UK permanent hiring showed its clearest sign of stabilisation in nearly four years in July, according to the latest KPMG and Recruitment and Employment Confederation survey.
The monthly permanent placements index rose to 50.0 from 49.1, the neutral point separating growth from contraction. Reuters reported that the move brought to an end a 45-month run in which permanent staff appointments had been declining.
For employers and jobseekers, the result is encouraging but not yet evidence of a broad hiring rebound. A reading of 50.0 indicates that permanent placements were broadly unchanged rather than expanding. It nevertheless marks a notable shift after an unusually long period of recruitment weakness.
UK permanent hiring moves from contraction to stability
The KPMG-REC Report on Jobs is compiled by S&P Global from responses to recruitment and employment consultancies across the UK. Its diffusion indices measure whether activity is rising, falling or remaining broadly unchanged from the previous month.
In June, permanent appointments were still declining, although at only a marginal pace. The REC’s previous monthly release described the fall as the softest in three months, while temporary billings had risen at their quickest rate since April 2023.
July’s move to 50.0 therefore continues a gradual improvement rather than representing a sudden reversal. The latest figures suggest employers may be becoming less inclined to cut back permanent recruitment, even if many remain cautious about committing to larger headcounts.
Pay pressures are picking up
The latest survey also indicated a faster rise in starting salaries. That matters because pay offers can provide an early signal of where employers are struggling to secure people with the skills they need.
Previous KPMG-REC reports had already shown pay growth strengthening as firms competed for sought-after candidates, despite a wider increase in the supply of people looking for work. The combination of stabilising permanent placements and firmer starting salaries points to a labour market that is becoming less uniformly weak.
That does not mean conditions have improved equally across occupations or regions. Recruitment surveys can move before official employment statistics, and they capture activity reported by recruitment consultancies rather than the whole labour market. The next Office for National Statistics labour market release will provide a broader test of whether the improvement is being reflected in employment, unemployment and earnings data.
What it means for candidates
For people considering a move, the immediate message is one of reduced deterioration rather than a return to a candidate-led market. Employers are still likely to be selective, particularly where budgets remain tight or demand is uncertain.
Yet a hiring market that has stopped contracting can change the balance at the margin. Businesses that delayed recruitment may begin reopening roles, while workers who had been reluctant to move could see a wider range of opportunities if the trend holds through late summer.
British Careers reported last month that UK vacancies were still falling as hiring caution persisted. The latest KPMG-REC reading does not overturn that wider picture, but it provides a more positive signal on actual permanent placements.
Confidence remains the key variable
Callum Licence, head of advisory at KPMG UK and Switzerland, said businesses would be looking for evidence that the new government’s policies can translate into greater confidence to invest and hire, according to Reuters.
That confidence question is likely to determine whether July becomes a turning point or simply a pause in a long decline. Recruitment decisions are closely linked to expectations about demand, costs and policy. Firms that feel more certain about the outlook are more likely to convert temporary staffing or delayed vacancies into permanent roles.
For now, the strongest conclusion is a limited one: permanent hiring stopped falling in July. After 45 months of contraction, even stability is a meaningful change, but sustained growth will require several months of stronger evidence.
