UK permanent hiring has stopped shrinking for the first time in nearly four years, according to the latest KPMG and Recruitment and Employment Confederation (REC) UK Report on Jobs, released August 10. The data gives HR and talent-acquisition teams the clearest signal yet that the labor market is turning.
The permanent placements index stabilized in July after a 45-month contraction dating to the aftermath of Liz Truss’s 2022 premiership, the longest downturn on record for the survey. Temp billings rose for a fourth straight month, among the strongest gains in three years, while temp vacancies increased for the first time in two years. Starting salary inflation hit a six-month high and temp wage growth reached a 26-month high. London and the Midlands posted renewed permanent-hiring growth, with London nearing a four-year high, while the South and North of England still recorded declines. Nursing, medical, and care roles led permanent demand; retail and hospitality saw the sharpest drops.
What it means for the HR leader
Callum Licence, KPMG UK and Switzerland’s group head of advisory, called the stabilization “a big milestone” after the longest contraction in the index’s history. Maxine Bligh, REC’s chief membership and innovation officer, said “rays of light” are breaking through as employers revive hiring plans, but pressed the government on the Employment Rights Act’s guaranteed-hours proposals and the Autumn Budget to sustain momentum.
The recovery lands as employers narrow where they source talent. Skilled worker visa applications have fallen 39 percent as the UK tightens overseas-hire routes, even as it moves to expand a narrower global talent visa to more than 100 employers. Read together, the data suggests employers rebuilding permanent headcount will lean on domestic pipelines and a smaller pool of high-skill visa routes, not a broad reopening to overseas hiring. HR teams planning 2027 workforce budgets should treat this stabilization as fragile, not a floor.
Source: REC
