September Greenshoots: Permanent Hiring Is Growing Again

Is the Recruitment Cycle Finally Turning?

For more than three years, I have used Recruitment Greenshoots to look beyond the headlines and identify the early signals that tell us where the recruitment market might be heading next.

September may have given us the strongest signal yet.

For the first time since September 2022, permanent placements have returned to growth. At the same time, temporary billings have increased for a fifth consecutive month, business confidence has strengthened again, services growth has accelerated and manufacturers are increasing employment at the fastest rate for more than two years.

After several months of talking about the early stages of recovery, I think we can now be more confident: the recruitment cycle appears to be turning.

Temporary Led the Recovery. Permanent Is Starting to Follow.w

The September KPMG/REC Report on Jobs is particularly significant. Its Permanent Placements Index moved above 50 to 50.5 - marginal growth, certainly, but the first increase in almost four years.¹

Temporary recruitment remains even stronger. Temp billings increased for the fifth consecutive month, at the second-fastest rate in more than three years. Starting salaries also recorded their strongest increase since January.¹

This follows the pattern we have been highlighting throughout 2026. Faced with uncertainty, employers initially turned to temporary and contract workers to provide flexibility. What we may now be seeing is the next stage of that recovery as confidence begins to translate into permanent hiring.

Confidence and Demand Are Strengthening

Recruitment doesn't recover in isolation. Businesses recruit when they believe future demand justifies investment in people.

That's why the latest Lloyds Business Barometer is encouraging. Confidence increased to 53% in August, its highest level since March, while economic optimism is now 18 points higher than it was in June.²

The wider economy is providing supporting evidence too. The UK Services PMI reached 52.5, its strongest expansion since April,³ while UK manufacturers increased employment at the fastest rate for more than two years.⁴

None of this means recruitment has suddenly become easy. Vacancies remain subdued, candidate availability is high and sectors such as housebuilding continue to face challenges.

But Greenshoots has never been about pretending every indicator is positive. It's about identifying where growth is emerging before everybody else sees it.

Follow the Investment

And this month's investment signals are difficult to ignore.

A £300 million AI investment in Lanarkshire is expected to support more than 3,400 jobs.⁵ Almost £130 million of automotive investment will support more than 1,800 skilled jobs.⁶ Defence-supported employment increased by 26,000 jobs in a single year,⁷ while investment in energy storage is opening another specialist technical market.⁸

Look beneath those headlines and there is an important message for recruitment leaders.

Growth isn't confined to one sector.

AI investment creates opportunities in data centres, M&E, power, construction and project management as well as technology. Defence spending flows into engineering, manufacturing and specialist supply chains. Energy investment requires skills that are already scarce.

There isn't one UK recruitment market. There are multiple markets moving at different speeds.

Now Is the Time to Prepare for Growth

For the past few years, leadership teams have understandably concentrated on protecting margins, retaining good people and navigating a difficult market.

That mindset now needs to be balanced with a renewed focus on growth.

This doesn't mean indiscriminately hiring consultants or assuming every client is about to start recruiting again.

It means asking better questions.

Where are clients investing? Which sectors are creating jobs? Where will skills shortages intensify? Do our consultants have the BD capability and sector knowledge to open those markets?

And increasingly, there is another question: how are we using AI ourselves? Not simply to automate tasks, but to improve market intelligence, productivity and the quality of conversations we have with clients and candidates.

Interestingly, Lloyds reports that 54% of UK businesses surveyed say AI has already created new jobs within their organisations.⁹ AI isn't simply eliminating work; it is changing work and creating demand for new capabilities.

September doesn't tell us that recruitment has fully recovered.

But after almost four years without growth in permanent placements, it gives us the strongest evidence yet that the cycle may finally be turning.

The opportunity now is to make sure your business is positioned where the growth is going—not where it has been.

Sources

1. KPMG/REC Report on Jobs - September 2026:
   REC - Permanent placements increase for first time in nearly four years
2. Lloyds Business Barometer - August 2026:
   Lloyds - Business confidence highest since March
3. UK Services PMI - August 2026:
   Reuters - UK economy gathers pace as PMI strengthens
4. UK Manufacturing PMI - August 2026:
   Reuters - UK manufacturing hiring strengthens
5. £300m Lanarkshire AI Growth Zone:
   UK Government - Lanarkshire AI investment
6. £130m next-generation vehicle investment:
   UK Government - Automotive investment supporting 1,800 jobs
7. Defence-supported employment:
   UK Government - Defence-supported jobs increase
8. £28m energy storage programme:
   UK Government - Ultra-Long Duration Energy Storage Challenge
9. AI and UK employment:
   Lloyds Banking Group - 2026 press releases