Starting pay for newly hired permanent staff in Britain rose in January at the fastest rate since August 2024, the latest monthly Report on Jobs from accountants KPMG and the Recruitment and Employment Confederation (REC) shows. The survey also pointed to a moderation in the decline of permanent placements, suggesting a slight easing in labour market stress for certain roles.
The report recorded the gauge for permanent staff placements at 46.9 in January, up from 44.3 in December, meaning the rate of contraction in permanent hiring was the slowest since July 2024. At the same time, temporary staff hiring moved into expansion territory, with its index climbing to 50.3 from 47.6, a rise the report attributes in part to demand for short-term staff and new projects.
Recruiters responding to the survey indicated some firms resumed or increased hiring after the uncertainty surrounding finance minister Rachel Reeves' budget on November 26 had dissipated. Lisa Fernihough, head of advisory at KPMG, commented on the start of the year: "After a difficult end to last year, it’s encouraging to start this year with tentative signs that hiring appetites are beginning to improve as chief executives respond to signs of easing uncertainty by starting to push forward with their plans."
REC Chief Executive Neil Carberry cautioned that the January data did not signal a broad-based rebound in hiring across the economy, although he said a "wait-and-see" period appeared to be drawing to a close.
Other metrics in the Report on Jobs highlighted continued frictions in the labour market. The survey found the availability of candidates for permanent roles increased at the softest pace seen in a year, and overall vacancies declined for the 27th month running. The findings come from a panel of around 400 recruitment agencies that supplied responses between January 12 and January 26.
Taken together, the data portray a labour market with pockets of resilience - notably within starting pay for new permanent hires and in temporary staffing - while broader measures of demand for labour remain subdued, as evidenced by the extended fall in vacancies and only modest improvements in candidate availability.
Methodology note: The Report on Jobs is based on responses from a panel of roughly 400 recruitment agencies collected between January 12 and January 26.