KPMG It said the latest monthly chart for the UK labor market revealed a mixed picture, with permanent staff appointments falling at the fastest rate since January and temporary hires showing temporary signs of life. According to the May 2026 KPMG and REC UK Business Report, uncertainty Iranian and rising operating expenses caused many employers to pull back on long-term hiring decisions in April.
Data Data collected between April 9 and 24 from nearly 400 recruitment consultancies compiled by S&P Global found that overall demand was: workers It eased slightly compared to the previous month, but continued to shrink for the 30th consecutive month.
KPMG He added that the pace of decline was at the slightest in almost a year, but permanent vacancies continued to fall more sharply than temporary ones.
In response, some organizations have turned to flexible staffing to maintain momentum in their expansion plans without being tied to permanent headcount.
Provisional bills increased modestly for the first time in three months, signaling a marginal preference for short-term contracts in the current cautious environment.
KPMG He also noted that, in the meantime, candidate availability has increased again as layoffs and reduced hiring have increased the job seeker pool.
While the increase in supply was less pronounced than in March, it remained significant and outpaced typical trends seen throughout much of 2025. Wage pressures remained light.
Starting salaries for permanent positions increased for another month, but the pace of growth was slightly faster than the five-month low recorded in March 2o26remained well below long-term averages. The temporary wage increase followed a similar pattern; has reached higher levels but still reflects historically weak momentum.
Regional differences clearly emerged. Permanent settlements fell sharply in the Midlands and south England but showed marked improvement in London and the North.
Temporary billings followed the opposite trend; It increased in the Midlands and the South, while it decreased in the capital and northern regions.
Industry trends also differed. The only category where demand for permanent staff was stronger, with solid growth, was engineering. In contrast, hotel and food and beverage services, along with retail, saw the sharpest contractions in permanent opportunities.
On the temporary side, nursing, medical and maintenance positions, and blue-collar positions experienced an increase in demand, while engineering openings remained steady, with retail recording the largest decline.
John HoltGroup Chief Executive Officer and England The KPMG Senior Partner noted that the first green shoots in the job market were disrupted by the effects of the Iran conflict.
While conditions are more supportive than they were for much of 2025, he observed, many leaders are delaying permanent hires and opting for greater workforce flexibility to guard against further risks. economic shocks.
Neil CarberryChief Executive of the Confederation of Recruitment and Employment emphasized: improvement The potential impacts of the situation in the Gulf on inflation, borrowing costs and supply chains had lost momentum earlier in the year.
He emphasized the flexibility of temporary and contract work as vital to business continuity and job creation.
Carberry added that government action to ease the cost of doing business (especially by avoiding poorly designed employment rules) could encourage safer permanent recruitment.
research reportBased on diffusion indices, where readings above 50 signal growth and readings below 50 indicate contraction, it underscores the labor market’s ongoing sensitivity to both domestic cost pressures and international instability. KPMG concluded: research report Although temporary hiring will act as a buffer, a sustainable recovery in permanent employment will likely depend on clearer economic signals in the coming months.
