MARKET SNAPSHOT: 5 Key Numbers
49.2 Permanent placements index (still declining, but at the slowest rate in 3 years)
48.4 Temporary billings index (decline easing month-on-month)
46 Vacancy index (falling, but at the slowest pace in 10 months)
45.6 Construction PMI (continued contraction, led by weak housing demand)
50.5 Services PMI (still growing, but at its weakest level in 11 months)
Stability emerging… but confidence still fragile
March’s data paints a picture that most recruiters will recognise:
- The market isn’t falling apart anymore
- But it’s not fully bouncing back either
Instead, the UK recruitment market is sitting in a “slow stabilisation” phase, shaped by cautious hiring, rising candidate availability, and wider economic uncertainty.
Hiring activity: slowing decline, early signs of stabilisation
The latest KPMG/REC Report on Jobs shows:
- Permanent placements still falling, but only marginally
- Temp billings also down, but easing
- Demand for staff declining at the softest pace in 10 months
Some employers are now restarting previously paused hiring plans, signalling early confidence returning.
But here’s the reality most agencies are feeling:
- Hiring decisions are taking longer
- Offers are more scrutinised
- Cash flow and cost control are front of mind
That’s why we’re seeing more conversations around invoice finance and invoice funding as agencies look to maintain momentum despite slower deal cycles.
Candidate supply rising – shifting the balance
March saw candidate availability rise at the fastest pace this year.
At the same time:
- Salary growth has softened
- Clients have more choice
- Competition between candidates is increasing
For agencies, the challenge shifts: placements are still there but they’re harder to secure.
And in a market where placements take longer to convert, understanding what invoice finance is (and how it supports working capital between deals) becomes increasingly relevant for growing agencies.
Vacancies: still falling, but stabilising
Vacancies across both permanent and temporary roles have now been declining for nearly 2.5 years, but the pace of decline is easing.
Permanent demand continues to see the steeper reductions, while temporary roles have shown slightly more resilience.
This is important. It signals:
- The market is no longer deteriorating quickly
- We’re moving into a plateau phase before recovery
For recruiters, that means:
- More predictability than 2025
- But not yet a return to high-growth conditions
In this kind of environment, agencies are often reviewing their funding setup – whether that’s traditional facilities or exploring invoice financing through specialist invoice factoring companies to smooth cash flow while placements rebuild.
Sector watch: construction remains under pressure
The UK Construction PMI shows continued contraction:
- Activity at 45.6
- Housing particularly weak
- New orders falling at the fastest pace since late 2025
Confidence is being hit by:
- Delayed projects
- Rising costs
- Client caution
For recruiters operating in construction or blue-collar sectors, this creates a knock-on effect:
- Fewer new roles
- Longer sales cycles
- Greater reliance on existing contractor books
Which is exactly where models like invoice funding or factoring in business become critical – supporting payroll and continuity even when new deal flow slows.
Services: still growing, but momentum fading
The UK’s largest sector is still expanding but only just:
- Services PMI at 50.5
- Weakest growth in 11 months
More importantly:
- New business has started to decline again
- Confidence is falling
- Employment is edging down
This reflects a broader shift:
- Clients are still spending but more cautiously
- Investment decisions are being delayed
For recruitment agencies, that often translates into:
- Extended hiring timelines
- More reliance on temporary or contract placements
- Greater need for flexible funding solutions like invoice finance to bridge the gap between invoicing and payment
The bigger picture: uncertainty is driving behaviour
Across this month’s for S&P Global reports, one theme stands out: Uncertainty is shaping hiring decisions
- Employers are risk-averse
- Projects are being delayed
- Costs are under scrutiny
Even globally, manufacturing is seeing:
- Slower growth
- Rising input costs
- Falling confidence
That uncertainty feeds directly into the UK hiring market and into how agencies manage growth.
What this means for recruiters
This isn’t a downturn in the traditional sense. It’s a reset in how the market operates.
Right now, success looks like:
- Moving faster than client hesitation
- Adding value beyond CVs
- Managing expectations clearly
- Protecting cash flow and operational stability
Because in a market where deals take longer and confidence is fragile, having the right financial structure, whether through retained earnings or tools like invoice financing, can be the difference between standing still and continuing to grow.
Rik King, Director, QUBA Solutions comments:
“What we’re seeing in the UK recruitment market right now is a shift from decline to stabilisation. Hiring hasn’t stopped, it’s just become more cautious, more considered, and more competitive. With candidate availability rising and client confidence still fragile, the agencies that will win are those that can maintain momentum, manage cash flow effectively, and guide clients through uncertainty, not just react to it.”
Want to understand how this impacts your cash flow?
In a market where placements are taking longer and hiring decisions are more cautious, how your funding works behind the scenes matters more than ever.
If you’re reviewing your options or simply want a clearer picture:
- What is Recruitment funding and how does it work?
- Self-funding vs through a provider
- Thinking about starting a recruitment business? Here’s a few things to think about
- Thinking of transferring from your existing funder? Here’s some reasons why you should
At QUBA, we work exclusively with recruitment agencies, supporting them with funding, operational support and technology designed for the way recruiters work. Explore how QUBA helps agencies grow with confidence: Talk to the team
Important: This information is for educational purposes based on information correct on 13 April 2026.
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