Permanent jobs are becoming harder to come by in the UK
Key Points
- UK permanent job placements fell at the fastest pace since July 2025 in May, according to the KPMG/REC Report on Jobs.
- The permanent placements index dropped to 44.1 from 47.5 in April, while the temporary billings index rose to 52.2, the strongest since April 2023.
- Permanent placements have now fallen for 44 consecutive months, the longest contraction since the survey began in 1997.
- REC chief executive Neil Carberry and KPMG's Jon Holt linked the slowdown to economic uncertainty and the war in Iran.
- Vacancies fell at the sharpest pace since February, with retail seeing the steepest declines.
Permanent job placements in the UK fell at their fastest pace since July 2025 in May, as employers pulled back on permanent hiring while increasing their use of temporary staff, according to a monthly survey published on Monday (8 June) by KPMG and the Recruitment and Employment Confederation (REC).
The survey’s index of permanent placements dropped from 47.5 in April to 44.1 in May, reflecting a greater share of recruiters reporting a decline in activity. The index of temporary billings rose from 50.4 to 52.2, the strongest reading since April 2023.
Permanent staff placements have now fallen for 44 months in a row, the longest period of contraction since the survey began in 1997.
Neil Carberry, Chief Executive of the REC, said the shift reflected a lack of confidence that made employers wary of commitment, even as they needed to staff new projects. He added that the outbreak of war in Iran earlier this year choked off the recovery that had been under way.
Jon Holt, KPMG’s Group Chief Executive, said ongoing global and domestic uncertainty was making businesses more cautious, and that this was increasingly reflected in hiring decisions.
He noted that while some employers were turning to temporary contracts to retain flexibility, many permanent hiring plans were being delayed or put on hold.
Widespread cost-cutting
Large listed recruitment firms have reported a similar move towards temporary hiring. James Hilton, Finance Director at Hays, said temporary and contracting work generated almost two-thirds of net fees in the firm’s global business and 62% of net fees in the UK in the first three months of 2026 – the highest share in two decades.
Hilton said this reflected widespread cost-cutting and uncertainty over demand, but also a desire among candidates for flexibility, with interim appointments increasingly seen at senior level in areas such as finance.
The Swiss-based recruitment group Adecco also reported growth in flexible placements and a steep drop in permanent placements across its global business in the first quarter of 2026, which Chief Executive Denis Machuel attributed to the uncertain economy.
The survey showed overall demand for both permanent and temporary staff weakened in May. Vacancies fell at the sharpest pace since February, driven by a sharper drop in permanent roles.
There were fewer permanent vacancies in all sectors except healthcare, with the steepest declines for both permanent and temporary vacancies seen in retail. The availability of candidates for both permanent and temporary roles also rose faster than in April.
