Permanent job numbers in the UK fell at a faster rate in April while temporary hires rose for the first time in three months, according to the latest jobs report from KPMG, S&P Global, and the Recruitment and Employment Confederation (REC).
Overall demand for staff has fallen in the UK for the thirtieth consecutive month, although the report notes that “the rate of contraction continued to ease” to its slowest level for almost a year.
Correspondingly, the overall availability of workers saw a “marked” increase in April, with redundancies and lower staff demand among the chief factors, although again there was a slowdown in supply compared to 2025.
The report blames the decline in permanent job numbers on the Iran war and rising business costs, with firms taking a more flexible approach to hiring in response to ongoing uncertainty.
Jobs recovery disrupted by war in Iran
The UK jobs market has been weak since 2022, when overall appointments began declining following a post-Covid recovery in hiring.
The chart below shows that permanent placements in the UK have been declining at various rates for four years, while temporary postings have seen some phases of modest (albeit declining) growth over the same period.
The latest report from KPMG, REC and S&P Global shows that the UK is once again in one of these phases, with temporary hires rising modestly in April.
What the report also reveals is that, having shown signs that permanent appointments might return to positive growth, the war in the Middle East has heaped additional pressures on British businesses.
As such, temporary postings are again outweighing permanent recruitments, indicating an ongoing rebalancing of organisational workforces in favour of non-permanent workers.
“The small signs of recovery in the jobs market may have been disrupted in April by the uncertainty stemming from the conflict in Iran,” said Jon Holt, CEO and UK Senior Partner at KPMG.
Holt also notes in the report, while conditions are “more favourable” than they were for most of last year, uncertainty has resulted in the deferral of hiring decisions and the learning towards temporary recruitment.
He said, “As business resilience becomes a greater priority, that flexibility may help avoid a deeper downturn in the labour market and support growth plans, even as [companies] brace for further economic headwinds.”
In a similar vein, REC CEO Neil Carberry said that businesses will be concerned about inflation, borrowing costs, and supply chain disruption, with temporary workers one way of alleviating pressures.
“The temporary sector showed its strongest growth in two and a half years last month,” he said. “Government can do more to help firms feel able to commit to permanent hiring too, by addressing the cost of doing business – the key domestic contributor to hiring activity.”
AI playing a role in UK’s jobs market
Despite a relatively disappointing national picture, the KPMG report finds that London enjoyed its second consecutive month of permanent placement growth in April, hitting a 43-month high.
In parallel, temporary employment suffered a fifth consecutive decline in the capital, with KPMG’s Anna Purchas noting that “demand for temporary workers is still low, and candidate availability remains elevated.”
While REC and KPMG stress the economic factors underlying the national decline in permanent placings, other data indicates that AI rollout may be playing a role in declining employment levels in the UK.
In January, Morgan Stanley published a study which found that, among developed economies, the UK has been the hardest hit in terms of AI-related job losses, which amounted to 8% over the previous 12 months.
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