Despite ongoing economic uncertainty, July’s data reinforces a message that has been building steadily over recent months: the UK recruitment market is entering a new phase of selective recovery.
This is not a market that is rising across every sector or every geography. Permanent recruitment remains cautious, many clients are still taking longer to make hiring decisions, and overall confidence is still mixed. Beneath the headlines, however, the market is becoming far more readable. Recruiters who understand where investment is flowing, and position themselves accordingly, are starting to pull away from the rest of the market.
The clearest signal this month comes from temporary hiring. The latest REC/KPMG Report on Jobs shows temporary billings increasing at their fastest pace for more than three years, while the decline in permanent placements continued to ease. Recruiters also reported improving pay trends as competition for skilled talent remained resilient. As we have seen in previous cycles, temporary and contract hiring often leads recovery because employers choose flexibility first when confidence is improving but still not fully settled.
Alongside that, hiring confidence remains more positive than the wider mood might suggest. ManpowerGroup continues to report strong hiring intentions for Q3, while Bullhorn’s market intelligence shows technology continuing to outperform, with engineering, manufacturing and professional services also showing encouraging momentum. Lloyds adds another layer to the picture, suggesting that while overall confidence softened slightly, internationally trading businesses remain significantly more optimistic than the wider market.
Perhaps the biggest shift, though, is that growth is no longer being driven by sentiment alone. It is increasingly being driven by real investment and clearer long-term demand.
The Government’s Defence Investment Plan, worth almost £300 billion over the next four years, alongside estimates of around 60,000 new defence-related jobs, represents one of the most significant long-term recruitment opportunities announced this year. Investment is also continuing across AI infrastructure, data centres, nuclear energy and transport. AI Growth Zones, the long-term commitment to Sizewell B, and Eurostar expansion all point towards sustained demand for engineers, project managers, technical specialists and skilled contractors.
That is what makes this month’s Greenshoots especially useful. The question for recruitment leaders is no longer simply, ‘Is the market improving?’ It is, ‘Where is the investment going?’
The agencies most likely to outperform over the next 12 to 24 months will be the ones that align their business development strategy with sectors experiencing genuine investment and structural growth. They will focus on where projects are moving ahead, where skills are scarce, and where long-term demand is starting to build.
July’s Greenshoots does not suggest the recruitment market has fully recovered. It tells us something arguably more valuable: the opportunities for growth are becoming much easier to identify.
The agencies that recognise those patterns first, and act on them decisively, are likely to lead the next phase of recruitment growth.
Market signals behind this view (click headings to learn more).
REC/KPMG Report on Jobs
Temporary billings increased at their fastest pace for more than three years, while the decline in permanent placements eased further.
ManpowerGroup Q3 Employment Outlook
Hiring intentions remain positive for Q3, giving recruiters another useful sign that employer confidence is holding up better than expected.
Bullhorn Job Market Trends
Technology continues to outperform, with engineering, manufacturing and professional services also showing stronger momentum.
Bullhorn UK&I Hiring Outlook
Permanent recruitment remains selective, but improving fill rates suggest employers are still acting when live demand is real.
Lloyds Business Barometer
Overall confidence softened slightly, but internationally trading businesses remain notably more optimistic than the wider market.
Defence Investment Plan 2026
A major long-term investment programme that points to rising demand across engineering, aerospace, cyber security, manufacturing and specialist technical roles.
Defence Sector 60,000 Jobs Opportunity
Industry commentary suggests around 60,000 defence-related jobs could be created across the UK, extending beyond major contractors into wider supply chains.
AI Growth Zones
AI infrastructure and data centre development continue to create demand across construction, engineering, cyber security, cloud technology and facilities management.
Sizewell B Extension
Long-term investment in nuclear energy supports sustained future demand for engineers, maintenance specialists, operational staff and specialist contractors.
Eurostar Expansion
Transport expansion points to wider recruitment opportunities across civil engineering, construction, maintenance, electrical engineering and project delivery.
Reuters on Starting Salaries
Permanent starting salaries increased at the fastest pace for five months, suggesting organisations remain prepared to invest in quality talent.
✅ Missed the last Greenshoots Live session?
You can still catch up by clicking here to watch the recording.
✅ Want to join the next one live?
Our next Greenshoots Live session features Samantha Hurley, Managing Director at APSCo.
Next month, we’ll be sharing more practical insight from across the Talence world, including fresh thinking on AI, leadership, and what meaningful change in recruitment really looks like. We’ll also be spotlighting upcoming events, podcast conversations, and more tools and ideas designed to help recruitment leaders stay ahead with confidence.
Ready to take the next step? Explore the Talence podcast for practical insight, browse our blogs for fresh thinking on recruitment, leadership, and AI, follow us on LinkedIn for regular updates, and take our diagnostic to see where your business stands today and where the biggest opportunities may lie.
Warm regards;
Ian Knowlson
Director, Talence
