The UK recruitment market is finally showing signs of improvement. But this is not a broad recovery, and it will not create the same opportunities for every agency.
The latest KPMG and REC UK Report on Jobs found that permanent placements increased for the first time since September 2022, while temporary billings grew for the fifth consecutive month. However, vacancies continued to fall, candidate availability increased and performance varied significantly across regions and sectors.
The direction is encouraging. The detail is what matters.
The Recovery Will Not Arrive Everywhere at Once
Permanent placements increased across London and the Midlands but continued to fall in the North and South of England. Temporary billings followed a different pattern, rising across three of the four monitored regions and recording their strongest growth in the North.
This means agencies cannot simply wait for the wider market to recover. They need to understand where demand is returning, which clients are ready to hire and where their specialist expertise gives them a genuine market advantage.
The recovery is creating opportunities, but agencies will need to go looking for them.
Employers Still Want Flexibility
The continued growth of temporary and contract recruitment shows that many employers remain cautious about committing to permanent headcount.
For recruitment agencies, this creates an opportunity to build more consistent and scalable revenue. A strong temporary or contract book can deepen client relationships, create recurring income and make the business less dependent on individual permanent placements.
However, it also changes the financial demands placed on the agency. Workers must be paid accurately and on time, often weeks before the client settles the invoice. As contractor numbers increase, so do the agency’s payroll, compliance and administrative responsibilities.
Without the right funding and operational support, winning more business can quickly create greater pressure on cash flow.
Permanent Recruitment Is Moving Again
The return to growth in permanent placements is another positive signal, even if the improvement remains marginal.
After a prolonged period of delayed decisions and reduced hiring confidence, more employers are beginning to act. Agencies that have remained close to their markets, strengthened client relationships and continued developing specialist candidate networks will be best placed to benefit.
The commercial model matters too. Solutions such as APay allow clients to spread the cost of permanent recruitment fees while the agency receives its fee upfront. This can help agencies overcome budget objections, protect cash flow and make it easier for clients to move forward with the right hire.
Growth Requires Capacity
The Office for National Statistics estimated that UK vacancies had fallen to their lowest level since early 2021. Vacancies declined across ten of the eighteen industry sectors measured, with businesses employing between one and nine people recording the largest decrease.
This reinforces why agencies need to be selective about where they invest.
Being ready for recovery does not mean adding unnecessary fixed costs or expanding without a clear strategy. It means having flexible capacity that can grow alongside demand.
That could mean having access to funding before payroll falls due, improving timesheet and invoicing processes, or having an operational support team that can scale alongside the agency.
Agencies that prepare early will be able to respond faster when clients need to hire quickly or access specialist talent at short notice.
Is Your Agency Built for an Uneven Recovery?
The UK recruitment market is moving in the right direction, but the recovery remains fragile and highly selective.
Success will not come from waiting for every sector and region to improve. It will come from identifying where demand is emerging, building stronger client partnerships and having the financial and operational capacity to act when opportunities appear.
At APositive, we help UK recruitment agencies build that capacity through specialist funding, managed payroll and flexible payment solutions designed for the recruitment industry.
Speak with APositive today to find out how we can support your recruitment agency.
