Hiring activity across the UK showed signs of stabilising in March, but growing global uncertainty linked to the Gulf crisis is already weighing on employer confidence and could delay any sustained recovery.
Recruitment data indicates that permanent placements fell again, but only marginally, marking one of the weakest declines seen in recent years. At the same time, demand for staff continued to weaken, although the pace of decline eased to its slowest level in ten months.
The figures suggest the jobs market may be reaching a turning point after a prolonged slowdown, though the outlook remains finely balanced as external pressures begin to build.
Employers remain cautious as uncertainty grows
The data comes from a monthly survey by KPMG and the Recruitment and Employment Confederation, compiled by financial information group S&P Global, based on responses from around 400 recruitment consultancies.
Jon Holt, group chief executive and UK senior partner at KPMG, said employers were beginning to move ahead with hiring plans that had previously been delayed, but warned that uncertainty could quickly reverse that progress.
“Despite the increased global uncertainty, there have been signs this year that the long-term decline in hiring may be starting to stabilise as businesses press ahead with their previously delayed recruitment plans,” he said.
“However, until the wider economic impacts of the conflict in the Middle East start to become clearer, many employers will remain cautious about committing to new roles. If that uncertainty remains, the risk is that hiring decisions and investment are deferred again, delaying any sustained recovery in the jobs market.”
The comments reflect growing concern among employers that geopolitical developments could undermine fragile confidence at a time when hiring activity is only just beginning to steady.
Rising candidate numbers ease pressure on pay
At the same time, a sharp increase in candidate availability is changing the balance of the labour market. The supply of workers rose at the fastest pace seen so far this year, with recruiters pointing to redundancies and fewer job opportunities as key drivers.
The increase in available labour is beginning to feed through into pay. Starting salaries and temporary wages both rose only marginally in March, with growth slowing to its weakest level in several months as employers faced less pressure to compete for talent.
The combination of weaker demand and rising supply suggests that upward pressure on wages may continue to ease in the months ahead.
Recovery remains fragile despite signs of stability
Despite ongoing challenges, there are indications that the jobs market is becoming more resilient after a prolonged downturn. Permanent placements recorded their weakest contraction in three years, while temporary billings also declined at a slower pace than in previous months.
Neil Carberry, chief executive of the Recruitment and Employment Confederation, said the market had shown resilience despite external pressures.
“The Gulf Conflict provided a headwind to hiring in March, but this did not stop the trend of stabilisation that has defined 2026 so far. The effects of a longer-run crisis are unclear, but the resilience of the jobs market last month was heartening.”
He added that confidence would be critical in determining whether the market can move beyond its current plateau. “Business prospects for 2026 remain finely balanced, and confidence will be key.”
The data suggests that while the worst of the hiring slowdown may be easing, the direction of travel will depend heavily on how economic and geopolitical risks develop in the coming months.
William Furney is a Managing Editor at Black and White Trading Ltd based in Kingston upon Hull, UK. He is a prolific author and contributor at Workplace Wellbeing Professional, with over 127 published posts covering HR, employee engagement, and workplace wellbeing topics. His writing focuses on contemporary employment issues including pension schemes, employee health, financial struggles affecting workers, and broader workplace trends.
- William Furney
- William Furney
- William Furney
- William Furney
