The number of UK job seekers riseing to flood the labour market accelerated in August, driven by fresh redundancies and growing anxiety about employment security, even as a separate measure of permanent hiring posted its first expansion in nearly four years. The findings come from the latest KPMG and REC, UK Report on Jobs, compiled by S&P Global from questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.
Total staff availability climbed at its fastest rate in three months. Corporate layoffs and heightened job insecurity pushed more workers into the market, intensifying competition for a shrinking pool of vacancies.
Permanent placements break above neutral for first time since 2022
The permanent placements index came in at 50.5, edging above the neutral 50.0 mark that separates expansion from contraction. It is the first reading above that threshold since September 2022, ending a prolonged period of decline. According to The REC, permanent placements have now stabilised, bringing to a close a downturn that stretches back 45 months to the period of Liz Truss’s premiership.
Temporary billings fared somewhat better, registering 52.4. Cautious employers have continued to favour flexible, short-term arrangements over committing to full headcount additions, a pattern that has persisted throughout the downturn.
Jon Holt, group chief executive and UK senior partner at KPMG, welcomed the data with measured optimism. ‘This is clearly encouraging after such a prolonged downturn in hiring, but the jobs market continues to contract overall,’ he said. With the first Budget from Chancellor John Healey approaching, Holt said the government has an ‘opportunity to turn these green shoots into sustained positive momentum’.
Overall demand for workers falls for 34th consecutive month
Despite the marginal improvement in permanent hiring, the broader picture remains weak. Overall demand for workers fell for the 34th consecutive month, with nationwide vacancies tracked by the Office for National Statistics falling to 707,000. That is the lowest level outside the pandemic since November 2014.
Retail and hospitality recorded the steepest declines in job openings. The public sector contracted across both permanent and temporary roles, adding further pressure to a labour market that is recovering unevenly.
The scale of the UK job seekers rise reflects the dual pressures at work: more people are being pushed out of employment, and those who remain in work are increasingly uncertain about their positions. That combination is lifting candidate numbers even as hiring activity, by most measures, continues to shrink.
Maxine Bligh, interim chief executive of REC, used the occasion to press the government on labour market policy. ‘This is not the time to take the job market for granted. Instead, government should follow through on its commitment to lessen burdens on business,’ she said.
Bligh went further on specific policy concerns, saying that improving momentum across the jobs market meant ‘greater pragmatism on the employment rights agenda, including lessening the gamble the government is taking with its guaranteed hours policy’. She added that the forthcoming Autumn Budget must demonstrate ‘the government is serious about backing business and provides employers with the confidence they need to hire, invest and grow’.
The staffing industry has been watching the guaranteed hours provisions within the Employment Rights Bill closely, concerned that mandating minimum hours guarantees could deter employers from offering temporary or flexible roles at all, precisely the segment of the market that has held up best through the current downturn.
The report’s methodology, drawing on responses from around 400 recruitment consultancies across the UK, gives it broad sectoral and geographic coverage. The August data, showing a UK job seekers rise alongside the first tentative uptick in permanent placements, leaves the labour market at a crossroads ahead of the Budget, with the direction of both hiring and availability likely to be shaped by what the government announces on tax and employment regulation.
