South West hiring trends: What recruitment leaders should know from the latest UK jobs data

South West hiring trends: the recruitment market may be turning a corner

The latest KPMG and REC UK Report on Jobs suggests the UK recruitment market may be approaching a turning point after more than two years of slowing hiring activity.

While the labour market remains subdued, the pace of decline in permanent placements has slowed significantly, signalling that the worst of the hiring slowdown may now be behind us.

For employers and recruitment leaders across the South West and wider South of England, the data paints a picture of cautious optimism.

The UK picture: hiring stabilising after a prolonged slowdown

Across the UK, permanent placements continued to fall in February, but only marginally and at the slowest rate since March 2023.

Demand for staff also declined at the softest pace in nine months, suggesting that employer confidence may gradually be improving.

However, vacancies have now been falling for more than two years across the UK labour market, reflecting ongoing economic uncertainty and higher employment costs.

In practice, this means many employers are still taking a cautious approach to hiring, even as signs of stabilisation begin to emerge.

Regional contrast: where hiring is recovering fastest

The report highlights significant regional differences in hiring conditions.

North of England

• The only region to record growth in permanent placements
• Strongest increase in candidate availability

Midlands

• Strongest salary growth
• Only region seeing growth in temporary billings

London

• Mixed hiring conditions
• Faster wage growth for temporary staff

South of England (including the South West)

• Fastest decline in permanent placements
• Weakest growth in starting salaries

For employers and recruiters in the South West, this means the region is currently lagging the recovery seen in parts of the Midlands and North.

Vacancies are still falling – but the pace is slowing

The number of job vacancies continues to decline across the UK, although the pace of reduction has eased.

This typically signals the early stages of a labour market shift.

Historically, recruitment cycles tend to move through three phases:

• Vacancy declines slow
• Hiring stabilises
• Recruitment growth resumes

The latest data suggests the UK labour market is currently in the first phase of that cycle.

Candidate availability is rising

Another major shift in the labour market is the rapid increase in candidate availability.

The supply of candidates has been rising across the UK as redundancies and slower hiring activity bring more professionals into the job market.

For employers, this means:

• larger talent pools
• less pressure on salaries
• more choice in recruitment processes.

For recruitment consultancies, it highlights the importance of strong candidate engagement and effective talent pipelines.

Sector demand: engineering and technology remain resilient

Despite the broader slowdown in hiring, several sectors continue to demonstrate strong demand for talent.

Engineering was the only sector to record improving demand for permanent staff in February.

Skills shortages also remain evident across areas including:

• engineering and technical roles
• software development and cyber security
• data engineering and digital infrastructure
• energy and renewables
• professional services.

For employers across the South West’s growing innovation economy, this reinforces the continued importance of strategic workforce planning and specialist recruitment expertise.

Pay pressures easing across the UK

Salary growth has begun to moderate across the labour market.

Starting salaries for permanent roles increased again in February but at the slowest rate for several months, reflecting the rise in candidate supply and cautious employer sentiment.

The South of England recorded the weakest pay growth of all English regions, which may create opportunities for employers seeking to attract talent in a more competitive market.

What this means for South West employers

While hiring conditions remain challenging, the data suggests that the labour market may be moving towards greater stability.

For businesses across the South West, this creates an opportunity to:

• secure skilled professionals in a less competitive hiring environment
• strengthen leadership teams ahead of future growth
• invest in specialist roles that support innovation and productivity.

At Cathedral Appointments, we continue to work closely with employers across the region to support strategic recruitment in sectors including professional services, finance, technology and engineering.

As the labour market evolves through 2026, organisations that take a proactive and strategic approach to talent will be best positioned to grow.