The UK jobs market is beginning to show signs of improvement, but employers are not simply returning to their old hiring habits.
Permanent staff appointments increased in August for the first time since September 2022, according to the latest KPMG and REC UK Report on Jobs. At the same time, temporary billings expanded for a fifth consecutive month, growing at their second-fastest rate in more than three years.
That combination points to a labour market in which businesses are becoming more willing to recruit while continuing to value flexibility.
Why Employers Are Turning to Temporary Staff
Temporary staffing gives employers something particularly valuable in an uncertain market: the ability to add people when demand requires it without immediately increasing permanent headcount and long-term employment costs.
That flexibility matters when businesses are unsure how quickly demand will grow, need extra capacity for a limited period or have projects that require particular skills but not necessarily a permanent role. Temporary workers can also help companies respond to seasonal peaks, cover absences and address short-term skills gaps while they decide whether a longer-term hire is justified.
Cost control is another factor. A permanent appointment represents an ongoing commitment, while temporary staffing allows businesses to adjust workforce capacity more closely to actual workload. When confidence is fragile, that can make it easier to proceed with projects or meet an increase in orders without making hiring decisions based on demand that may not last.
Recent recruitment data suggest employers have been making exactly this kind of calculation. Earlier this year, permanent recruitment weakened as businesses became more cautious about adding to their long-term costs. By June, growth in temporary billings had accelerated, with recruiters reporting greater demand for short-term staff and contract work.
The picture has since improved, but the preference for flexibility has not disappeared. By August, permanent placements were growing again, although only marginally, while temporary recruitment remained comparatively strong. This suggests employers are increasingly combining permanent recruitment for roles where future demand is clearer with temporary or contract staffing where requirements are more variable.
More Temporary Workers Also Mean More Work Behind the Scenes
Growth in temporary placements creates a less visible challenge. As the number of temporary workers grows, so does the amount of information moving through those processes. Hours then have to be recorded, timesheets submitted and approved, client charges calculated, invoices raised and workers or contractors paid accurately.
“Teams have to process more timesheets, approvals, client invoices and worker payments, and those workflows can quickly become difficult to manage manually,” says Michael Gois, founder of Timesheet Portal, a provider of recruitment pay and bill software.
Temporary Recruitment Is Becoming a Sustained Trend
What makes the latest figures particularly interesting is that the increase in temporary recruitment is not based on a single strong month.
Temp billings returned to sustained growth during the spring and strengthened through the summer. By July they had risen for four consecutive months, while temporary vacancies increased for the first time in two years. August then extended the run to five months.
At the same time, the permanent market has started to recover.
This makes temporary staffing less of a substitute for a weak permanent jobs market and more of an increasingly important part of how employers build their workforces. Businesses can recruit permanently for roles where they have confidence in long-term demand while using temporary or contract workers when requirements are less predictable.
For companies dealing with projects, changing order volumes or specialist requirements, that ability to adjust staffing levels can be particularly valuable.
Flexibility Can Matter to Workers Too
The flexibility of temporary recruitment is not relevant only to employers.
Temporary assignments can provide a quicker route back into employment, allow people to gain experience with different organisations or sectors, and give some workers more choice over when and how they work.
It would be misleading, however, to suggest that temporary employment is automatically preferable to permanent employment. Different workers value different levels of stability and flexibility, and the suitability of temporary work depends heavily on individual circumstances.
What matters for the wider jobs market is that it creates another route between people looking for work and organisations that are not yet ready, or do not need, to create a permanent position.
A More Flexible Jobs Market May Be Emerging
The recent improvement in permanent recruitment is encouraging, but it does not remove the factors that have made businesses cautious.
Companies still need to respond to changes in demand, control costs and find people with the right skills. Temporary recruitment gives them another way to do that without making every staffing decision a permanent one.
The latest figures therefore suggest something more nuanced than a simple recovery in hiring. Permanent recruitment is beginning to move again, while temporary staffing has already established several months of growth.
If that pattern continues, the distinction between permanent and temporary recruitment may become less about choosing one model over the other and more about businesses deciding which type of employment best fits each particular role, project and stage of growth.
