Based on the KPMG and REC UK Report on Jobs (collected 12–22 May 2026)
While the UK’s jobs market continued to cool in May, Lancashire employers have reason to be cautiously optimistic. The latest KPMG and REC UK Report on Jobs shows that the North of England was the only English region to record growth in permanent hiring, bucking a national trend of falling recruitment activity.
For businesses across Lancashire, from Preston and Blackburn to Burnley, Lancaster and Blackpool, the message is clear: although economic uncertainty is affecting hiring decisions nationally, the North continues to demonstrate resilience.
The UK Picture: Caution Takes Hold
Across the UK, employers became more hesitant to make long-term hiring commitments in May. Ongoing geopolitical uncertainty, including the war in Iran, alongside continuing political turbulence in the UK, weighed on business confidence.
As a result:
- Permanent placements fell at their fastest rate for ten months.
- Employers increasingly relied on temporary workers rather than committing to permanent hires.
- Temporary billings rose at their strongest rate in more than three years.
- Overall vacancies continued to decline, particularly for permanent roles.
- Candidate availability increased significantly as redundancies and reduced hiring activity pushed more people into the labour market.
- Salary growth remained modest, with both permanent starting salaries and temporary pay rates growing more slowly than in April.
Lancashire and the North: An Exception to the Rule
Against this backdrop, the North of England was the standout performer.
While employers in London, the Midlands and the South of England all reduced permanent hiring activity, the North recorded a small but significant increase in permanent placements, making it the only English region to achieve growth.
At the same time, temporary recruitment also increased across the region.
This means that employers across Lancashire are benefiting from something relatively rare in today’s labour market:
✅ Growth in permanent hiring
✅ Growth in temporary hiring
✅ A larger pool of available candidates
For Lancashire businesses looking to attract talent, these conditions present opportunities that many organisations elsewhere in the country are not currently experiencing.
What Does This Mean for Lancashire Employers?
- Access to More Talent
With candidate availability rising nationally, Lancashire employers have access to a broader talent pool than they have seen in recent years. Professionals who may previously have been difficult to attract could now be more open to opportunities closer to home.
This is particularly relevant for organisations looking to strengthen teams in business services, manufacturing, engineering, professional services and digital roles.
- Flexibility Remains Key
Many businesses continue to favour temporary and contract staffing while economic conditions remain uncertain.
For Lancashire employers planning growth but wanting to manage risk, temporary-to-permanent recruitment models may offer the right balance between flexibility and long-term workforce development.
- Pay Pressures Are Easing
The report suggests wage inflation is beginning to moderate, helped by the increased supply of candidates.
This should not be interpreted as a signal to reduce salary competitiveness, particularly for specialist positions. However, employers may find recruitment budgets stretch further than they did during the post-pandemic hiring surge.
- Lancashire’s Relative Resilience Creates Opportunity
The North’s ability to maintain permanent hiring growth when other regions are retrenching suggests continued confidence among many northern businesses.
Lancashire’s diverse economy—including advanced manufacturing, aerospace, logistics, public sector employment, health and social care, and growing digital and technology clusters—may be helping to support demand despite wider uncertainty.
What About Technology and IT?
The report did not identify IT & Computing as either a top-performing or worst-performing sector in May.
That suggests the technology market is currently tracking broader economic conditions rather than moving sharply in either direction.
For Lancashire employers with technology hiring requirements, this means:
- Competition for talent may be less intense than in previous years.
- Candidate availability may be improving.
- Specialist digital and technical skills remain valuable and may still command competitive salaries.
- Workforce planning should continue to monitor market conditions closely, as previous reports have highlighted weakness in tech vacancies.
Looking Ahead
For Lancashire businesses, May’s data offers a more positive story than the national headlines might suggest. While uncertainty is clearly affecting hiring confidence across the UK, the North of England continues to show resilience, with growth in both permanent and temporary recruitment activity.
The key takeaway is that Lancashire employers should remain agile rather than retreat. The combination of increased candidate availability, moderating pay pressures and ongoing regional hiring growth creates a valuable opportunity to strengthen workforces while competitors elsewhere remain cautious.
As always, one month’s data does not establish a long-term trend. However, if the North continues to outperform in the coming months, Lancashire could find itself well placed to attract talent and investment while other regions navigate a more challenging recruitment landscape.
Source: KPMG and REC, UK Report on Jobs, May 2026 (data collected 12–22 May 2026), compiled by S&P Global.
