Why UK Employers are Turning to Temporary Staff as Hiring Confidence Falls

The UK jobs market seems to be struggling. According to the Office for National Statistics, UK vacancies fell to 707,000 in March to May 2026, the lowest level since February to April 2021. However, businesses still need people. What has changed is the appetite for commitment. In a softer economy, with higher costs and uncertain demand, many employers are asking a different question before they hire: do we need a permanent employee, or do we need flexible capacity?

The latest KPMG and REC UK Report on Jobs reported that temporary billings increased at the fastest rate in more than three years, while permanent placements fell again in May. Employers were not necessarily abandoning growth. In many cases, they were delaying permanent decisions and using temporary workers to keep operations moving.

Temporary Staff Are Becoming a Confidence Hedge

Temporary hiring often rises when businesses need room to manoeuvre.

A company may have a new project but limited visibility over demand six months from now. A retailer may need cover for a short-term trading period but feel nervous about taking on extra permanent cost. A professional services firm may have client work in the pipeline but hesitate to expand its permanent team until contracts are secured.

In those situations, temporary staff can act as a pressure valve. They allow employers to add capacity without making the same long-term commitment attached to permanent headcount.

When confidence is fragile, flexibility becomes valuable in itself.

Flexible Hiring Still Needs Structure

Temporary workers can make a business more adaptable, but they do not remove the need for structure. In fact, they often make structure more important.

A permanent employee usually settles into a familiar routine: fixed hours, known responsibilities, regular reporting lines and established payroll processes. Temporary workers can be different. They may join for a short project, support a busy period, cover absence or move between teams depending on demand.

That flexibility is useful, but it creates questions that businesses still need to answer clearly. Who approved the work? How many hours were completed? Which project or department should carry the cost? Were expenses involved? Is the work billable to a client? Has the data been checked before payroll or invoicing?

If those answers live across spreadsheets, email threads and manager messages, the flexibility can quickly become messy.

This is why many employers are looking again at time and expense tracking software to manage temporary, contract, and project-based workers internally. The goal is not only to bring people in faster, but also to maintain control once they are in the business.

Temporary Workers Can Change the Cost Picture Quickly

One of the attractions of temporary staffing is that it can help businesses avoid permanent cost before they are ready. But that does not mean temporary labour is automatically easy to control.

Temporary workers still create real costs. They may work across multiple projects, support different departments, claim expenses or contribute to client work that needs to be billed accurately. Without clear tracking, a business may know it has brought in extra capacity, but not whether that capacity is being used profitably.

Temporary capacity only works commercially if the business can see where time is going, what it costs and how it connects to project delivery.

The Approval Process Is Where Flexibility Often Breaks Down

Employers need to treat temporary labour as part of a wider operational workflow, not as a quick fix that sits outside normal controls.

Good processes help answer practical questions before they become problems. Is the temporary worker assigned to the correct project? Are hours being approved by the right person? Are overtime or different rates being applied correctly? Can finance trust the data without rekeying it manually?

The more a business relies on flexible staffing, the more important those questions become.

Expenses Should Not Become a Side Process

Temporary and project-based workers can also create expense complexity.

Travel, mileage, subsistence, equipment, client visits and project-related purchases can all appear alongside labour costs. If expenses are handled separately from time records, businesses can lose a clear view of the full cost of delivery.

That becomes a problem when margins are tight.

Keeping expenses connected to the same approval and reporting process helps employers understand the real cost of flexible work. It also reduces the admin burden on finance teams, who otherwise have to reconcile claims, receipts and project codes after the event.