KPMG says permanent hiring falls as temp billings rise in May report

The first workers to lose leverage in KPMG’s latest market read were the people trying to change jobs. Permanent placements fell at the quickest pace since January, while temporary billings rose for the first time in three months, a split that suggests clients still wanted flexibility but were not yet ready to commit to more full-time headcount.

KPMG and the Recruitment and Employment Confederation said the April reading reflected heightened market uncertainty, rising business costs and concern over the war in Iran. The May 2026 Report on Jobs drew on responses collected from April 9 to April 24 from around 400 UK recruitment and employment consultancies, and it showed total demand for workers falling for a 30th straight month, even though the decline was the softest in nearly a year.

For KPMG consultants, auditors and advisory staff, that matters because weak permanent hiring usually shows up fast in the internal politics of staffing. It becomes harder to win approval for new roles, harder for candidates to command bigger offers and harder for employees to use outside options as leverage in raise talks. Temporary work held up better, with billings edging up slightly as some firms leaned on short-term staff to keep business development and expansion plans moving. That points to a market where clients still need capacity, but prefer to rent it rather than hire it.

Pay data told a similar story. Starting salaries for permanent workers and wages for temp staff both improved from March, but the gains were only mild and remained below long-run averages. KPMG said pay inflation was still historically subdued, which limits how much room managers have for across-the-board increases even when individual performance is strong. For employees hoping to move up the partner track or switch teams after busy season, that usually means slower negotiations and a narrower window to cash in on a move.

Candidate availability also rose sharply in April, driven by redundancies and weaker demand for staff, although the pace of increase eased from March. KPMG and REC said that earlier this year the picture had looked firmer: permanent placements had fallen at the slowest rate in a year-and-a-half in January, and then only marginally in February. April reversed that momentum. For workers, the message is clear: in a softer market, contractors keep more options than permanent candidates, and existing staff are the ones most likely to feel the squeeze on pay, promotion timing and mobility.