UK Recruitment Market Snapshot — April 2026

MARKET SNAPSHOT: 5 Key Numbers

49.2

Permanent placements index (still declining, but at the slowest rate in 3 years)

48.4

Temporary billings index (decline easing month-on-month)

46

Vacancy index (falling, but at the slowest pace in 10 months)

45.6

Construction PMI (continued contraction, led by weak housing demand)

50.5

Services PMI (still growing, but at its weakest level in 11 months)

Stability emerging… but confidence still fragile

March’s data paints a picture that most recruiters will recognise:

• The market isn’t falling apart anymore
• But it’s not fully bouncing back either

Instead, the UK recruitment market is sitting in a “slow stabilisation” phase, shaped by cautious hiring, rising candidate availability, and wider economic uncertainty.

Hiring activity: slowing decline, early signs of stabilisation

The latest KPMG/REC Report on Jobs shows:

• Permanent placements still falling, but only marginally
• Temp billings also down, but easing
• Demand for staff declining at the softest pace in 10 months

Some employers are now restarting previously paused hiring plans, signalling early confidence returning.

But here’s the reality most agencies are feeling:

• Hiring decisions are taking longer
• Offers are more scrutinised
• Cash flow and cost control are front of mind

That’s why we’re seeing more conversations around invoice finance and invoice funding as agencies look to maintain momentum despite slower deal cycles.

Candidate supply rising – shifting the balance

March saw candidate availability rise at the fastest pace this year.

At the same time:

• Salary growth has softened
• Clients have more choice
• Competition between candidates is increasing

For agencies, the challenge shifts: placements are still there but they’re harder to secure.

And in a market where placements take longer to convert, understanding what is invoice finance (and how it supports working capital between deals) becomes increasingly relevant for growing agencies.

Vacancies: still falling, but stabilising

Vacancies across both permanent and temporary roles have now been declining for nearly 2.5 years, but the pace of decline is easing.

Permanent demand continues to see the steeper reductions, while temporary roles have shown slightly more resilience.

This is important. It signals:

• The market is no longer deteriorating quickly
• We’re moving into a plateau phase before recovery

For recruiters, that means:

• More predictability than 2025
• But not yet a return to high-growth conditions

In this kind of environment, agencies are often reviewing their funding setup – whether that’s traditional facilities or exploring invoice financing through specialist invoice factoring companies to smooth cash flow while placements rebuild.

Sector watch: construction remains under pressure

The UK Construction PMI shows continued contraction:

• Activity at 45.6
• Housing particularly weak
• New orders falling at the fastest pace since late 2025

Confidence is being hit by:

• Delayed projects
• Rising costs
• Client caution

For recruiters operating in construction or blue-collar sectors, this creates a knock-on effect:

• Fewer new roles
• Longer sales cycles
• Greater reliance on existing contractor books

Which is exactly where models like invoice funding or factoring in business become critical – supporting payroll and continuity even when new deal flow slows.

Services: still growing, but momentum fading

The UK’s largest sector is still expanding but only just:

• Services PMI at 50.5
• Weakest growth in 11 months

More importantly:

• New business has started to decline again
• Confidence is falling
• Employment is edging down

This reflects a broader shift:

• Clients are still spending but more cautiously
• Investment decisions are being delayed

For recruitment agencies, that often translates into:

• Extended hiring timelines
• More reliance on temporary or contract placements
• Greater need for flexible funding solutions like invoice finance to bridge the gap between invoicing and payment

The bigger picture: uncertainty is driving behaviour

Across this month’s for S&P Global reports, one theme stands out: Uncertainty is shaping hiring decisions

• Employers are risk-averse
• Projects are being delayed
• Costs are under scrutiny

Even globally, manufacturing is seeing:

• Slower growth
• Rising input costs
• Falling confidence

That uncertainty feeds directly into the UK hiring market and into how agencies manage growth.

What this means for recruiters

This isn’t a downturn in the traditional sense. It’s a reset in how the market operates.

Right now, success looks like:

• Moving faster than client hesitation
• Adding value beyond CVs
• Managing expectations clearly
• Protecting cash flow and operational stability

Because in a market where deals take longer and confidence is fragile, having the right financial structure, whether through retained earnings or tools like invoice financing, can be the difference between standing still and continuing to grow.

Rik King, Director, QUBA Solutions comments:

“What we’re seeing in the UK recruitment market right now is a shift from decline to stabilisation. Hiring hasn’t stopped, it’s just become more cautious, more considered, and more competitive. With candidate availability rising and client confidence still fragile, the agencies that will win are those that can maintain momentum, manage cash flow effectively, and guide clients through uncertainty, not just react to it.”

Want to understand how this impacts your cash flow?

In a market where placements are taking longer and hiring decisions are more cautious, how your funding works behind the scenes matters more than ever.

If you’re reviewing your options or simply want a clearer picture:

• What is Recruitment funding and how does it work?
• Self-funding vs through a provider
• Thinking about starting a recruitment business? Here’s a few things to think about
• Thinking of transferring from your existing funder? Here’s some reasons why you should

• S&P Global REC/KPMG UK Report on Jobs – March 2026
• S&P Global UK Construction PMI® report – March 2026
• S&P Global UK Services PMI® – March 2026
• S&P Global UK Manufacturing PMI® – March 2026