UK contract recruitment rises despite slowdown in permanent hiring

APSCo report highlights 11% annual increase in temporary roles amid economic uncertainty

Contract recruitment in the UK recorded a notable year-on-year increase in August as businesses leaned on temporary staff to meet skills demands during an uncertain economic period, new figures reveal.

Analysis by the Association of Professional Staffing Companies (APSCo) shows that the number of contract roles added last month rose 11 per cent compared with August 2024, with placements up four per cent year-on-year. 

Month-on-month activity, however, fell 11 per cent between July and August 2025, according to its latest Hiring Trends report.

APSCo said the annual uptick reflects a shift among employers towards flexible staffing solutions rather than permanent headcount growth.

Permanent hiring showed sharper declines. Advertised permanent roles fell 21 per cent between July and August, while placements dropped 11 per cent – a fall attributed to the typical summer slowdown.

Samantha Hurley, Managing Director at APSCo UK, said: “The month-on-month dip in hiring is to be expected during the summer period, but the year-on-year figures provide a more accurate reflection of market sentiment. 

“Permanent recruitment remains subdued, which is unsurprising given the current economic climate, the upcoming Autumn Budget, and anticipated changes under the Employment Rights Bill.

“However, the rise in contract recruitment is a positive signal. It shows that demand for high-level skills persists, despite employers remaining cautious about long-term employment commitments.

“As more organisations explore efficiencies through AI and digital transformation, we expect to see continued reliance on project-based contracts to meet short-term needs.”

She added: “The coming months will be critical for the recruitment sector, but for now, the uptick in contract demand offers a degree of reassurance for staffing professionals.”

Andy Ingham, SVP Sales for EMEA & APAC at Bullhorn, the recruitment technology provider that produced the results, said the findings point to underlying stability in the market despite seasonal fluctuations.

He said: “August naturally brought a seasonal slowdown, which is typical for this time of year. While we saw a temporary dip in permanent jobs and CV sends, it’s encouraging to note that our conversion rates remained strong. 

“The contract market, in particular, showed resilience, with placements up 4% year-over-year. This performance, boosted by a strong July, shows we are continuing to make solid progress over last year.”

READ MORE: Don’t be haunted by your recruitment process. Luke Shipley of Zinc explains how automation can help HR teams avoid ghosting and improve candidate experience.

Main image, courtesy Ketut Subiyanto/Pexels