UK hiring downturn eases in January, KPMG-REC report finds

(Sharecast News) - The hiring downturn across the UK eased slightly in January, according to a report out on Monday from KPMG and the Recruitment & Employment Confederation, with candidate availability rising at its slowest rate in a year. While subdued market confidence and pressure on staff budgets continuing to dampen overall recruitment, the rate of decline in permanent placements was its weakest in 18 months, while temporary billings rose for the first time in three months - only the second increase since May 2024.

The KPMG-REC report, compiled from responses from around 400 UK recruitment and employment consultancies, found that the supply of candidates continued to rise but at its softest pace in 12 months, on the back of slowing growth in both permanent and temporary candidates numbers.



January also saw strongest rises in both starting salaries for staff and wages for temp workers, as heightened competition for skills added further upwards pressure on remuneration. Starting salaries increased at their quickest rate in nearly a year and a half, while temp wage inflation hit a 20-month high.

Nevertheless, overall vacancies continue to fall at a relatively sharp rate - even if January saw the second-slowest decline over the past seven months - with the decline in demand for permanent staff still outpacing that for temp workers.

"After a difficult end to last year, it's encouraging to start this year with tentative signs that hiring appetites are beginning to improve as chief execs respond to signs of easing uncertainty by starting to push forward with their plans," said Lisa Fernihough, head of Advisory at KPMG UK.

"Skills shortages in specialist areas continue to impact the market, particularly where competition for talent remains intense. There are parts of the economy poised for investment, and as skills needs align with greater market stability, we could start to see more consistent improvement in hiring as the year progresses."