Each month, we share the latest labour market trends based on the ‘UK Report on Jobs’ from KPMG and the Recruitment and Employment Confederation (REC), alongside insights from our teams across the 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
Marginal downturn in permanent placements for the second month in a row
Candidate availability rises sharply
Starting salary growth dampens
PERMANENT PLACEMENTS FALL MARGINALLY
The number of permanent placements fell again in March, however, for the second month in a row, this was at the softest rate seen during this current long-term period of decline. The rate of contraction was similar across February and March – another marker of potential stabilisation in the market, despite the uncertainty caused by unrest in the Middle East.
CANDIDATE AVAILABILITY RISES SHARPLY
Reports from March show that candidate availability has risen at the steepest rate of 2026 so far, with reasons largely cited as redundancies and job scarcity.
STARTING SALARY GROWTH SLOWS
As candidate supply rises, coupled with employers’ restricted budgets, March saw the weakest recorded growth in starting salaries for permanent roles in five months, and it was only a marginal growth compared to February. It was a similar picture for temp wage inflation, too.
Neil Carberry, REC Chief Executive, said:
“The Gulf Conflict provided a headwind to hiring in March, but this did not stop the trend of stabilisation that has defined 2026 so far. The effects of a longer-run crisis are unclear, but the resilience of the jobs market last month was heartening. Permanent placements showed their weakest contraction in three years. Modest growth in London, which usually runs ahead of the national trend, is particularly heartening. Likewise, temporary recruitment fell more slowly than in February, with a sustained upturn in the Midlands a clear trend through the winter.
“Business prospects for 2026 remain finely balanced, and confidence will be key. Households and businesses are still sitting on cash that might be put to work in the economy if the climate is right, boosting growth and particularly helping struggling consumer-facing sectors like retail and hospitality. The key way government can help is to tackle the root cause of the cost of living squeeze – the rising cost of doing business. Greater pragmatism on key policies, including the unworkable approach that has been taken on guaranteed hours, is needed now.”
SUMMARY
Following Neil’s comments, we can take positives from the apparent continued stability; in the trend of slowed contraction in the number of permanent placements and the modest growth in London regions, which are often seen as an early indicator of future trends.
It was suggested earlier in the year that businesses would delay hiring plans until the Spring, which, as we now enter this new season, together with these early signs of positivity, we’re faced with a new raft of geopolitical uncertainty.
It’s hard to predict exactly whether caution will prevail or whether we’ll see any significant changes even in the face of the unknown. However, especially if we are on the cusp of a turning tide, it becomes even more vital for the Government to do all it can to ensure policy encourages business confidence and, in turn, create the right conditions to give the job market a needed boost.
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