• Swindon & Wiltshire Economy
• Tuesday June 9 2026

Temp billings rise as employers hold back on recruiting

The South of England jobs market weakened further in May, with permanent hiring still under pressure as employers held back on recruitment amid poor confidence and tight budgets.

At the same time, companies leaned more heavily on temporary staff, pushing temp billings up at the fastest pace in three years.

The latest KPMG and REC UK Report on Jobs showed permanent placements in the region fell again, with the decline only slightly slower than April’s and the second-fastest since last August.

Vacancy levels for permanent roles dropped more sharply than temp openings, while demand for short-term staff also softened, though less dramatically.

Recruiters said many firms were freezing hiring or cutting recruitment budgets, and the South continued to underperform the UK overall for permanent jobs.

“May’s figures suggest that the South’s jobs market is diverging,” said David Williams, Bristol office senior partner at KPMG UK.

“Employers are still reluctant to commit to permanent hiring, with tighter budgets and hiring freezes continuing to weigh on longer-term recruitment decisions.

“At the same time, the sharpest rise in temp billings for three years shows that businesses still need access to skills and capacity – they are just choosing to do so in a more flexible way.”

Candidate availability rose again, adding to the softer tone. Permanent candidate numbers increased at the fastest pace of 2026 so far, and temp worker supply also climbed, reflecting redundancies and slower hiring. That higher supply, combined with weaker demand, kept pay growth subdued.

Starting salaries for permanent hires rose only marginally, the slowest pace in seven months and well below longer-term norms.

Temp wages also increased, but only modestly and at a slower rate than in April. Recruiters pointed to higher living costs and skills shortages as support for pay, but said rising candidate numbers and tighter client budgets were limiting growth.

Neil Carberry, REC chief executive, said temporary work was filling the gap as businesses “tap the brakes on permanent hiring” in response to uncertainty, higher costs and new employment rules.

“Temp billings growth hit a three-year high in May in the South of England,” he said. “This is a huge strength for workers and employers across the country, as it keeps the wheels turning in challenging times.”

Dan Barfoot, operations manager at Wiltshire and Bath recruitment firm CMD Recruitment, whose local findings fed into the report, said: “With the recent rise is hourly rates and workers rights, that this shift was always going to happen.

“The government are looking to move away from zero hours contracts, but with the cost of hiring, companies are looking for the flex on their workforce without all of this commitment.

“The issue any business has is they don’t want the commitment, but they want the continuity with staff and with options out there for candidates. How do they balance this?

“We counteract this by working with the client to plan temporary labour, as this is what a recruitment partner should be.”

His advice? “Don’t be reactive but proactive in planning, as in the long run can save time and money.”

Image by Vitaly Gariev on Unsplash