Is the UK Recruitment Market Finally Turning a Corner?

After a difficult few years for recruitment agencies, there are finally some encouraging signs.

But if we’re seeing a return to the levels we were at in the immediate aftermath of the pandemic (ie, around 2021), Agency owners need to avoid the mistakes they made before.

Back then, the answer was to hire anyone relevant, often at an inflated salary that didn’t match their capabilities or experience.

And then came the end of 2022.

Companies put hiring on hold, and a cost-of-living crisis started creeping in. And this set of a multitude of incidents within the industry.

If you ask anyone who’s worked in recruitment for at least the last 6 years, I don’t think many people would describe it as particularly easy.

• We’ve seen agencies close.
• We’ve seen restructures.
• We’ve seen redundancies.

We’ve seen experienced recruiters suddenly find that business development isn’t quite as straightforward as it was during the post-Covid boom.

• Clients have been cautious about hiring.
• Candidates have been cautious about moving.
• Costs have increased.

And recruitment businesses themselves have understandably become far more cautious about adding headcount.

But are we finally starting to see some light at the end of the tunnel?

From my own personal view, yes.

There are reasons to be optimistic

The latest KPMG and REC UK Report on Jobs certainly makes for more encouraging reading.

• Permanent placements stabilised in July following a prolonged period of decline.
• Temporary billings continued to increase, with growth remaining among the strongest we’ve seen since early 2023.
• Temporary vacancies also increased for the first time in two years.
• And starting pay increased for both permanent and temporary workers.

Nobody should be cracking open the champagne just yet, as one good month doesn’t suddenly mean recruitment is booming again.

But compare where we are now with the end of 2025, when permanent placements had been falling for 39 consecutive months, and the direction of travel certainly feels more positive.

And perhaps more importantly, I’m noticing a change in the conversations I’m having with recruitment businesses.

They’re starting to talk about growth again. Admittedly, contract recruitment seems to be the main order by many, but I am being approached by more and more companies looking to add to their numbers.

The conversations are changing

For a long time, conversations across the agency market were cautious at best

• How do we reduce costs?
• Do we really need to replace that person?
• Can we do more with the team we’ve already got?
• Should we hold off hiring until the market improves?

This caused a skeleton staff and reduced tech stack for many businesses for years, as everyone seemed to tighten the purse strings to weather the storm.

Now, increasingly, I’m hearing different questions.

• Where can we grow?
• Which market should we invest in?
• Should we build a contract desk?
• Can we bring in another experienced biller?
• Who could lead this team?
• Could we hire someone capable of opening a completely new market for us?

That’s a significant change, and one that is a step in the right direction.

But it also creates another challenge.

Because after surviving one of the toughest periods recruitment has experienced for some time, the last thing an agency needs is to waste money on the wrong hire.

A bad recruitment hire has always been expensive

Recruitment agencies sometimes look at the cost of a hire purely in terms of salary.

But we all know it goes much further than that.

There’s:

• Basic salary
• Potential guarantees
• LinkedIn licences
• CRM costs
• Job boards
• Training
• Management time
• Marketing support
• The opportunities you give them
• The clients you introduce them to

And perhaps most importantly, the time you’ve lost if six months later you’re sitting in the same position you were before they joined.

That can easily turn a seemingly inexpensive hire into a very expensive mistake.

And in a market where margins and costs have been under pressure, agencies can’t afford too many of those.

Growth doesn’t mean hiring everyone again

If confidence continues to improve, I hope recruitment businesses remember some of the lessons of the last few years.

Because we’ve seen what happens when the market gets hot.

Headcount becomes the goal.

• “We’re going from 30 to 60 people!”
• “We’re opening three new offices!”
• “We’re hiring 20 recruiters this year!”

Growth becomes measured by how many desks you can fit into an office rather than how profitable those desks actually are.

My advice? Slow down! I feel the future of hiring in agencies is going to look very different.

This can be evidenced by some chats I’ve had recently where I’ve advised companies to grow slowly and avoid the temptation to bring on multiple new hires.

I feel it’s going to look a little like this:

• Smaller teams.
• Better technology.
• Greater use of AI and automation.
• Higher expectations around individual performance.
• More specialist recruiters.
• More emphasis on business development.
• And significantly more scrutiny around who actually gets hired.

I’ve advised companies to grow slowly and avoid the temptation to bring on multiple new hires.

Grow deliberately, not quickly!

This is also where Rec2Rec needs to do better

I’ll happily say this as someone who has spent nearly a decade working in Rec2Rec.

Our industry has to earn its fees too.

If an agency tells me they’re looking for a recruiter, my job isn’t simply to search LinkedIn for people with “Recruitment Consultant” in their job title and send across ten CVs.

I need to understand WHY they’re hiring.

• What does success look like?
• What does the existing team bill on average?
• What’s the culture-fit like?
• Why have previous hires failed?
• Is there clear progression?
• How good is the commission structure?
• What are the expectations around BD?
• What markets are performing?
• Where does the business want to be in two years?

Only then can you properly understand who they should be hiring. And more importantly, if hiring right now is the best option!

Sometimes the best thing a Rec2Rec can do is tell a client that the candidate they’re excited about probably isn’t right for them.

That conversation might cost you a fee today, but it can also win you a client for the next five years.

The best recruiters aren’t always looking

There’s another reason I think agencies need to think differently about hiring as confidence returns.

Some of the best recruiters in the market aren’t applying for jobs.

• They’re billing.
• They’re managing teams.
• They’re building desks.
• They’re earning good money.
• And they’re probably reasonably happy where they are.

That doesn’t mean they’ll never move. It means you need to give them a compelling reason to have a conversation.

That’s particularly important when you’re hiring someone to build something.

• A Head of Contract Recruitment.
• A new Practice Lead.
• A £300k+ biller.
• Someone to open a new vertical.
• A future Director.

These are the profiles that will take a lot longer (and a more thorough search) to find.

They need identifying, approaching, and importantly, understanding.

That’s where good search becomes considerably more valuable than simply advertising another vacancy.

Maybe recruitment is becoming recruitment again

• AI will continue to change our industry.
• Automation will continue to remove administrative work.
• Recruitment businesses will become leaner.
• Some traditional recruitment tasks will probably disappear altogether.

But I don’t think that makes good recruiters less valuable. Quite the opposite, in fact.

Because when everyone has access to similar technology, the differentiator becomes the person using it.

• Can they win business?
• Can they build relationships?
• Can they understand a client’s problem?
• Can they find people others can’t?
• Can they negotiate?
• Can they advise?
• Can they turn a cold conversation into a client relationship that lasts five years?

That’s recruitment!

And if the UK recruitment market genuinely is beginning to turn a corner, the businesses that benefit most won’t necessarily be those that hire the most people.

They’ll be the ones that hire the right people.

That’s where I come in.

I work with recruitment businesses looking to make exactly those hires — from strong 360 consultants and established billers through to team leaders, managers and senior leadership appointments.

Not by throwing CVs at a vacancy. By understanding what you’re trying to build first.

So if you’re sitting there thinking:

“The market feels like it’s improving. Maybe it’s finally time we made that hire.”

I’d be very happy to have that conversation.

Because after the last few years, I’m hoping the next chapter of UK recruitment is going to be considerably more enjoyable than the last one.

Thanks for reading!

Originally published on LinkedIn