KPMG, REC data | UK job market downturn persists as hiring slows further

The UK labour market continued to deteriorate at the start of 2025, as recruitment activity declined amid rising redundancies and business uncertainty, the latest KPMG and REC UK Report on Jobs survey has revealed.

Compiled by S&P Global, the report signalled a further drop in both permanent and temporary placements in January, extending the contraction in hiring to 28 months. The findings suggest employers remain hesitant to recruit amid concerns over rising employment costs and weak business confidence.

Hiring activity tumbles in January

The first KPMG/REC Report on Jobs survey of 2025 showed a further sharp decline in permanent placements, with demand for workers continuing to weaken. The pace of decline was largely unchanged from December’s 16-month record low.

Temp billings saw an even steeper fall, recording their fastest rate of contraction since June 2020. According to recruiters, uncertainty surrounding the cost of employment has led businesses to delay hiring decisions, with some firms implementing redundancy measures to manage costs.