Temporary hiring in the UK rose for the first time since June 2024 and permanent placements continued to fall, though at a slower pace, according to the latest KPMG and REC UK Report on Jobs.
According to the report, vacancies remain down and candidate supply continues to grow, keeping pay pressures weak. The data indicates a labour market that is stabilising but still uncertain, as employers hesitate to make long-term hiring commitments.
Isio employee benefits partner Mark Jones says the figures reflect the cautious approach many businesses are taking.
He says: “Recruitment activity may be levelling off, but employers are still balancing cost control with the need to retain and motivate the people they already have. Finance teams are scrutinising every spend, and HR leaders are under pressure to show clear, data-driven results from their people strategy.”
Jones says the slowdown offers employers a chance to strengthen people strategies, refine benefits, and build evidence linking wellbeing and engagement to productivity, retention and absence.
“The smartest organisations are using the slowdown to refine benefit design, track wellbeing outcomes, and link these investments directly to productivity, absence and retention data. That evidence wins CFO backing and separates the prepared from the reactive when the market improves.”
He adds that wellbeing, flexibility and targeted support are essential levers for protecting performance when hiring slows.
“Wellbeing, flexibility and targeted support aren’t soft options; they’re the levers that protect performance when hiring slows. Businesses that use this period to strengthen engagement and prove the impact of their people investments will be ready to move quickly once confidence returns.”
