The KPMG/REC Report on Jobs is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers to provide an indication each month of labour market trends. Here are some of the key points from the February 2025 survey.

• Demand for staff continues to fall rapidly
• Availability of workers increases at quicker pace
• Starting salaries inflation continues to slow

Commenting on the latest survey results, Jon Holt, Group Chief Executive and UK Senior Partner KPMG, said:

“While it is still a wait and see approach to hiring, with February data showing companies continue to hold back on recruitment, the softer decline could be an indication that expectations of further interest rate cuts and better than expected recent economic data are starting to release some of the pressures on business. “But several headwinds to growth remain, and we should expect a Spring Statement that is fiscally constrained due to growing spending pressures and global uncertainty. Despite this uncertainty, businesses which are well capitalised will be looking for signals to support future planning and growth, and with that will come confidence to invest and create jobs.

Commenting, Neil Carberry, REC Chief Executive, said:

“After a long winter, there are some hints of a turn in the labour market as we head into Spring. This is led by the private sector – despite recent tax rises – and that shouldn’t be missed. Enabling companies to grow is at the heart of our prosperity – the Chancellor must use the Spring Statement to build their confidence in growth. At the moment, though, things are still slow as companies hold their breath in the face of significant costs rises from April with changes to National Insurance and the National Living Wage. Getting the Industrial Strategy flying is a key part of this – for the whole economy, not just key sectors – as is addressing policies in the Employment Rights Bill so they do not prove to be a brake on growth. “Despite a long slowdown, some areas still face skill shortages. This comes from mismatches, training gaps and the impact of an ageing population. Addressing productivity through technology and better management will be critical to addressing this, and recruitment firms will be key partners for businesses in changing their approach. Pay growth is easing and broadly unchanged across much of the country which should please the Bank of England rate setters

The main findings for February are:

Softer deterioration in recruitment activity
The latest KPMG/REC Report on Jobs survey indicated that staff hiring continued to decline during February, but not as quickly as at the start of the year. Permanent staff appointments fell for the twenty-ninth month in a row amid reports that companies had paused or pared back hiring plans due to a weaker economic outlook and increased payroll costs. Though sharp, the latest drop in placements was the softest since last October. The downturn in temp billings meanwhile eased from January’s 55-month record, but remained solid overall.

Starting salary inflation weakens to four-year low
The rate of starting salary inflation slowed for the second straight month in February. The respective seasonally adjusted index posted its lowest reading in four years and one that was well below the survey’s average. There were reports that pay rates were showing signs of levelling off, which in turn was linked to weaker demand for staff, improved candidate numbers and tighter budgets. Temp pay growth meanwhile remained marginal.

Availability of workers increases at quicker pace
February data indicated faster increases in the availability of candidates for both permanent and temporary roles. Recruiters frequently attributed the upturn in staff availability to redundancies and fewer job opportunities amid a weaker economic backdrop. Overall, candidate supply increased at a sharp rate that was broadly in line with the average seen over 2024 as a whole.

Demand for staff continues to fall rapidly
Recruitment consultancies signalled a reduction in overall vacancies for the sixteenth month running in February. Notably, the respective seasonally adjusted index held close to January’s 53-month low and was consistent with a substantial drop in demand for workers. Permanent vacancies continued to decline at a slightly sharper pace than that seen for temporary roles

Enigma People Solutions is an award-winning technology recruitment consultancy. We find technical leaders for the emerging and enabling technology industries. Visit our services page for more information. Visit our job search page for the latest vacancies in photonics, electronics, semiconductor, software and IoT in Scotland and the UK. Check out our blog page for the latest in the technology industry. You can get in touch with us hello@enigmapeople.com or call us on + 44 131 510 8150