Press release from QUBA Solutions
As employers prioritize flexibility, temporary hiring is on the rise
The latest hiring and economic data show a slightly different picture from the cautious stabilization we saw earlier this year.
The UK recruitment market is still far from fully recovering, but one area is beginning to emerge more clearly: temporary and contract recruitment.
across the latest reports from S&P Global And kpmg/recEmployers are increasingly turning to flexible workforce models as they adapt to ongoing economic uncertainty, rising costs and slower decision-making processes.
To recruiters, this matters.
Because while permanent hiring remains soft, the temporary market is showing signs of real movement, and agencies that can support contract and temporary hiring are increasingly well placed.
Market Snapshot: 5 Key Numbers
50.4
Temporary Billing Index (strongest increase in 2.5 years)
47.5
Permanent Placement Index (perm hiring still declining)
46.2
Vacancy Index (Vacancies are gradually decreasing)
52.7
UK Services PMI (services sector still expanding)
39.7
Construction PMI (construction activity remains weak)
Temporary appointment is becoming a safe option for employers
One of the most obvious themes in this month’s data is caution.
Businesses are still hiring but many are avoiding long-term commitments where possible.
This is helping to drive strong demand for temporary and contract workers, with April’s temporary billings growth reaching its strongest level in two and a half years.
REC chief executive Neil Carberry summed it up clearly:
“The good news is that employers are leaning more on temporary work to move their plans forward in these more uncertain times.”
This is important for recruiters.
We are seeing more agencies that have historically focused on permanent recruitment begin to explore the temporary and contract markets – not just because of market pressure, but because clients increasingly want flexibility, speed and less long-term risk.
And if agencies don’t move forward with that change, competitors likely will too.
permanent appointment remains alert
Permanent hiring continues to decline nationally, with the latest index falling to 47.5 in April.
That said, the picture is more nuanced than it was earlier this year.
The pace of the decline remains softer than in 2025, suggesting the market is no longer deteriorating rapidly, but confidence is still not strong enough to drive a broad permanent expansion.
Businesses are delaying hiring decisions for the following reasons:
- economic uncertainty
- rising operating costs
- inflationary pressure
- Concerns about borrowing costs
- global geopolitical instability
This is creating long sales cycles and slow conversion timelines during recruiting.
For agencies, this often means:
- less predictable pipelines
- long cash conversion cycle
- More operational pressure between placement and payment
That’s why many recruiters are reevaluating how they manage cash flow, operational visibility and funding support, especially through solutions like invoice finance and invoice funding.
Regional trends: South and Midlands performing better
The latest KPMG/REC data also highlights notable regional differences.
Temporary billing performed particularly strongly:
- south of england
- midlands
Meanwhile, London and the North recorded mild conditions during April.
This regional variation matters for agencies assessing where demand is growing fastest, especially for agencies considering expansion into temporary hiring markets.
Which sectors are showing the highest demand?
The strongest temporary demand currently is coming from:
- Nursing, Medical and Care
- Blue collar sector (including logistics and transportation)
Meanwhile, engineering remains one of the more flexible permanent recruitment sectors.
Private sector demand also remains better than public sector hiring, especially for temporary employees.
This reflects a broader market trend: businesses still need resources and operational capacity – they’re just becoming more cautious about how they get it.
Britain’s broader economy still mixed
Outside of hiring, Britain’s broader economy continues to send mixed signals.
The UK services sector remains in growth territory, with the services PMI rising to 52.7 in April.
However, demand remains fragile, and businesses continue to report:
- high fuel costs
- supply chain disruption
- salary pressure increased
- delay in customer decision
At the same time, construction activity weakened sharply, with the construction PMI falling to 39.7, indicating the largest decline in output since November 2025.
Manufacturing continues to grow globally, but rising costs and supply chain pressures remain a concern for businesses internationally.
In short: The market is still operating in a cautious environment but resilience is increasingly winning.
What does this mean for recruitment agencies
The recruitment market is not picking up pace. But it is evolving.
And one of the most obvious changes at this time is the increasing importance of temporary and contract hiring within client workforce strategies.
For agencies considering temporary changes:
- cash flow concerns
- operational complexity
- funding risk
- payroll management
What can often feel like huge obstacles.
But increasingly, recruiters are looking at ways to overcome those operational hurdles through specialist recruitment funding assistance, invoice financing and outsourced back-office solutions.
Because in a market where clients want flexibility, agencies also need operational flexibility.
Insights from Jenny Underhay, Head of Sales at QUBA Solutions:
“Our latest insights reflect what market reports are now confirming – flexibility is driving employer demand for temporary solutions. This has driven many strong permit-based businesses to seek temporary and while cash flow and operational risks can feel like roadblocks, Cuban handles the funding, risk and back-office so agencies can move forward in the contract market without disruption.”
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Important: This information is for educational purposes and is based on information correct as of May 12, 2026.
sources say
KPMG and REC UK report on jobs
