The UK jobs market is showing signs of stabilisation, with a report revealing that a 45-month decline in permanent job placements has finally ended. The number of vacancies for temporary workers has also risen for the first time in two years, according to research by the Recruitment and Employment Confederation (REC) and accountancy firm KPMG.
Permanent placements stabilise
Recruiters reported that the number of job hunters placed in permanent roles stabilised in July, following 45 consecutive months of decline. However, demand for permanent staff remained subdued amid political and economic uncertainty and higher labour costs, the report noted.
The stabilisation marks a significant milestone, as it ends the longest recorded period of contraction in the permanent placements index. This provides a glimmer of hope for those who have struggled to find permanent work since around 2022.
Temporary work on the rise
Employers remain cautious about taking on permanent workers, with demand for temporary staff growing modestly but at the quickest rate since August 2023. This reflects a continued preference for flexible hiring approaches.
Conversely, the number of people looking for work rose again last month, extending a run of increases spanning nearly three-and-a-half years. The report linked this to redundancies and a lack of job opportunities.
Sector variations
Demand for permanent workers was sharpest among nurses, medical staff, and car workers, while the biggest declines were seen among shop workers and those in hotel and catering roles.
Expert reactions
Maxine Bligh, the REC's chief membership and innovation officer, said: “Rays of light are beginning to break through for the job market as employers revive hiring plans. That makes it all the more important that the government takes decisions now that builds business confidence and momentum in hiring.
“This means action to bring the Industrial Strategy to life and exercising pragmatism around the implementation of the Employment Rights Act, particularly guaranteed hours proposals. The Autumn Budget is a great opportunity to give businesses the shot of confidence they need to hire and invest.”
Callum Licence, group head of advisory at KPMG UK and Switzerland, said: “Despite ongoing uncertainty it’s encouraging that businesses are starting to press ahead with investment, which means across the board we are starting to see the data moving in the right direction. This is most pronounced in the continued rise of temporary work, where employers have been looking at flexible approaches and hiring has been growing for several months, and permanent hiring is starting to turn a corner.
“Over the past 45 months we have seen the longest recorded period of contraction in the permanent placements index, so to finally have it stable is a big milestone. With a new Government in place, businesses will be looking for signs that the new policies can translate into greater confidence to invest and hire”.
