UK hiring tilt favours temporary roles

Britain’s jobs market weakened in April as employers cut back on permanent recruitment while turning to temporary staff to manage uncertainty, rising business costs and disruption linked to the Iran conflict.

Permanent staff placements fell at the sharpest pace since January, reversing part of the improvement seen earlier in the year. The permanent placements index dropped to 47.5 in April from 49.2 in March, staying below the 50 mark that separates growth from contraction. Temporary hiring moved in the opposite direction, with the temporary billings index rising to 50.4 from 48.4, marking the first expansion in three months.

The KPMG and Recruitment and Employment Confederation Report on Jobs, compiled by S&P Global from around 400 recruitment and employment consultancies, showed that employers were delaying long-term hiring decisions but still needed flexible labour to keep operations and expansion plans moving. Data were gathered between 9 and 24 April, a period marked by heightened concern over energy prices, supply chains, inflation and borrowing costs.

Businesses have been dealing with a difficult mix of cost pressures and uncertain demand. Higher employment costs, weak consumer confidence and concerns over disruption from the Gulf conflict have made companies more cautious about adding permanent staff. Temporary recruitment has benefited from that caution, as employers seek workers who can be deployed quickly without committing to fixed headcount growth.

Demand for workers continued to fall in April, extending a downturn in vacancies to 30 consecutive months. The rate of decline, however, was the softest in nearly a year, suggesting that the market remains weak but is no longer deteriorating as rapidly as it did through much of 2025. Permanent vacancies fell more sharply than temporary roles, underlining the shift towards flexible labour.

Candidate availability rose markedly during the month, helped by redundancies and weaker hiring appetite. Permanent worker availability increased slightly faster than temporary worker supply, giving employers a wider pool of applicants and limiting pressure to lift salaries. Starting salary growth for permanent roles strengthened from March’s five-month low but remained mild by historical standards. Temporary wage growth also improved but stayed subdued.

Regional trends showed a divided labour market. Permanent placements rose in London and the North of England, while the Midlands and the South of England recorded substantial declines. Temporary billings increased in the Midlands and the South but fell in London and the North, indicating that hiring behaviour is being shaped by local sector exposure, project cycles and cost pressures rather than a single national trend.

Sector patterns were also uneven. Engineering was the only monitored category to record growth in demand for permanent workers, supported by infrastructure, energy, manufacturing and advanced technology needs. Hotel and catering, along with retail, saw the steepest falls in permanent vacancies as consumer-facing employers remained exposed to higher wage bills, rent, energy costs and weaker discretionary spending. Temporary demand was stronger in nursing, medical and care roles, as well as blue-collar work, while retail recorded the sharpest decline in temporary vacancies.

Official labour-market data added to the picture of a cooling employment environment. The unemployment rate stood at 5.0 per cent in January to March, up 0.5 percentage points on the year but down 0.2 percentage points on the quarter. The employment rate for people aged 16 to 64 was 75.0 per cent, while economic inactivity was 20.9 per cent. Vacancies have been falling since 2022, showing that weaker recruitment is not confined to agency hiring.

The hiring slowdown has implications for the wider economy. A sustained fall in permanent recruitment can weigh on household confidence and consumer spending, particularly if jobseekers face longer search periods or weaker pay offers. At the same time, rising temporary placements may help firms avoid deeper cuts by giving them room to respond to demand without taking on long-term commitments.