The number of people seeking work in the UK rose sharply in August, driven by mounting redundancies and heightened insecurity in existing jobs, even as the permanent hiring market showed its first signs of recovery in nearly four years.

Total staff availability increased at its fastest pace in three months as Britons hunting for roles flooded the market, according to the latest employment report from KPMG and the Recruitment and Employment Confederation (REC), a long-running monthly survey of UK recruitment consultancies that tracks hiring conditions across both permanent and temporary staffing. The influx was triggered by ongoing corporate layoffs and growing anxiety among workers over the security of their current employment.

Permanent job placements recorded a marginal uptick, with the index reading 50.5 – breaking above the neutral 50.0 mark, where readings above signal growth and below signal contraction, to mark growth in permanent hiring for the first time since September 2022. Temporary billings expanded to 52.4, as cautious employers favoured flexible, short-term contracts over long-term headcount – a pattern that has persisted across much of the UK labour market's recent soft patch.

"This is clearly encouraging after such a prolonged downturn in hiring, but the jobs market continues to contract overall," said Jon Holt, group chief executive and UK senior partner at KPMG.

With the first Budget for Andy Burnham and Chancellor John Healey set for next month, Holt added that the government has an "opportunity to turn these green shoots into sustained positive momentum".

Burnham warned not to take the jobs market for granted

Maxine Bligh, interim chief executive of REC, said: "This is not the time to take the job market for granted. Instead, government should follow through on its commitment to lessen burdens on business."

Despite the lift in permanent placements, overall demand for workers fell for the 34th consecutive month, sending nationwide ONS vacancies down to 707,000 – the lowest non-pandemic level since November 2014. The divergence between recovering placements and falling vacancies points to employers filling roles selectively rather than expanding overall headcount, leaving the recovery fragile.

Retail and hospitality suffered the steepest declines in job openings, while public sector labour demand contracted across both permanent and temporary roles.

Bligh said improving momentum across the jobs market meant "greater pragmatism on the employment rights agenda, including lessening the gamble the government is taking with its guaranteed hours policy".

"It also means delivering an Autumn Budget that demonstrates the government is serious about backing business and provides employers with the confidence they need to hire, invest and grow," she added. For now, the signals point to a tentative turnaround in permanent hiring set against a labour demand backdrop that remains historically weak.