(Alliance News) - UK employers are reporting "a change in tone" since the start of 2026, data published by the Recruitment & Employment Confederation and KPMG showed Monday.
The temporary billings index climbed to 50.3 points in January to 47.6 points in December. Rising above the neutral 50-point mark separating growth from contraction, it indicates an increase in billings received from the employment of short-term staff in January. It was the first expansion since October.
The REC noted that the blue-collar employment category was the only one to register an increase in temporary staff demand in January, showing marginal growth. At the same time, nursing, medical, care and retail had the sharpest falls in temporary job opportunities.
REC Chief Executive Neil Carberry said: "There have been increasing signs from businesses as we enter 2026 that uncertainty on hiring plans is giving way to action. That does not mean a general hiring upswing, but the 'wait-and-see' period seems to be ending. Rising temp billings and a levelling off in the permanent market speak to these clearer plans. REC members across the country report a change in tone since the start of the year.
"The decisions firms are now making involve lots of trade-offs, such as whether to create jobs in the UK or elsewhere, or which jobs need the human touch as opposed to an automated solution. A growing, inclusive economy requires high levels of employment – a focus on encouraging firms to create jobs rather than discouraging that investment is more important than ever.
"So far, the government has struggled to convince businesses it wants them to hire. That has to change in the decisions that are made this year if we are to avoid a continued rise in unemployment."
The permanent placements index edged up to 46.9 in January from 44.3 in December, indicating a slower decline in the appointment of permanent staff.
Notably, permanent placements fell at the softest pace in 18 months in January. The REC said: "Panel members frequently linked the decrease to fewer job opportunities amid generally muted market confidence and concerns over staff costs.
"That said, there were some reports of companies lifting hiring freezes as some market uncertainty had dissipated following last November's budget announcement."
The total vacancies index ticked up to 43.8 in January from 43.4 in December, indicating a slowed reduction in demand for staff. Overall vacancies have fallen throughout the past two years.
The permanent staff availability index fell to 58.1 in January from 66.7 in December, while the temporary staff availability index edged down to 59.0 in January from 60.0 in December.
The KPMG and REC UK report on jobs is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies. Responses were collected between January 12 and 26.
By Tom Budszus, Alliance News slot editor
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