Temp & Contract Hiring Accelerates As Employers Choose Flexibility Over Risk

The latest KPMG & REC UK Report on Jobs shows contract billings growing at their fastest pace in years, while permanent hiring finally stabilises.

The KPMG and REC, UK Report on Jobs for August 2026 (data collected 9–27 July) shows a UK hiring market clearly tilting toward flexible, contract resource. Permanent placements have stabilised after a record 45-month downturn, while temp billings have risen for a fourth straight month at one of the quickest rates since early 2023. Demand for temporary workers is climbing again too, marking the first rise in two years.

The Headline Numbers

Employers are pressing ahead with investment, but they’re doing it through flexible workforce solutions rather than permanent risk. The report points to:

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Temp billings growth: among the quickest since early 2023, up for a fourth consecutive month

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Temp vacancies rising again: the first increase in two years, and the fastest pace since August 2023

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Permanent hiring stabilising, ending the longest downturn on record for the index (45 months)

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Pay growth accelerating, with starting salaries at a 6-month high and temp wages at a 26-month high

As REC’s Maxine Bligh put it, employers are reviving hiring plans and leaning on temporary and contract workers first, while permanent hiring finds its feet.

Why This Matters For You

This is exactly the pattern we’re seeing on the ground: businesses want capability now, without committing to permanent headcount while the wider picture is still settling. I’ve spent almost 10 years specialising in contract Software, Data and AI Engineering, supplying clients across Scotland and the rest of the UK with contractors who can plug a skills gap or push a stalled project over the line, fast. If flexible resource is climbing your agenda too, I’d welcome the conversation.

45 months of permanent placement decline just ended

Temp billings and temp vacancies are now growing at their fastest rates in years. KPMG & REC, UK Report on Jobs, August 2026.

Worth a conversation?

If you have a need for an extra pair of hands to push a project over the line, or have a skills gap within the team, let’s talk about how a contractor could help.

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Source: KPMG and REC, UK Report on Jobs, August 2026, compiled by S&P Global from a panel of around 400 UK recruitment and employment consultancies.