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Recrutiment & Employment Confederation

Report on Jobs: Firms' hesitancy to hire weighs on permanent staff recruitment in February

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Key findings

  • Further fall in permanent placements, but temp billings rise
  • Vacancy growth improves for second month running
  • Softest reduction in candidate supply for nearly two years 
    Data collected February 10-22


Data from the latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, showed that recruitment activity remained dampened by lingering economic uncertainty and subsequent hesitancy around hiring. Notably, permanent placements fell for the fifth straight month, while temp billings growth was mild overall.

Candidate shortages also contributed to the slowdown in hiring activity, though the latest drop in labour supply was the softest seen for nearly two years. Vacancies data showed a relative improvement in growth of demand for staff, however, helped by a quicker rise in permanent vacancies. Pay pressures remained sharp overall, driven by the rising cost of living and competition for scarce candidates.

The report is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.

February sees sustained fall in permanent placements

Permanent staff appointments across the UK fell for the fifth straight month in February, and at a slightly quicker pace than that seen in January. Recruiters often mentioned that clients adopted a more cautious approach to staff hires due to ongoing economic uncertainty. At the same time, billings for temporary workers continued to expand, albeit modestly.

Softest fall in candidate supply since March 2021

Recruitment consultancies signalled that the current downturn in candidate availability continued to ease midway through the first quarter. Overall staff supply fell at a mild rate that was the slowest seen for nearly two years, which was underpinned by softer falls in both permanent and temp candidate numbers. Panel members often commented that workers were reluctant to seek out new roles in the current economic climate, while ongoing skill shortages also weighed on staff availability. However, some recruiters noted that the supply of workers had improved due to recent redundancies. 

Rates of starting pay continue to rise sharply

The rising cost of living and difficulties attracting and securing suitably skilled staff drove further increases in starting pay for both permanent and temporary roles in February. Permanent starters' salaries continued to rise at a quicker pace than that seen for temp pay, though in both instances the rate of growth was the second-softest for nearly two years.  

Regional and Sector Variations

Three of the four monitored English regions recorded lower permanent placements, led by London. The North of England bucked the overall trend and saw a modest upturn. 

The North of England saw the steepest increase in temp billings during February. The only monitored English area to report a fall was the Midlands. 

Demand for staff continued to expand across both the private and public sectors midway through the first quarter. The quickest increase in vacancies was signalled for temporary staff in the public sector, closely followed by permanent workers in the private sector. The softest upturn in vacancies was recorded for temporary roles in the private sector.

Demand for permanent workers increased across all ten monitored job categories during February. Nursing/Medical/Care topped the rankings once again, while Secretarial/Clerical saw the softest expansion in vacancies.

February survey data indicated that demand for short-term staff rose quickest for Nursing/Medical/Care roles, followed closely by Hotel & Catering. Retail was the only employment area to see a fall in demand for temporary workers.


Kate Shoesmith, REC Deputy Chief Executive, said:

“This is further proof of ongoing demand in the UK jobs market, coming on the back of our most recent Labour Market Tracker report which showed new job adverts at a 14-month high in February.”

Commenting on today’s report, Kate Shoesmith continued:

“As hirers work out what variable economic forecasts might mean for their business and staff, it makes sense that we continue to see temp billings hold up so well. Temporary staffing ensures firms can continue to provide goods and services, and people can grow their careers - even when the economic outlook is unclear. Demand for staff continued to expand across both the private and public sectors. The rising cost of living, plus difficulties attracting and securing suitably skilled staff are also driving increases in starting pay. It will be particularly important to watch for any early trends coming from this data on regional disparities in supply and demand in the labour market.

“What this latest Report on Jobs shows is serious labour and skills shortages are not behind us. The economy stands to lose up to £39 billion in GDP every year from 2024 unless business and government act now. Many businesses are doing what they can but the Spring Budget is the ideal opportunity to find a way forward together. The Chancellor must put people issues first, with innovative and refreshed policies on skills and tackling economic inactivity, and from immigration to childcare.”

Commenting on the latest survey results, Claire Warnes, Partner, Skills and Productivity at KPMG UK, said:

"The current economic outlook continues to impact hiring activity as employers keep playing the short game by focusing on temporary hires, while permanent appointments fall for the fifth month in a row.

"Despite the rate of vacancy growth picking up to the best recorded in four months, candidate shortages remain, with recruiters citing hesitancy to move roles and longstanding, systemic skills shortages. Nursing, care and medical topped the rankings once again with highest demand for workers - both temporary and permanent.

"These factors combined continue to play into pay inflation as employers try to compete with the rising cost of living.

"What the economy needs now more than ever is a skilled workforce."



For more information and interview enquiries, contact the REC Press Office on 020 7009 2192, 020 7009 2157 or Outside of regular office hours, please call 07702 568 829.

For further information on the survey methodology, or for full reports and historical data from the Report on Jobs, please contact

If you are a recruitment business and interested in joining the Report on Jobs survey panel, you can sign up here. By joining the panel, you will get free access to the full Report on Jobs each month.


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