Recruiters Bulletin Jan 26

Recruiters’ Bulletin (January 26)

Headline: Cautious hiring, rising candidate supply and stabilising EU labour markets shape recruitment in early 2026

Recruitment in the UK

Market backdrop
UK hiring conditions have remained subdued going into 2026. Latest industry surveys point to continued contraction in both permanent and temporary recruitment activity amid ongoing weak employer confidence, rising operating costs and broader economic uncertainty — though some pay indicators have shown tentative improvement.

Permanent market

Declining placements: The KPMG/REC Report on Jobs for December 2025 shows permanent staff appointments fell for the 39th consecutive month, with the rate of contraction the steepest since August. This reflects sustained caution among employers on headcount expansion.

Vacancies and demand: Demand for permanent workers weakened further at the end of 2025, with vacancies falling more sharply than for temporary roles. Recruiters report broader restraint as businesses reassess growth plans and budgets.

Candidate supply: Greater availability of candidates — both permanent and temporary — has emerged due to redundancies and slower hiring, giving recruiters more choice but slowing placement rhythms.

Pay trends: Starting salary inflation for permanent hires has edged up, reaching a multi-month high, even as overall pay growth remains moderate. This suggests niche skill sets continue to attract premium offers where they are in short supply.

Temporary / contract market

Softening but resilient segments: Temporary billings declined mildly at the end of 2025, but the drop was less severe than earlier in the year, and short-term demand remains in areas like project delivery, professional services and specialist skills where firms prefer flexibility.

Strategic use of contract talent: Many organisations continue to deploy temporary/contract workers to manage peaks, cover skills gaps (e.g., digital transformation, compliance functions) and control fixed cost exposure amid persistent economic caution.

Sector & recruiter observations

Skills-led hiring persists: Specialist tech, sales and compliance roles are outperforming broad generalist hiring. Recruiters with deep sector expertise are securing more briefs and faster decisions.

With increased supply, the focus on candidate experience, process speed, and offer clarity differentiates successful consultancies.

APSCo insights: APSCo reports that its membership continues to advise clients on workforce planning rather than on rapid headcount gains, underscoring the advisory shift consultancies are making amid uncertain conditions.

Regional & junior markets

Entry-level pressure: Anecdotally, recruiters report greater competition for junior roles, with jobseekers outnumbering vacancies by wider margins than a year ago, particularly in sectors like hospitality and retail.

Recruitment in the EU

Labour market context

Labour markets across the EU remained broadly stable in late 2025, with unemployment relatively steady and employment rates holding up, despite uneven national performance and differing sector dynamics.

Key EU labour indicators

Unemployment rates: In October 2025, the unemployment rate was 6.0% for the EU overall and 6.4% in the euro area, largely unchanged from the prior month but slightly higher year-on-year. Youth unemployment remains elevated relative to overall rates.

Employment stability: Employment rates for working-age adults (20–64) were stable through Q3 2025, signalling ongoing resilience across many member states.

Hidden slack & labour utilisation: Broader labour market slack — including those actively seeking work but not fully captured in unemployment figures — remains meaningful, suggesting underemployment and labour under-utilisation still influence candidate availability and recruitment strategies.

Permanent market trends

Sector-specific divergence: Markets such as digital services, professional services and export-oriented manufacturing continue to recruit experienced specialists, whereas broader cyclical hiring (e.g., low-paid, domestic-focused segments) shows limited momentum.

Skills demand: Consultancies report demand for multilingual sales, regulatory/compliance specialists and digital transformation talent, reflecting structural EU labour shifts and cross-border business priorities.

Temporary / contract market

Policy & project effects: Contract and interim hiring have been supported in countries where EU-level funding and project cycles generate short-term demand (e.g., sustainability programmes and digital skills initiatives).

Geographic variation: Southern and peripheral EU markets exhibit weaker hiring momentum and relatively higher unemployment, while parts of Central and Northern Europe show more robust activity, influencing how consultancies position talent solutions.

Recruiter positioning & EU nuances

Cross-border complexity: Recruiters emphasise compliance (local labour law, social contributions) in cross-border placements, adding value with guidance on mobility, tax and contract structures.

Talent shortages vs slack: Some regions reveal genuine shortages in high-skill areas even as headline unemployment moderates — making consultancies’ market insights critical to clients’ workforce planning.

Practical takeaways for Recruiters

Double down on specialisation — consultancies with focus in growth sectors (tech, regulated industries, exports) are most likely to convert briefs amid muted general hiring.
Speed and clarity — market conditions reward fast, transparent processes with clear salary and career progression details.
Candidate segmentation — with candidate supply up, quality filtering and briefing become differentiators for long-term relationships.
Data-informed advising — use updated labour market data (REC, Eurostat) to counsel clients on realistic timelines, compensation and market dynamics.

Sources and Further Reading:

REC UK Report on Jobs / KPMG surveys — permanent placements and temp billings trends.
Eurostat labour market indicators — EU unemployment and employment rates.
Labour market slack and EU dynamics — broader labour supply context.
Industry commentary — APSCo insights and recruiter practices.

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Please note the information contained herein is an aggregate of news stories, official statistical sources, and commentary by commentators and organisations widely available - readers should seek independent verification, and this in no way represents the views or opinions of Standley Business Services.

We will continue to check the news reports and will provide monthly summaries of the trends