The 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 reportedly “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.”
Finally, overall demand for staff weakened further, with both permanent and temp vacancies declining markedly in December.”
Renewed fall in permanent placements
Scottish 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. Permanent staff appointments fell at a steeper rate across Scotland than that seen across the UK as a whole. December 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. Meanwhile, recruiters across the UK recorded a further fall in temp billings during December.”
Availability of permanent staff declines
Permanent 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. Royal Bank of Scotland has paved the way in banking ever since it was established in 1727. From the world’s first overdraft, and the first house purchase loan by a UK bank, to the first fully-fledged internet banking service and mobile banking app the bank has a history of making life easier for its customers.”
The bank has commitment to “retain its close connections with the Scottish communities it serves.”
The reduction in the number of workers “seeking permanent positions across Scotland contrasted with the marked upturn in permanent staff availability at the UK level. A third consecutive monthly rise in temp candidate supply was recorded across Scotland in December.”
Permanent salary inflation eases notably
Salaries 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.”
Sebastian Burnside, Chief Economist at Royal Bank of Scotland, commented:
“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.”
Market Report
This report, compiled by S&P Global, is “based on a monthly survey of around 70 recruitment and employment consultants, and provides up-to-date information on Scottish labour market trends and is seasonally adjusted.”
The information in this report is “directly comparable with the KPMG and REC, Report on Jobs survey for the UK, which uses an identical methodology.”
The KPMG and REC index for the UK has “a strong track record of accurately anticipating changes in unemployment, employment and average.”