Temporary and contract hiring in the UK just posted its strongest month in more than three years, a signal that employers are managing workforce risk by keeping headcount flexible rather than locking in permanent commitments, even as pay pressure for scarce skills keeps climbing.
The KPMG and REC UK Report on Jobs for June, compiled from roughly 400 UK recruitment and employment consultancies surveyed between June 11 and 24, found temp billings grew at the fastest rate since April 2023. Permanent placements kept falling, but at the slowest pace in three months, even as overall demand for staff weakened at a quicker rate. Starting pay for both permanent and temporary roles rose at its strongest rate since January, though growth stayed below the survey’s long run average.
“It’s encouraging to see some of the hiring data improve in June. Although permanent placements are still falling, the pace of decline is easing,” said Lisa Fernihough, KPMG UK’s vice chair advisory. REC chief executive Neil Carberry called the figures “truly hopeful signs” after what he described as “a long recruitment winter,” with temporary and contract work “once again” leading the way.
For talent acquisition leaders, the pattern reads less like a recovery than a hedge. Employers are still willing to pay up for the specific skills they need, which is why starting salaries keep climbing even as open permanent roles shrink, but they remain unwilling to convert that need into a fixed cost hire. That combination, tight competition for skilled workers layered on top of cautious balance sheets, is the same dynamic straining the hiring signals recruiters rely on elsewhere in the market. Organizations without a formal contingent workforce program, procurement rules, rate cards, and a clear path to convert temp to permanent, will pay a premium to staff up on short notice, then lose the workers they like most to competitors who move faster to convert them.
Source: KPMG UK
