Every month, we share the latest labour market trends based on statistics from the ‘UK Report on Jobs’ by KPMG and Recruitment and Employment Confederation (REC), as well as our own first-hand experience from within our regions.
The report is compiled by S&G Global, based on a monthly questionnaire sent to a panel of approximately 400 UK recruitment and employment agencies – including ourselves.
Key Points
January stats potentially signal improvement in hiring conditions
Temporary recruitment rises
Candidate availability increases – but at the slowest rate for a year
Permanent recruitment still in downturn amid lacking employer confidence – but is change on the horizon?
SETTING THE TONE FOR 2026?
The first stats of 2026 show some signs of the market stabilising – is this the January effect, or is it setting the tone of what’s to come for the year ahead?
INCREASE TEMPORARY RECRUITMENT
For only the second time since May 2024, temp billings rose, with the REC speculating that this could be an early sign of hiring regaining momentum. The rise has been driven by an increased demand for blue-collar roles, offsetting the continued decline in other sectors. The sharpest rise was seen across the Midlands region but the South region also saw a notable increase.
CANDIDATE AVAILABILITY CONTINUES TO RISE
Fewer job opportunities and redundancies continue to be cited as the driver behind the increasing number of candidates out of work. However, the rate of increase slowed to the softest level in the last 12 months.
PERMANENT RECRUITMENT
The headline statistic shows permanent recruitment remains in a downturn, with employers lacking confidence in the market and budget constraints persisting. Yet, the downturn has slowed to the softest rate in 18 months, and in some sectors – namely, Engineering, the decline was minimal. Again, the REC are suggesting this could signal the tide is starting to turn.
SUMMARY
Last month, we wondered what the first set of figures for 2026 would hold. Whilst the headline figures are much the same, when you look beneath the surface, there have been subtle shifts that could signal change is on the horizon.
Neil Carberry, REC Chief Executive, said:
“There have been increasing signs from businesses as we enter 2026 that uncertainty on hiring plans is giving way to action. That does not mean a general hiring upswing, but the “wait-and-see” period seems to be ending. Rising temp billings and a levelling off in the permanent market speak to these clearer plans. REC members across the country report a change in tone since the start of the year.
“The decisions firms are now making involve lots of trade-offs, such as whether to create jobs in the UK or elsewhere, or which jobs need the human touch as opposed to an automated solution. A growing, inclusive economy requires high levels of employment – a focus on encouraging firms to create jobs rather than discouraging that investment is more important than ever. So far, the Government has struggled to convince businesses it wants them to hire. That has to change in the decisions that are made this year if we are to avoid a continued rise in unemployment.”