- The Demand for permanent staff declines at the softest pace in 9 months. Therefore, the permanent talent pool has shrunk
- Perm salaries are starting to increase.
- The best IT talent are remaining in situ; it’s becoming more difficult to entice candidates to move because they’re risk-averse in an unstable economy.
- The vibes for 2026 are that the Tech Industry will see a slight increase as confidence grows post-budget.
This Report on Jobs is unique in offering the most comprehensive guide to the UK labour market, drawing on original survey data from recruitment consultancies and employers to provide the first monthly indication of labour market trends. The main findings for March are:
The Summary
The latest KPMG and REC, UK Report on Jobs survey indicated that permanent staff hiring moved closer to stabilisation in February, while temp billings fell only modestly. At the same time, demand for workers declined at the slowest rate in nine months, driven by a weaker reduction in permanent vacancies.
Pay pressures eased since January, with both starting salaries and temp wages increasing at slower rates. Notably, rates of pay inflation remained below their long-run trends. This coincided with a further improvement in labour supply, with overall candidate availability rising at a sharper pace compared to the start of 2026.
Regional and Sector Variations – The North of England is doing the best!
On a regional basis, permanent placements fell at weaker but solid rates in London and the South of England. Meanwhile, an increase was seen in the North of England, but the Midlands recorded the first decline in three months.
Temp billings declined across all four monitored English areas bar the Midlands. Nevertheless, the growth rate here was the slowest recorded since last August.
Engineering was the only sector to see an increase in demand for permanent staff in February, with declines across the other nine categories monitored by the survey. The Retail and Hotel & Catering sectors saw the steepest reductions in permanent vacancies.
Vacancies decline at softest pace since last May 25
The number of job opportunities across the UK continued to decrease in February. However, the rate of contraction was the slowest recorded since last May, as a weaker drop in permanent vacancies offset a slightly quicker reduction in demand for temporary staff.
Softer increases in rates of starting pay
After hitting a 17-month high in January, starting salary inflation slowed in February. Notably, salaries increased at the softest pace since last October and to a degree that was well below the survey average. Temp wage inflation also weakened from the start of the year, with pay rising modestly overall. Competition for sought-after skills continued to exert upward pressure on pay, yet some recruiters reported that improved candidate supply had limited wage increases.
Further sharp rise in candidate numbers
February data signalled a rapid rise in overall candidate availability across the UK, with the rate of expansion picking up from January’s one-year low. That said, the pace of increase remained slower than the average over 2025. Underlying data indicated that a stronger rise in the supply of permanent workers more than offset the softest expansion in temp candidate numbers since January 2025.