• Swindon & Wiltshire Economy
• Monday February 16 2026

Permanent hires continue to fall, but temp jobs rise in South West

Permanent staff appointments in the South of England continued to decline at the start of 2026, according to the latest KPMG and REC, UK Report on Jobs: South of England.

However, the region saw a tentative return to growth in temporary billings for the first time in two years, signalling a potential shift in hiring sentiment.

The survey, based on responses from around 150 recruitment and employment consultancies, found that permanent placements fell for the thirty-fourth consecutive month in January.

Although the reduction remained solid, the pace of decline eased compared with December and was softer than the 2025 average. Recruiters linked the downturn to subdued business confidence and a broader slowdown in hiring.

In contrast, the Temporary Billings Index rose above the neutral 50.0 mark, indicating modest growth. Some consultancies reported higher-than-expected activity at client firms, supporting the upturn.

The South’s expansion outpaced the UK average, though other regions showed mixed results.

Despite the improvement in temp billings, demand for staff continued to weaken overall. Vacancies for both permanent and temporary roles declined, with permanent vacancies falling at the sharpest rate in three months.

Candidate availability continued to rise, though growth slowed markedly.

The increase in permanent candidate supply was the softest in a year, suggesting redundancies may be easing and more individuals are successfully securing roles.

Temporary candidate numbers also rose, albeit at a slower pace.

Starting salaries for permanent staff increased for the third consecutive month, while temporary wages grew at their fastest rate in eight months. Recruiters cited competition for skilled candidates as a key driver of pay pressures.

David Williams, Bristol office senior partner at KPMG UK, said “When it comes to temporary billings, January marks a turning point for the South, with this index rising into growth territory for the first time in two years.

“While modest, this shift may be a signal that businesses are beginning to rebuild capacity after an extended period of caution.

“That being said, with permanent placements still declining, albeit at a slightly softer pace, businesses are still finding it difficult to look beyond short-term planning as they step into 2026.

“Amid a mixed picture, changes in labour market dynamics are tentatively encouraging.

“Candidate availability is still rising, but at the slowest pace in a year – indicating that more people are successfully moving into roles rather than remaining in the talent pool and that redundancies may be slowing.

“Reinforcing this, starting salaries are now on their third consecutive month of growth.

“For Southern businesses pursuing growth plans, this environment offers an opportunity to secure necessary skills before competition intensifies and wage pressures build further as confidence returns.”

Dan Barfoot, operations manager at CMD Recruitment, which contributes to the report, said: “A lot of companies are having to made redundancies to protect bottom line right now, and this has meant a surge in candidates.

“From what we have seen candidates looking for remote or hybrid roles are now willing to take the bottom end of the bracket just to secure roles.

“The next three months are certainly going to be interesting, with Employment Charter changes, and could this see a shift of businesses only employing on a contract/permanent basis to minimise risk.

“Either way, we are positioned to help businesses with their recruitment strategy.”

Image by Oleksandr Pidvalnyi from Pixabay