Talent Trends Report | October 2026
UK hiring market update, October 2026: the rebalance is underway
Last month we reported the first growth in UK permanent hiring for four years, and said the next data point would tell us whether it would stick. September's data answered. Permanent placements rose again, faster, and for the first time in over two years demand for permanent staff grew across the private sector. Our October Talent Trends Report explains what's shifting underneath the headlines, and how to make sure the rebalance now underway happens on your terms rather than by default.
September 2026 in six numbers
Fresh from the KPMG/REC UK Report on Jobs and the ONS Labour Market Overview:
50.9 - UK permanent placements grew for a second month running, taking the index to a four-year high
52.9 - Private sector demand for permanent staff grew for the first time in over two years
50.9 - Temp billings rose for a sixth straight month, but at the softest pace of the run, as employers shift budget towards permanent hires
48.5 - Vacancies fell at their softest rate in over two years; the long decline has slowed to a crawl
53.4 - Starting salary growth cooled for the first time in four months, creating room to make offers
57.2 - Candidate availability rose at its slowest pace in three years. The pool is starting to drain, and in London it barely grew
And other official data backs it up: ONS vacancies fell by just 8,000 on the quarter to 702,000, unemployment held broadly stable at 4.9%, private sector pay growth slowed to 3.2% (the slowest since late 2020), and REC JobsOutlook shows employer confidence in hiring and investment improved six points over the summer.
The market is rebalancing - the question is who decides
Underneath the headline, the weight of the market is moving in three directions at once: from temp towards perm, from a London-led recovery towards a national one, and from a deep candidate pool towards a draining one. None of these shifts is finished, which means you still get a say in how they land on your business.
That's the real question for every people and talent leader this quarter: will the rebalance happen by design or by default? By design looks like choosing your mix of permanent and flexible talent deliberately, benchmarking roles before the market reprices them, and fixing slow approval chains while nobody is queuing. By default looks like converting temp spend into fixed cost one panic hire at a time, then discovering in spring that the benchmarks and the shortlists have moved. The October report is about making it the first one, while the groundwork is still cheap.
What is inside the October report
What changed in 30 days - six measures with August and September side by side, because one good month can be luck and two is a pattern you can plan around
The backdrop - what the ONS data says the recovery is standing on
The rebalance - the three shifts underneath the headlines, and the risk in each
What's your next move? - a decision tree that takes four honest questions and shows which talent model fits where you actually are
Three trades the market is offering - the groundwork that costs serious money in a busy market is briefly cheap
Planning through the Budget - how to bank the upside of a good Budget without carrying the cost of a bad one
Who the report is for
HR directors, heads of talent and business leaders deciding how much permanent and how much flexible hiring capability to carry into 2027 - particularly in insurance, financial services and other regulated sectors - and who want that decision made deliberately, before the market makes it for them.
Complimentary 30-minute hiring mix review
A short working session with people who do this every day, covering your talent mix versus the market's direction, your route through the report's decision tree, the roles worth benchmarking before spring, and what deliberate rebalancing looks like for you. No commitment. Get in touch.
Or contact:
01892 553360 | info@VermeloRPO.com
FAQs
Is the UK hiring market recovering in October 2026?
The September 2026 KPMG/REC data recorded a second consecutive rise in permanent placements (50.9, a four-year high for the index) and the first growth in private sector permanent demand in over two years, with ONS vacancies broadly stable. The recovery is early, but four separate measures now point the same way.
Should we convert temporary roles into permanent hires?
September's data shows some employers already are: temp billings grew at their softest pace in six months as budgets shift towards permanent. The October report's decision tree works through whether, where and in what order that conversion makes sense, rather than doing it one panic hire at a time.
What is the difference between RPO and Embedded Talent?
RPO (Recruitment Process Outsourcing) hands the whole hiring engine - sourcing, process, technology, employer brand and delivery - to a specialist partner. Embedded Talent (Recruiter-as-a-Service) places experienced recruiters inside your team, working under your brand, scaling up and down with demand.
Vermelo is a UK talent solutions specialist delivering RPO, Project RPO, MSP, embedded talent (RaaS), total talent and talent advisory & consultancy. Named Best Recruitment Process Outsourcing (RPO) Business at the Global Recruiter Awards 2025. Part of the GWV Talent Solutions Group which includes Gerrard White Consulting and FlarePeople.