After several years of difficult headlines around the UK jobs market, there are finally some encouraging signs.
The latest KPMG and REC UK Report on Jobs found that permanent placements increased in August for the first time since September 2022. Temporary and contract activity also continued to grow, with billings increasing for the fifth month in a row.
That sounds positive.
And it is.
But dig a little deeper and the picture is much more nuanced.
Vacancies are still falling; there are more people looking for work and businesses remain cautious about committing to new headcount. At the same time, employers are increasing salaries to secure candidates with the skills they really need.
So, what does that actually mean if you are hiring?
Confidence is returning, but slowly
August marked the first increase in permanent placements for almost four years.
Recruiters linked that improvement to businesses expanding capacity, winning new contracts and becoming slightly more confident about the outlook. The increase was only marginal, however, and some employers are still holding back because of wider economic uncertainty.
For employers, this probably means neither rushing to hire nor continuing to sit on every vacancy indefinitely.
The market appears to be moving towards a more active position, and businesses that know they will need people over the coming months may benefit from beginning those conversations now.
Particularly if the person you need has specialist experience.
More candidates does not automatically mean easier recruitment
This is perhaps the most important takeaway from the report.
Candidate availability increased again in August, with the overall supply of workers rising at its fastest rate for three months. Redundancies, fewer available vacancies and concerns around job security have all contributed to more people entering the market.
On the surface, that should make hiring significantly easier.
In some cases, it will.
But a larger candidate market is not necessarily the same thing as a larger relevant candidate market.
You may receive more applications, while still finding relatively few people with the combination of skills, experience, salary expectations, location and working preferences the role requires.
The report itself highlights that distinction. Despite overall candidate availability increasing, recruiters were still reporting shortages in areas including Marketing, Communications, Project Management, Creative and UI/UX skills.
This is why application volume alone is a poor measure of how easy a vacancy will be to fill.
Good people can still command a premium
Another interesting signal is what is happening to pay.
Starting salaries for permanent hires increased at their fastest rate since January, while temporary pay also continued to rise.
Recruiters specifically reported businesses increasing salary offers to attract and secure highly skilled or niche candidates.
That is worth paying attention to.
It would be easy to assume that a market containing more available candidates gives employers greater negotiating power.
That may be true for some positions, but it does not necessarily apply to the people everybody wants.
If the role requires a scarce skillset, employers still need to understand the market and make sure the package is competitive.
A £5,000 saving on salary can quickly become expensive if the vacancy remains open for several additional months or the strongest candidates consistently turn it down.
Flexible hiring remains part of the picture
Temporary and contract recruitment is continuing to perform more strongly than permanent recruitment.
August marked the fifth consecutive monthly increase in temporary billings, with growth at its second-fastest level since April 2023. Recruiters cited both increased contract work and a continued preference among some clients for temporary staff.
That fits with what we are seeing across the market.
Businesses still have projects to deliver and skills gaps to solve, even when they are not ready to permanently increase the size of the team.
Freelance or contract talent can give employers a way to keep that work moving while longer-term plans become clearer.
That does not mean temporary should replace permanent hiring. In fact, one of the more encouraging signals in this report is that the two appear to be starting to work alongside each other again rather than flexible recruitment simply compensating for a lack of permanent hiring.
The market is becoming more selective, not necessarily easier
Perhaps the best way to describe the current position is that there is more choice, but employers still need to know what they are looking for.
Before going to market, be clear about:
- The skills genuinely required from day one
- What could reasonably be learned after joining
- The outcomes the person needs to achieve
- Whether the salary reflects the current market for those skills
- Whether the requirement really needs to be permanent
- How quickly you can move when the right person appears
There may be more candidates available, but that makes good qualification even more important.
A hundred applications are only useful if you can identify which three or four people genuinely fit what the business needs.
Some green shoots, but no room for complacency
The August data is encouraging.
Permanent placements have finally started to move in the right direction; flexible hiring remains active and there are more candidates available to employers.
But vacancies remain subdued, confidence is still fragile and specialist skills continue to command competition.
For hiring managers, that means this is probably not the moment to assume recruitment has suddenly become easy.
It is a good moment to make sure your hiring plans are clear.
Thinking about recruiting over the coming months? We are always happy to talk through the current market, what we are seeing within your particular skill area and the most appropriate way to approach your next hire.
Source: KPMG and REC, UK Report on Jobs, September 2026. The report is based on responses from around 400 UK recruitment and employment consultancies and measures month-on-month changes in recruitment activity.
