The latest KPMG and REC, UK Report on Jobs: Midlands survey, compiled by S&P Global, indicated a solid and accelerated rise in temp billings across the Midlands at the start of the final quarter of 2025. Furthermore, the rate of growth was the best recorded for nearly a year.
This contrasted with a further decline in permanent staff appointments, which fell at the steepest pace in three months. Recruiters in the Midlands also signalled sustained upturns in candidate availability which, combined with relatively muted demand for staff, dampened pay pressures. In fact, the latest increase in starting salaries was the slowest recorded since July and well below the series average.
The KPMG and REC, UK Report on Jobs: Midlands is compiled by S&P Global from responses to questionnaires sent to around 100 recruitment and employment consultancies in the Midlands.
Sharpest fall in permanent placements since July
October data pointed to a sustained reduction in permanent placements in the Midlands that was the fifth in as many months. The rate of decline was the most pronounced since July and sharp. According to respondents, a range of factors dampened permanent staff hiring, including weaker demand for workers, recruitment freezes, higher employment costs and uncertainty surrounding future government policy.
The Midlands recorded the second-sharpest reduction in permanent placements across the four monitored English areas, behind the North of England.
For the third consecutive month, temp billings in the Midlands rose at the start of the fourth quarter. Where an increase was reported, recruiters mentioned greater demand for temporary staff. The rate of expansion was solid overall, having accelerated to the strongest since November 2024.
The only other monitored English region to record an increase in billings was the North of England, though the upturn was marginal. Temp billings meanwhile fell in the South of England and London.
Demand for permanent workers declined again in October, albeit to a lesser extent than in September. Though solid, the rate of reduction was the softest in four months and the weakest of the four monitored English regions.
Demand for short-term staff, on the other hand, rose for the third consecutive month in October. The rate of increase was only marginal, however, and was unchanged from September. Nevertheless, the Midlands was the only monitored English region to post an uptick in temp vacancies.
Slower increase in permanent candidate numbers
The number of permanent candidates rose for the thirty-first month running in October. Redundancies reportedly led permanent staff availability to increase in the latest survey period. Though rapid overall, the rate of growth was the softest seen since May.
The upturn in permanent labour supply in the Midlands was also weaker than those seen across the three other monitored English areas.
The rate of increase in temporary candidate numbers strengthened in October and was robust overall. As was the case for permanent labour supply, the upturn was mainly linked by recruiters to redundancies, though some firms mentioned higher staff turnover.
The rise in short-term staff availability in the Midlands was also stronger than that seen across the UK as a whole.
Permanent starting salaries rise at softest pace in three months
As has been the case since March 2021, starting salaries for permanent workers in the Midlands rose at the start of the fourth quarter. Panellists commented that the increase partly reflected competition for suitably skilled candidates that were often in short supply.
The rate of salary inflation was only modest, however, having eased to the slowest since July. That said, the Midlands saw the strongest rate of salary inflation of the four English regions monitored by the survey.
Hourly pay rates for temporary staff increased for the eleventh consecutive month during October. However, the rate of wage inflation eased from September and was only modest overall.
Higher rates of temp pay in the Midlands and London contrasted with declines in the North and South of England.
Commenting on the latest survey results, Kate Holt, people consulting partner at KPMG in the Midlands, said: “Divergence across permanent and temporary recruitment trends defined the Midlands in October. Permanent placements fell at their sharpest rate in three months, while temp billings rose solidly and at the fastest pace in nearly a year.
“This split demonstrates how employers are favouring flexibility over commitment in a changeable economic landscape. We’re likely to see employers hedging against economic uncertainty and rising employment costs in this way ahead of the Autumn Budget.
“Notably, the Midlands was the only region to see temporary vacancies rise, suggesting resilience in short-term hiring appetite. Pay pressures are also easing, with permanent salary growth slowing to its softest pace since July, despite the region still recording the highest rate across England.”
Neil Carberry, REC chief executive, said: “Today’s data reflects the more positive outlook we have been hearing from recruiters since the start of the autumn. They aren’t exuberant – this is just a more stable market.
“For the third consecutive month, temp billings in the Midlands rose and we can hope that the long period of retrenchment we saw last into the summer, is starting to ebb away. But we have been here before – there was a similar mood in the UK jobs market before the Chancellor’s Halloween Budget last year.
“The huge surprise increase in payroll taxes then shocked the market and we have seen the results of that, as businesses predicted then, in higher unemployment and redundancy. As we go into Budget 2025, there can be no repeat. If Government cares about growth, as it claims, measures must stoke business investment, not deter it.
“The report today is the best we have seen for the UK since the summer of 2024. There is a broader base of demand forming across the UK, from accounting and finance to logistics and IT roles.
“The Budget must give employers confidence to invest, with a focus on unlocking potential through delivering on skills reform, supporting business investment and reforming the approach to the Employment Rights Bill, which needs a dose of practicality and realism.”
