latest Royal Bank of Scotland Report on Jobs survey signalled a fresh decline
in permanent staff appointments across Scotland during December.
The pace of
reduction was the strongest since April, as growing economic uncertainty
weighed on hiring decisions and discouraged workers from seeking new roles.
However, temp billings rose further in December, highlighting a preference for
temporary staff amongst employers.
Candidate shortages meanwhile continued to
push up starting salaries, though the rate of inflation eased notably from
November. Temp wage growth also softened at the end of the year.
overall demand for staff weakened further, with both permanent and temp
vacancies declining markedly in December.
Renewed fall in permanent placements
recruitment firms recorded a fresh fall in permanent staff appointments during
December, with declines now noted in four of the last five survey periods. The
rate of decrease was the most pronounced since April and sharp. The reduction
was linked by recruiters to heightened levels of economic uncertainty, which
dampened employers’ and workers’ intentions to hire or seek out new roles.
staff appointments fell at a steeper rate across Scotland than that seen across
the UK as a whole.
data pointed to a second consecutive monthly rise in billings received from the
employment of temporary staff across Scotland. The rate of expansion, though
mild, quickened from November. The latest rise was reportedly supported by
increased demand for contract workers.
recruiters across the UK recorded a further fall in temp billings during
Availability of permanent staff declines
staff availability across Scotland fell in December, thereby stretching the
current period of decrease to 35 months. The pace of decline remained sharp
despite easing to a three-month low. According to recruiters, fewer workers
were willing to risk a job move in the current economic climate.
reduction in the number of workers seeking permanent positions across Scotland
contrasted with the marked upturn in permanent staff availability at the UK
third consecutive monthly rise in temp candidate supply was recorded across
Scotland in December. The respective seasonally adjusted index ticked up
further from September to signal a sharp rise in temp staff supply overall.
Recruiters often attributed the upturn to redundancies and the non-renewal of
However, growth of temp
staff supply across the UK as a whole continued to outpace that seen in
Permanent salary inflation eases notably
awarded to newly-placed permanent staff increased sharply across Scotland in
December. The rise in salaries was said to have been primarily driven by
candidate shortages. However, the rate of inflation moderated to a seven-month
low and was weaker than both the historical and UK-wide averages.
data signalled a further rise in temporary wages across Scotland at the end of
2023. While the pace of increase eased for the second month running, it
remained sharp overall and broadly in line with the long-run average. The
latest upturn in temp pay was largely linked to the growing cost of living.
the rate of temp wage growth quickened across the UK as a whole, it remained
weaker than that observed in Scotland.
Steeper drop in permanent vacancies
recruiters registered a marked fall in permanent vacancies during December.
Moreover, the rate of contraction was the strongest since November 2020. Demand
for permanent staff also weakened at the UK level, but only marginally.
the eight monitored sectors, Blue Collar and Engineering & Construction
recorded the joint-fastest falls in permanent vacancies. Meanwhile,
Nursing/Medical/Care defied the broader trend by reporting an upturn in
permanent staff demand.
has been the case since August, Scottish recruiters noted a fall in temp
vacancies in December. Moreover, the rate of contraction was the most marked in
three-and-a-half years. Meanwhile, demand for temp staff across the UK as a
whole rose slightly.
& Construction noted the quickest decline in short-term vacancies, followed
by Executive & Professional.
Sebastian Burnside, Chief
Economist at Royal Bank of Scotland, commented: "The Report on Jobs survey
highlights that 2023 has generally been a weak year for the Scottish labour
market, with permanent staff appointments rising in only three months of the
year. Moreover, December recorded the most marked decline in permanent placements
since April and one that was sharp overall, as employers were hesitant to
commit to new hires amid lingering economic uncertainty – a theme also observed
at the UK level. In contrast, temp billings continued to increase at the end of
the year as businesses opted for more flexible employment arrangements.
"The subdued economic
environment and signs of further declines in vacancies suggest that hiring
activity will remain weak as we head into 2024. However, softening demand
conditions have led to slower rates of pay growth, especially for permanent
starters’ salaries, helping to ease the pressure on employer’s budgets."