KPMG and REC Report on Jobs, October 2026: permanent placements rise for a second month

This article is for recruitment agency owners and directors who want to know where the jobs market is heading and what it means for their cash flow. The latest KPMG and REC UK Report on Jobs, compiled by S&P Global from a survey of recruitment and employment consultancies, suggests hiring is starting to recover. Below we set out the figures and the funding options for agencies. Smart Funding Solutions is a broker, not a lender: we compare whole-of-market options across 300+ lenders, arranging funding from £10,000 to £20 million.

01The headline findings

The October 2026 Report on Jobs, covering September, found:

• Permanent placements rose for the second month in a row, at the strongest pace in four years, although the increase was still marginal.
• Temp billings also rose marginally, though at the slowest rate in five months.
• Vacancies fell at the weakest rate in more than two years, and private sector permanent vacancies improved for the first time in more than two years.
• Candidate availability kept rising sharply, but at the slowest pace in three years.
• Pay growth moderated. Permanent starting salary growth slowed for the first time in four months, and temp pay growth eased to a four-month low.

02Regions and sectors

Three of the four English regions monitored saw more permanent placements, led by the North, while the South was the only region to record a fall. Temp billings rose markedly in the North and Midlands but fell sharply in London, ending four months of growth there.

By sector, permanent staff demand rose in half of the ten sectors monitored, led by IT and computing and engineering. Retail and hotel and catering saw the sharpest falls in vacancies. Demand for temporary staff rose only in blue collar, IT and computing, and nursing, medical and care roles.

03What KPMG and the REC said

Jon Holt, group chief executive and UK senior partner at KPMG, said: "For the second month in a row we are seeing the jobs market starting to flicker back to life", but added "this remains a fragile recovery". He said businesses "will be looking to the Budget later this month for greater certainty in tax policy".

Maxine Bligh, interim chief executive of the REC, said: "The permanent jobs market is revving its engine, with a second successive month of growth." She added that "A Budget that gets business confidence moving again is key to keeping that momentum going."

Three of the four English regions monitored saw more permanent placements, led by the North, while the South was the only region to record a fall.

04What a recovery means for agency cash flow

Growth is good news, but it ties up cash. An agency placing more temps pays them every week, while clients often pay on 30 to 60 day terms or later. Permanent fees are usually invoiced on placement, but rebate periods and slow-paying clients can still leave a gap. The faster an agency grows, the bigger that gap becomes.

The government's Commercial Payments Bill would cap payment terms when large businesses pay smaller suppliers, but it is not yet law. Until then, agencies need to fund the wait themselves.

05Funding options for recruitment agencies

• Invoice finance releases most of an invoice's value as soon as it is raised, so you can pay contractors on time.
• Invoice factoring includes credit control by the provider, while invoice discounting leaves collections with you. Our guide to factoring vs discounting compares them.
• Loans to pay wages cover payroll while you wait to be paid.
• Working capital loans fund new desks, consultants and marketing.

Our recruitment finance page explains how lenders view agencies, and our guide to what invoice finance costs sets out the fees to expect.

06What lenders look at for agencies

Invoice finance providers look mainly at your clients rather than your agency's balance sheet. They will want to know who your largest clients are, how much of your book each one makes up, how quickly they pay and whether timesheets are signed off before invoices are raised. Agencies with a spread of creditworthy business clients usually get the best terms, while one dominant client can limit how much is advanced. Providers also check how you handle payroll, PAYE and contractor compliance. For the detail behind the headline report, The Global Recruiter lists the indices: the permanent placements index was 50.9 in September and the temporary billings index 50.9, with the North of England leading at 53.6 for permanent placements.

07How to compare your options

1. Work out your weekly payroll and how long clients take to pay.
2. Decide whether to fund all your invoices or only some of them.
3. Have your aged debtors list, client contracts and latest accounts ready.
4. Use Instant Quotes to see your lender matches instantly, with no credit check.
5. Compare offers on the total cost, including service fees, and on how quickly funds are released.

The jobs market is recovering, slowly. Get your Instant Quotes to see which lenders could fund your agency's growth. Lenders make every decision, and all finance is subject to status.