British companies halt recruitment amid Iran conflict impact, REC research indicates.

The UK's employment landscape slowed significantly in May as businesses delayed making long-term job offers due to rising costs and economic instability stemming from the Iran conflict, according to a recent sector report released on Monday.

Data from KPMG's monthly Report on Jobs reveals that permanent job placements declined at their quickest rate since July 2025. This downturn marks the 44th consecutive month of decline, a record stretch dating back to the survey's inception in 1997.

Businesses are becoming increasingly hesitant due to ongoing global and domestic uncertainty, leading them to reassess their recruitment strategies. Some companies are opting for temporary contracts as a means of maintaining flexibility, but many others are postponing or cancelling permanent hiring plans altogether.

KPMG and REC report jointly.

May saw a significant decline in permanent staff placements, dipping to 44.1. This marked a considerable drop from the previous month's figure of 47.5.

Temporary workforce growth accelerated significantly in recent months, driven by a surge in hiring of short-term staff, with the index now standing at 52.2 after increasing from 50.4. This expansion marks the fastest pace since April 2023, as companies sought flexibility amid uncertainty surrounding the Iran conflict.

Candidate supply surged more rapidly in May compared to the preceding month of April.

Permanent job openings plummeted, marking the steepest decline since February, according to recent data from REC.

Research findings were derived from approximately 400 UK-based recruitment agencies that participated in the study between May 12th and May 22nd.