UK Recruitment Market: Hiring Trends in October 2026

Permanent placements and temporary billings both declined in October, while employers continued to pull back on vacancies, according to the latest KPMG and REC UK Report on Jobs.

The UK jobs market lost further momentum in October 2026. Employers across the country postponed or scaled back recruitment as economic uncertainty and higher operating costs weighed on confidence. The latest KPMG and REC UK Report on Jobs shows a renewed downturn in both permanent and temporary hiring, even as the pace of decline in overall vacancies eased.

For job seekers, employers and recruitment professionals, the findings point to a cautious UK hiring market where candidate supply is high and opportunities are harder to find.

UK Recruitment Market Key Figures: October 2026

The report is compiled by S&P Global from a survey of around 400 UK recruitment and employment consultancies. Three headline readings stand out:

Permanent Placements Index: 46.6, signalling a solid monthly contraction
Temporary Billings Index: 48.9, the first fall in seven months
Total Vacancies Index: 48.7, the softest fall in demand since August 2024

Index readings above 50 indicate growth compared with the previous month, while readings below 50 indicate decline. All three headline measures sit below that neutral threshold.

Permanent Placements Fall for the First Time in Four Months

The survey found a renewed downturn in permanent appointments, following two months of modest growth. Recruiters said businesses had scaled back or postponed recruitment as they weighed uncertainty and higher operating costs.

Permanent placements fell for the first time in four months and at the second-quickest pace so far in 2026, after May. That makes October one of the weakest months of the year for permanent hiring.

Regional Hiring Trends Across the UK

The regional recruitment picture was mixed:

South of England: the sharpest fall in permanent placements
Midlands: a solid reduction
London: only marginal growth
North of England: a fractional rise

The weakness was therefore concentrated in the South and the Midlands, while London and the North held broadly steady.

Temporary Billings Dip Below 50 for the First Time Since March

Temporary recruitment also weakened. Temporary billings moved below the neutral 50.0 mark for the first time since March. The report described the downturn as modest overall.

Recruiters linked the decline to three factors:

The completion of existing contracts
Fewer new opportunities
Weaker confidence among firms considering new projects

As KPMG and REC put it, economic uncertainty and rising expenses led to a slowdown in hiring decisions and fewer job opportunities.

Vacancy Decline Eases, but Permanent Demand Remains Weak

Demand for staff continued to fall in October, although the decline was the weakest for 26 months. The Total Vacancies Index rose from 48.5 in September to 48.7.

Permanent vacancies fell at a softer pace, while temporary opportunities edged up slightly following a two-month decline.

Private Sector vs Public Sector Hiring Demand

The split between sectors was notable:

Private sector: permanent demand rose modestly, while temporary demand increased only slightly
Public sector: demand for both permanent and short-term staff continued to fall, albeit at slower rates than in September

ONS Vacancy Data Shows Long-Term Weakness

Official ONS data cited in the report showed 691,000 vacancies in the three months to September. That is down 5.1% year on year, or 37,000 roles. It is the lowest number since the three months to April 2021 and, excluding the pandemic period, the lowest since the three months to September 2014.

This longer-term context shows that the current slowdown is not just a short-term blip. Vacancy levels are at multi-year lows.

Candidate Availability Keeps Rising

While vacancies shrink, the pool of available workers continues to grow. The Total Staff Availability Index reached 59.4 in October, up from September’s three-year low of 57.2. Candidate supply has now increased for 44 consecutive months.

Recruiters pointed to two main drivers for permanent candidates: fewer vacancies and higher redundancies. Temporary candidate availability also rose markedly, though at the slowest pace since the current expansion began in March 2023, as fewer contract opportunities added to the effect of redundancies.

For employers, this means a deeper talent pool. For candidates, it means more competition for each role.

Starting Salaries and Pay Growth Strengthen Modestly

Despite the weak demand picture, pay growth picked up slightly in October:

Starting salaries rose at a faster pace, although the rate remained below the survey’s long-run average
Temporary pay also rose, with inflation picking up slightly from September
London saw the fastest increase in temporary pay, while the Midlands recorded the softest rise

Recruitment consultancies linked rising starting salaries to ongoing shortages of suitable, higher-calibre candidates. In other words, even in a soft market, employers are still competing for specific skills.

Which Sectors Are Hiring? Job Categories in Demand

The sector picture remained uneven.

Permanent Roles

Permanent demand increased in six of the ten monitored job categories, led by:

IT & Computing
Engineering

The steepest declines were in Retail and Hotel & Catering.

Temporary Roles

For temporary roles, four sectors recorded higher demand. Blue Collar roles showed the sharpest increase, while Retail saw by far the steepest deterioration.

Retail therefore stands out as the weakest area across both permanent and temporary hiring.

What the October 2026 Jobs Report Means for Employers and Job Seekers

For Job Seekers

Expect a competitive market with more candidates chasing fewer roles
IT, computing and engineering offer the strongest permanent opportunities
Blue collar temporary work is a relative bright spot
Retail and hospitality candidates face the toughest conditions

For Employers

A larger candidate pool may make it easier to find talent
Competition for high-calibre specialists is still pushing up starting salaries
Hiring delays may reflect caution, but they can also leave skills gaps unfilled

For Recruiters

Both permanent and temporary pipelines are under pressure
Regional variation matters, with the South and Midlands weakest in October
Demand for tech and engineering talent remains the most resilient

Outlook: A Cautious UK Labour Market

The October data shows a UK labour market in a holding pattern. Vacancy declines are easing, which offers some encouragement, but permanent placements and temporary billings are both contracting, and employers remain wary about committing to new hires.

Much will depend on whether economic uncertainty and cost pressures ease in the coming months. Until then, expect hiring decisions to stay cautious, candidate availability to stay high, and pay growth to remain modest.

Reference links:

UK Recruitment Market: Hiring Falls as Uncertainty Grows