Permanent staff appointments across the UK have fallen again, according to the latest KPMG and Recruitment & Employment Confederation (REC) Report on Jobs, but the pace of decline is showing early signs of easing. The October data indicates that while hiring remains subdued, recruiters are beginning to detect stabilisation after months of uncertainty in the labour market.
The report, compiled from a monthly survey of recruitment agencies nationwide, found that permanent placements continued to decrease in September, though at the slowest rate in almost a year. Temporary staff billings also fell slightly as employers scaled back short-term contracts in response to cost pressures. Recruiters cited weaker client confidence, ongoing budget restraints and a slowdown in new project starts as the key reasons behind the continued caution.
KPMG UK’s Head of Education, Skills and Productivity, Jon Holt, said that “the jobs market is still cooling, but there are hints that it may be approaching a turning point.” He noted that businesses remain wary about making long-term commitments while economic conditions remain unpredictable, yet some sectors — particularly engineering, healthcare and technology — continue to show pockets of resilience.
The report also revealed that vacancy numbers fell for the ninth consecutive month, echoing data from the Office for National Statistics (ONS), which recorded around 717,000 unfilled positions across the UK between July and September 2025. That figure is down by roughly 9,000 from the previous quarter, marking the thirty-ninth consecutive period of decline. Vacancies remain almost 10 per cent below pre-pandemic levels, despite population growth and an expanded workforce.
Recruitment agencies participating in the survey said that while client demand has softened, candidate availability has risen sharply. Many professionals who had remained in their roles during the post-pandemic recovery are now re-entering the job market, either due to redundancy or a desire for more stability. This shift has created a candidate-rich environment, but with fewer roles available, competition for permanent positions is intensifying.
Pay trends have also levelled off. The survey found that starting salaries for permanent hires rose at their slowest pace in two years, reflecting the balance between higher living costs and employer cost controls. The REC noted that businesses are still offering competitive packages for hard-to-fill roles, but there is far less upward pressure on pay than was seen during 2023.
For recruiters, the data points to a market entering a period of recalibration. Agencies are having to work harder to differentiate themselves in a climate where employers are cautious about spending on external hiring services. Many are focusing on developing niche expertise, offering workforce planning advice, and supporting clients with retention and internal mobility rather than pure volume hiring.
REC Chief Executive Neil Carberry said that “while overall hiring is down, the picture is more nuanced than the headlines suggest.” He added that temporary and contract placements remain essential for many employers managing workload fluctuations, and that the current slowdown should be viewed as “a rebalancing rather than a collapse.”
Sectoral performance continues to vary. Demand for technology specialists, medical staff and skilled trades remains comparatively steady, while retail, hospitality and administrative hiring have seen more significant slowdowns. Regional data shows slightly stronger activity in the North of England and the South West, with London recording the steepest decline in new placements.
The long-term outlook, analysts say, will depend on whether business confidence improves in early 2026. If interest rates continue to ease and inflation remains under control, companies may begin to expand hiring plans again. For now, most recruitment firms are preparing for another quarter of subdued growth, focusing on building candidate pipelines and supporting clients with flexible staffing options.
Although the UK jobs market remains under pressure, the latest data offers a glimmer of stability. As Carberry noted, “The worst of the downturn may be behind us — but recruiters should expect a slower, more selective recovery ahead.”