The hiring slump just ended after 45 months. The useful bit is what did not recover

For the first time since the autumn of 2022, the line stopped going down. The KPMG and REC UK Report on Jobs, published on 10 August 2026, found that permanent staff placements stabilised in July after 45 consecutive months of decline — the longest run of contraction the survey has recorded. The recruitment industry called it a milestone, and on its own terms it is one.

But the headline is the least useful part of the report for anyone running a small business. The interesting detail is in what recovered and what did not, because the two together describe a very specific kind of market — and a fairly short window.

What actually moved

Four things happened in July, and they only make sense read as a set.

Permanent placements stopped falling. Temporary billings rose for a fourth consecutive month. Temporary vacancies increased for the first time in two years, while permanent vacancies carried on declining, just more slowly. And pay went up on both sides: starting salaries for permanent roles rose at the fastest rate in six months, and temporary wage growth reached a 26-month high. Underneath all of it, candidate availability kept increasing, extending a trend that has now run for about three and a half years.

So: employers are hiring again, but they are hiring the reversible kind. They are paying more to do it. And there are still plenty of people looking.

Temporary first is not a quirk, it is the whole signal

When businesses are unsure whether demand will hold, they buy capacity they can hand back. A temp, a contractor or a fixed-term hire ends when the project ends. A permanent employee comes with notice periods, redundancy exposure, employer National Insurance and a commitment that outlasts whatever made you confident enough to sign.

The report attributes the shift to employers wanting more flexible workforce solutions to complete internal projects and support growth amid political and economic uncertainty. Strip the survey language out and it is the same calculation a nine-person firm makes when it uses a freelancer for three months instead of advertising a job: the work is real, the confidence is not, and flexibility is worth paying a premium for.

That premium is now visible in the numbers. Temporary wage growth at a 26-month high is what it costs to rent capacity in a market where everyone else wants the same thing.

A market that has stopped falling is a market at the bottom. That is genuinely better than a market still sliding — but it is not the same as a recovery, and planning as though it is will cost you.

The bit that is actually good news for a small employer

Candidate availability is still rising, and permanent competition is still weak. That combination has not been common in the last decade, and it favours the smaller employer more than the larger one.

A big firm hiring in a tight market wins on salary. A small firm hiring in a loose market wins on everything else it has always been better at: speed of decision, a named person the candidate will actually work for, a role with visible scope rather than a slot in a structure. When there are more candidates than roles, the businesses that move fastest and describe the job most honestly get first pick — and neither of those costs money.

The catch is that this is the part with a clock on it. Starting salaries rising to a six-month high means the pricing advantage is already eroding while the availability advantage is still there. Wait two more quarters and you may be hiring into a market with the same salaries and half the candidates.

Put a number on the decision, not a feeling

The question is never whether the market is good. It is whether a specific role pays for itself. That is arithmetic, and it takes ten minutes.

Take a firm considering a £32,000 hire. Employer National Insurance and pension contributions add roughly 15% on top, so budget about £36,800 a year before anything else. Add recruitment, equipment and the productivity dip while the person learns the job — call it £4,000 in year one, which is deliberately conservative. So the first year costs somewhere around £40,800, or £3,400 a month.

Now the other side. If the business works on a 40% gross margin, that role has to generate about £102,000 of additional revenue in twelve months to cover itself — £8,500 a month of new work, or the same amount of existing work the owner currently does and would stop doing. If you cannot see where that comes from, the market conditions are irrelevant. If you can, and the number is comfortable rather than heroic, then hiring while candidates are plentiful and before salaries climb further is the cheaper version of a decision you were going to make anyway.

Run the same sum at 10% worse trading. If it still works, hire. If it only works at today's revenue, that is what the temporary route is for.

What to do this month

Three things, none of them expensive. First, decide whether you have a role at all, using the sum above rather than how busy last week felt. Second, if you do, get the advert out while availability is high — the report has been showing rising candidate numbers for three and a half years and that will not last indefinitely once permanent demand returns properly. Third, if you cannot commit permanently, use a fixed term with a written end date and a written note of what would make it permanent, and say so to the candidate on day one.

The failure mode to avoid is the one the whole economy is currently modelling: temporary arrangements that were never reviewed, quietly running for years, costing more per hour than a salary and accruing rights nobody planned for. Flexibility is a legitimate answer to an uncertain market. Drift is not the same thing.

One report month is not a trend, and the survey itself is a snapshot of what recruitment consultancies saw in July. But 45 months is a long time for a line to point in one direction, and it is worth knowing the week it stopped.

Common questions

What exactly did the report say?

The KPMG and REC UK Report on Jobs, published on 10 August 2026 and covering July data, found that permanent staff placements stabilised after 45 consecutive months of decline. Temporary billings rose for a fourth month running, and temporary vacancies increased for the first time in two years. Permanent vacancies were still falling, but more slowly. On pay, starting salaries for permanent roles rose at their fastest rate in six months and temporary wage growth hit a 26-month high. Candidate availability carried on increasing, extending a trend now running for around three and a half years. The report is compiled from a panel of UK recruitment consultancies.

Does 'stabilised' mean hiring is going up?

No, and the distinction matters. Stabilised means the long slide in permanent placements stopped — it does not mean placements grew. Forty-five months of decline ending is a genuine milestone, because it is the first time since 2022 that the line has not pointed down. But a market that has stopped falling is a market at the bottom, not a market in recovery. Permanent vacancies were still declining in July, just less sharply. Treat it as the end of the bad news rather than the start of the good news, and plan for a flat market that could go either way over the next two quarters.

Why are temporary roles recovering first?

Because they are reversible. A temp or fixed-term hire can be ended when a project finishes or trading softens; a permanent hire carries notice, redundancy exposure and employer National Insurance you have committed to indefinitely. When employers are unsure about demand but still have work that needs doing, temporary capacity is the way they buy time. The report puts it down to a desire for more flexible workforce solutions to complete internal projects and support growth amid political and economic uncertainty. That is the same instinct a small firm has when it uses a freelancer instead of hiring — just measured across the whole economy.

If candidates are plentiful, why are salaries going up?

Because availability and suitability are not the same thing. Candidate numbers have been rising for around three and a half years, driven by redundancies and by fewer people moving jobs, so shortlists are long. But the specific skills employers actually want stay scarce, and when a business finally decides to hire it competes for a small pool at the top of that long list. Starting salaries rising to a six-month high alongside plentiful candidates is not a contradiction — it is a market where it is easy to get applicants and still hard to get the right one. The premium is on the specific person, not on the category.

Is this a good moment for a small business to hire?

It is a better moment than it will be if the market keeps turning, which is the honest way to put it. Availability is still high and permanent competition is still weak, so a small employer is bidding against fewer people than they were two years ago. But starting salaries are already climbing, so the cost advantage is eroding while the availability advantage lasts. The right question is not whether the market is good — it is whether you have a role that would pay for itself, and whether you would still want it filled if trading were 10% worse. If both answers are yes, waiting costs you.

What if we cannot commit to a permanent hire?

Then do what the wider market is doing and buy flexible capacity, but do it deliberately rather than by drift. Set a defined end point and a defined piece of work, write down what would have to be true for the role to become permanent, and tell the person that up front. The failure mode is the temporary arrangement that quietly runs for two years, costs more per hour than a salary would have, and leaves someone with employment rights nobody planned for. A fixed-term or contract arrangement is a legitimate answer to uncertainty. An indefinite one that nobody reviews is just an expensive decision you never made.