The May Report on Jobs from KPMG and the REC made for uncomfortable reading. Permanent placements fell at their quickest rate in ten months, while temporary billings rose faster than at any point in over three years. The report is blunt about the reason: political turbulence at home and the crisis in the Gulf have made employers nervous, and nervous employers stop signing permanent contracts. With a Prime Minister gone, a leadership contest under way, and a fortnight of alarming headlines out of Iran, you can hardly blame a board for keeping its options open and hiring by the month instead.
I have written about this before. A few weeks ago I made the case that the interim market is where senior hiring has gone this year. What I want to do today is look further ahead, because there is a more interesting question buried in these numbers. Is this a detour, or is it where the market is actually heading? Firms always tell themselves that the flexible stuff is temporary, a way to keep things moving until confidence returns. The historical record suggests they tend to be wrong about that, and it is worth understanding why.
We have been here before
Cast your mind back to 2008. Credit dried up, demand fell away, and employers responded much as they are responding now, by freezing permanent recruitment and leaning on contractors, interims, and the self-employed to get the work done. The assumption across most boardrooms was that this would be a phase. Once growth came back, the permanent payroll would be rebuilt and the freelancers would drift back to the margins where they had always sat.
What actually happened next
That rebuilding never really came. The Office for National Statistics records the self-employed workforce climbing from 3.3 million, around 12 per cent of the labour force, in 2001 to 4.8 million, just over 15 per cent, by 2017, and most of that acceleration happened after the crash rather than before it. The ONS found that employee jobs fell during and after the downturn while self-employment carried on growing, accounting for the largest share of total employment growth right through to the end of 2014. Look at the people working on their own account, with no staff beneath them, and the shift is starker still: that group went from 2.4 million in 2001 to 4.0 million by 2016. What had looked like a way of surviving a recession quietly hardened into the way a large part of the country now works.
For senior people this matters more than it might first appear, because the post-crisis self-employed were not, in the main, couriers and odd-jobbers. The same ONS work shows the growth was led by graduates, whose share of the self-employed rose from 19 per cent in 2001 to 33 per cent by 2016. These were experienced, qualified professionals building portfolio careers on their own terms, and a good number of them never returned to a single employer. A recession had pushed them out, and a fair few discovered they preferred the view from the other side of the fence.
How far the 2008 comparison holds
Up to a point, the same thing is happening again. When employers grow uncertain they pull back on permanent commitments and cover the work with flexible labour instead, and that is broadly what the latest figures show. The ONS has vacancies down to 707,000 in the three months to May, the lowest figure since early 2021 and more than 10 per cent below where they sat before the pandemic, with professional, scientific, and technical roles taking the heaviest hit. There are now 2.5 unemployed people chasing every vacancy, against 2.2 a year ago. Plenty of senior candidates, cautious boards, and a flexible market doing the heavy lifting. The parallel with 2008 is hard to miss.
It is the differences that I would weigh carefully, because there are two of them and they pull in opposite directions. The first concerns the cause. 2008 was a credit and demand shock that took years to work out of the system. What we have now is political and geopolitical, the sort of uncertainty that can clear in a quarter or two once a government settles and a foreign crisis cools, in which case permanent hiring may well thaw faster than it did last time. The second difference cuts the other way. Two forces are at work in 2026 that simply were not present in 2008. AI is flattening management layers and turning what used to be standing senior roles into time-limited projects. And permanent employment now carries a heavier compliance burden, with the REC’s own chief executive pointing to new employment rules as one reason firms are reaching for temporary labour. Both of those keep pushing toward more fractional and interim working whatever happens to confidence.
My forecast, and the assumptions which underpin it
So here is my best read of it. If the leadership contest is settled cleanly and the Gulf situation calms over the next couple of quarters, I would expect permanent senior hiring to recover some ground through 2027, while the interim and fractional share of senior appointments settles at a level clearly above where it sat before this year and does not fall all the way back. That is my central case. If instead the political fog lingers or the geopolitical picture darkens, the shift speeds up, and flexible work becomes the ordinary way into a senior role for a sizeable part of the market well into 2028.
I would rather set out what would prove me wrong than pretend to a certainty I do not have. A sharp recovery in confidence would pull permanent hiring back faster than the 2008 comparison implies. A reversal of the new employment rules would take away one of the two accelerants. And if AI adoption stalls at the management layer, the other one goes with it. Those are the three things I would watch. Without them, I think the direction of travel is reasonably clear.
What should you actually do about it? Stop treating interim and portfolio work as a waiting room between proper jobs. If the market is moving this way, build for it deliberately. That means a CV written around outcomes and engagements rather than years of service, which is a different document from the one most directors are carrying, and the sort of thing our executive career transition work is built to handle. It means a profile that reads as a credible operator in your own right, and the governance and commercial literacy to advise a board or take a seat on one. And if you would rather not read a shifting market on your own, a career advisory retainer that keeps your positioning current earns its keep more obviously now than it did when permanent roles were plentiful. The people who got ahead of this after 2008 did not wait for an all-clear, which in the event took years to arrive.
Frequently asked questions
Is the current rise in temporary and interim hiring just a blip?
It may well not be. The KPMG and REC Report on Jobs recorded the fastest growth in temporary billings for over three years in May, prompted by political and geopolitical uncertainty. The lesson of 2008 is that when employers reach for flexible labour under stress, a good share of that change tends to stay put once conditions improve.
Will permanent executive roles disappear?
No. My central case is a structurally higher share of interim, fractional, and portfolio appointments at senior level, sitting alongside permanent roles that recover only part of the ground they have lost. Permanent executive seats are not going anywhere; they simply stop being the only serious option for an ambitious career.
Should I accept an interim role if I would prefer a permanent one?
With 2.5 unemployed people per vacancy and permanent senior hiring on hold, an interim engagement keeps you current, visible, and earning, and it often converts to something permanent in time. Approached as a deliberate strategy, it is frequently the stronger move while permanent hiring is frozen.
How is 2026 different from 2008 for senior careers?
The trigger this time is political and geopolitical rather than a credit shock, so the freeze could lift sooner. Working against that, two forces absent in 2008, namely AI-driven flattening and a heavier compliance load on permanent employment, both push toward more flexible senior hiring than the last cycle produced.
I should be clear that I am not arguing flexible working is good or bad. My point is narrower. Boards reach for it under pressure, hold on to it once the pressure passes, and the labour market quietly reshapes itself around the habit. We have watched that happen once already. We are watching it begin again now, with two accelerants the last cycle never had. The executives who come through this well will be the ones who stop waiting for the old market to come back, and make themselves straightforward to hire in whatever shape the new one takes.
