Updated:
Permanent staff placements in the UK rose at their fastest pace in four years in September, while the broader fall in demand for workers slowed to its weakest rate in more than two years, according to a survey of recruitment firms published on October 8. The KPMG and Recruitment and Employment Confederation (REC) gauge marked another month of improvement after the market’s prolonged slowdown.
The permanent placements index edged up to 50.9 from 50.5 in August, Reuters reported. On the survey’s scale, readings above 50 indicate growth and readings below 50 indicate contraction. The September result was the highest since September 2022, but the modest increase does not mean hiring has recovered across the labour market: overall demand for staff was still declining.
The findings offer a mixed picture for employers, workers and policymakers. Recruiters reported the strongest demand for information technology and computing, and engineering roles, while retail and hospitality had the sharpest falls. Permanent starting salaries continued to rise, but at a slower pace than in August, a development that could be relevant to Bank of England officials assessing domestic inflation pressures.
Permanent placements move further into growth
The September index extended the improvement seen in August, when the permanent placements measure first returned to growth after a prolonged period of decline. The REC’s summary of the earlier report said placements had risen for the first time since September 2022, while temporary billings also expanded. That report also described falling vacancies and rising candidate availability, illustrating that the initial upturn in appointments was not accompanied by a broad improvement in all recruitment indicators.
The latest reading of 50.9 is a diffusion index, not a count of jobs created or a percentage increase in employment. It records the direction of change reported by surveyed recruiters compared with the previous month. The rise therefore signals that more recruiters reported an increase than a decrease in placements, but does not establish how many people were hired or whether the trend will persist.
Overall staff demand is still shrinking
Despite the better placements reading, employers’ demand for staff continued to contract in September. Reuters said the pace of that contraction was the weakest since August 2024. The improvement suggests the decline was easing, rather than showing that vacancies or total recruitment demand had returned to sustained growth.
The sector split underscores the unevenness. IT and computing, alongside engineering, recorded the strongest demand, while retail and hospitality saw the sharpest declines. The survey findings point to varying recruitment conditions across industries, but the published report did not provide detailed vacancy counts or explain the reasons behind each sector’s performance.
Pay growth slows, keeping inflation in focus
Permanent starting salaries increased in September, although more slowly than in August. That moderation may matter for the Bank of England because pay growth can contribute to domestic price pressures; however, the survey alone cannot determine the direction of inflation or the central bank’s next policy decision.
In comments reported by Reuters, KPMG chief executive Jon Holt described hiring as improving for a second consecutive month and said businesses were increasing recruitment across both permanent and temporary roles. The survey data offer support for that assessment on placements, while the continued fall in total staff demand shows why the broader recovery remains incomplete.
A recruiter survey, not an official employment count
The KPMG/REC Report on Jobs is compiled by S&P Global from responses from recruitment and employment consultancies. Its diffusion indices capture reported month-to-month direction, making the survey a timely indicator of recruiters’ experience, but not a substitute for official statistics on employment, unemployment, earnings or vacancies.
The available September reporting does not establish whether the improvement will continue in coming months, nor does it provide a confirmed schedule for subsequent survey data. The central distinction in the results is between placements, which grew at the fastest pace in four years, and overall demand, which was still contracting, albeit more slowly than at any point since August 2024.
