UK businesses are increasingly turning to temporary workers as weak confidence, rising costs and global uncertainty make employers more cautious about permanent recruitment.
A new report from recruitment firms found that permanent staff appointments fell in May at the fastest rate for 10 months. Employers appear reluctant to expand their long-term workforce while the economic outlook remains uncertain.
Political uncertainty in the UK and continuing conflict in the Middle East have added to concerns over costs, inflation and future demand, encouraging many businesses to keep staffing arrangements flexible.
The findings are based on a survey of 400 UK recruitment and employment consultancies carried out in mid-May. Recruiters reported that more people were looking for work, partly because of redundancies, fewer vacancies and growing concerns about job security.
At the same time, demand for staff has weakened as businesses operate with tighter budgets. This has limited wage pressure, with both starting salaries for permanent roles and temporary pay rates rising only modestly compared with the previous month.
The nursing, medical and care sector was the only area covered by the report to record an increase in demand for permanent employees. Retail experienced the sharpest fall in permanent vacancies, reflecting continued pressure on consumer-facing businesses.
The report adds to wider signs of weakness in the UK labour market. Recent official figures showed unemployment rising unexpectedly to 5% in the three months to March, while wage growth has continued to slow.
Concerns are particularly acute for younger workers. A recent government-backed report warned that more than one million young people are now outside employment or education—the highest number in more than a decade.
For employers, temporary recruitment offers a way to respond to changing workloads without committing to longer-term costs. However, the shift also points to a labour market where confidence remains fragile and permanent opportunities are becoming harder to secure.
