KPMG REC Report on Jobs September UK Labour Market: Key Insights

KPMG REC Report on Jobs September UK labour market: key insights

The KPMG REC Report on Jobs September UK labour market data show a cautious improvement in hiring. The permanent-placement index rose to 50.9 from 50.5 in August, its strongest reading since September 2022 and the fastest pace of growth in four years, although the increase remained marginal rather than a broad hiring surge, the REC reported today.

The September survey also captured the tension in Britain’s jobs market. Permanent placements and temporary billings increased, but overall demand for staff continued to fall. Vacancies declined while candidate availability rose amid reports of redundancies and fewer job opportunities, according to the REC.

For job seekers, the message is practical: conditions are improving in some parts of the market, but competition remains strong. A rise in placements does not mean that suitable vacancies are increasing in every occupation, region or employer.

What the KPMG REC Report on Jobs September data measures

The KPMG and REC UK Report on Jobs is compiled by S&P Global from questionnaires sent to around 400 UK recruitment and employment consultancies. Responses are collected in the second half of each month and show the direction of change compared with the previous month, the REC methodology explains.

The report uses diffusion indices ranging from 0 to 100. A reading above 50 indicates an overall increase, while a reading below 50 indicates an overall decrease, according to the survey methodology.

That distinction matters. A reading of 50.9 is not a count of jobs created and does not show how many vacancies are available. It indicates that reports of rising permanent placements narrowly outweighed reports of falling placements among the recruitment firms surveyed.

The Report on Jobs is viewed as a leading indicator of Britain’s labour market, Reuters reported last week. It can offer an early signal of changing recruitment conditions, but it cannot establish whether a particular occupation or employer is becoming easier to enter.

UK permanent staff placements rise as vacancies continue to decline

Permanent placements increased for a second consecutive month in September. That followed stabilisation in July, which ended a 45-month period of decline, before placements rose in August for the first time since late 2022, the REC said today.

Temporary billings also increased in September, but their growth was the weakest in five months. Recruitment activity therefore improved while the wider pool of available work remained under pressure, the October REC release shows.

Overall demand for staff contracted at its weakest rate in just over two years. Both permanent and temporary vacancies declined at similarly modest rates, while candidate availability continued to rise sharply. That increase was the slowest in three years, but recruiters still linked it to redundancies and fewer job opportunities, according to the REC.

The figures explain why the recovery can feel different depending on which side of the hiring process someone occupies. Employers are filling more permanent roles, yet the number of people available to fill jobs is also increasing. In some sectors, that may give employers more choice during shortlisting and interviews.

Jon Holt, KPMG group chief executive, said the jobs market was “starting to flicker back to life” for a second month as businesses increased hiring across permanent and temporary roles, the REC reported today. The same release described the recovery as fragile and warned that some sectors could feel like an employer’s market as more people look for work.

For people applying now, stronger placement figures should not be treated as proof that vacancies are rising everywhere. A focused application, a clear explanation of relevant experience and preparation for employer screening remain useful where candidate supply is high.

Which sectors and regions are driving the UK labour market recovery?

The improvement was concentrated in parts of the market rather than spread across every industry. Permanent-worker demand rose in half of the ten monitored sectors, led by IT & Computing and Engineering, the REC reported today.

Retail and Hotel & Catering recorded the sharpest falls in vacancies. That does not mean every employer in either sector has stopped hiring, but it does mean that national recovery headlines may offer limited guidance to someone seeking retail or hospitality work, the REC reported today.

Temporary vacancies increased in only three monitored sectors: Blue Collar, IT & Computing and Nursing/Medical/Care, according to the REC. That supports a narrower conclusion about care work: temporary roles in Nursing/Medical/Care showed growth. It does not establish stronger permanent demand across the care sector.

Regional results were mixed. Three of the four monitored English regions recorded higher permanent placements, led by the North of England, while the South of England was the only area to record a decline, the REC said today.

Temporary billings rose markedly in the North of England and the Midlands, with a more modest increase in the South. London recorded a sharp reduction after four months of growth, the REC reported today.

Job seekers considering a move should check current vacancies in the specific town or region rather than relying on a national index. Regional demand can differ even when the wider UK labour market appears to be moving in one direction.

Pay growth moderates as hiring improves

Starting salaries for permanent workers rose in September, but more slowly than in August. It was the first slowdown in permanent salary growth in four months, while temporary pay growth fell to a four-month low, the REC reported today.

That marked a change from July, when starting-salary growth reached a six-month high and temporary wage growth reached a 26-month high amid recruiter reports of a lack of suitably skilled or experienced candidates, the REC reported earlier this year.

The September survey is an indicator of recruitment pay pressure, not a complete measure of UK wage inflation. Slower permanent salary growth may offer “tentative reassurance” to Bank of England officials assessing domestic inflation pressure, Reuters reported last week. It does not determine what an individual employer will offer.

Job seekers comparing offers should use the survey as background rather than as a personal pay benchmark. Current postings for the same role, location and experience level are more directly relevant when preparing for a salary discussion.

What to watch next

The next Report on Jobs release will show whether September’s modest rise in permanent placements develops into broader improvement in vacancies. That is the important test, because placements can increase while total staff demand is still contracting.

The REC said businesses would be looking to the Budget later this month for greater certainty around tax policy, energy costs, borrowing costs and investment conditions, the REC reported today. Those issues are wider economic questions, but they may affect whether employers move from cautious recruitment to sustained hiring.

For now, job seekers and career changers should treat the survey as an early signal rather than a confirmed hiring boom. Check live vacancies in the target sector, compare regional patterns before considering relocation, and use current job postings to assess salary expectations. People in retail or hospitality who are considering a change can also research whether their customer service, scheduling, sales or operational experience transfers to roles in fields showing stronger demand, including IT, Engineering or temporary Nursing/Medical/Care work.