Permanent staff appointments have declined in Scotland, report says

Scottish recruitment firms recorded a fresh fall in the number of permanent staff appointments across Scotland during December, according to a survey.

The latest Royal Bank of Scotland Report On Jobs found the pace of reduction in roles was the strongest since April last year.

The decline was linked by recruiters to growing economic uncertainty impacting on hiring decisions and discouraging workers from seeking new roles.

Permanent staff appointments also fell at a steeper rate across Scotland than seen across the UK as a whole.

Temporary staff billings did rise in December – an increase which recruiters said indicated a preference among employers for non-permanent staff.

Elsewhere candidate shortages continued to drive up starting salaries despite the rate of inflation easing from November to a seven-month low.

Pay for temporary staff also went up towards the end of the year, which recruitment firms linked to the continuing cost-of-living crisis.

The survey found the number of permanent vacancies dropped too, with roles in engineering and construction being among the worst affected.

Recruiters did note a rise in demand for nursing and medical care staff, bucking the broader trend.

Sebastian Burnside, chief economist at Royal Bank of Scotland, said: “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 employers’ budgets.”