month.” Despite this, recruiters said that employers were now fairly “hesitant to commit to new hires amid a weaker economic climate and uncertainty” over the upcoming government Budget.
As a result of this, KPMG UK said that vacancies have now continued to fall at a historically “marked pace.”
Redundancies and fewer work opportunities reportedly drove further rapid increases in candidate supply, with permanent and temporary staff availability rising “at rates that were among the quickest since 2020.”
Pay pressures therefore remained weak, with “starting salaries rising only slightly, while temp pay broadly stagnated.”
The report is compiled by S&P Global from responses to questionnaires that were reprotedly sent “to a panel of around 400 UK recruitment and employment consultancies.”
October survey data signaled “improvement in recruitment conditions across the UK, with temp billings rising for the first time since June 2024, while permanent staff appointments fell at a weaker pace.”
Though marginal, the uptick in temp billings “contrasted with a solid reduction in September. The decline in permanent placements, “though marked, was the softest recorded in 15 months.” Recruiters frequently mentioned that uncertainty over the “economic outlook and the upcoming government Budget continued to weigh on hiring decisions.”
UK recruitment consultancies signaled a further marked “reduction in demand for staff at the start of the fourth quarter.” This was despite the “rate of decline easing to the softest in three months.”
Data broken down by job type indicated that “permanent vacancies continued to fall at a steeper rate than temporary roles.”
The number of people seeking new roles continued to rise at a historically sharp rate in October, despite growth easing for the second straight month.
Moreover, the increase in candidate numbers was among the steepest seen since late-2020, when the pandemic “drove a rapid rise in the supply of labour.”
Steep upturns were seen for both permanent and temporary staff availability, which were “in turn linked to redundancies and fewer job opportunities.”
A combination of lower demand for workers and rising supply meant that pay pressures remained weak in October. Starting salaries for permanent staff rose only marginally, with “the rate of inflation lifting only slightly from September’s more than four-and-a-half year low.” At the same time, temp pay was broadly stagnant following a one-year period of growth.”
Permanent staff appointments declined across “all four monitored areas of England, with the North of England seeing the steepest rate of contraction.”
A solid increase in temp billings was “seen in the Midlands, while a marginal rise was recorded in the North of England.”
London and the South of England meanwhile “registered notably softer reductions.”
Demand for permanent workers increased “across the Accounting/Financial and Engineering sectors in October, but fell elsewhere.” The steepest reductions in permanent vacancies were “once again seen in the Retail and Hotel & Catering categories.”
The only sector to see increased demand “for short-term staff in October was Blue Collar.” Across the nine sectors that saw vacancies decline, the most pronounced “fall was in Retail, while Engineering saw the softest reduction in demand.”
Jon Holt, Group Chief Executive and UK Senior Partner KPMG, said:
“Economic uncertainty continues to weigh heavy on business, but further stabilisation in the jobs market last month indicates that a Budget that builds business confidence, could be a catalyst for renewed hiring. We know from our recent CEO Outlook that chief execs remain upbeat about their growth prospects, and the rise in temporary hiring indicates that opportunities are increasing – there just aren’t enough strong signals currently for bosses to commit to building their workforce on a more permanent basis. As we expect both interest rates and inflation to fall further in 2026, we may finally see hiring start to grow more steadily.”
Neil Carberry, REC Chief Executive, said:
“Today’s data reflects the more positive outlook we have been hearing from recruiters since the start of the autumn. They aren’t exuberant – this is just a more stable market. With temporary hiring edging into growth and a better permanent hiring number than we have seen for some time, we can hope that the long period of retrenchment we saw last into the summer, is starting to ebb away. But we have been here before – there was a similar mood in the jobs market before the Chancellor’s Halloween Budget last year. The huge surprise increase in payroll taxes then shocked the market and we have seen the results of that, as businesses predicted then, in higher unemployment and redundancy. As we go into Budget 2025, there can be no repeat. If Government cares about growth, as it claims, measures must stoke business investment, not deter it.”
As noted in the update:
“The report today is the best we have seen since the summer of 2024. There is a broader base of demand forming, from accounting and finance to logistics and IT roles. The Budget must give employers confidence to invest, with a focus on unlocking potential through delivering on skills reform, supporting business investment and reforming the approach to the Employment Rights Bill, which needs a dose of practicality and realism.”