The latest Royal Bank of Scotland Report on Jobs survey signalled a drop in recruitment activity across Scotland at the start of 2024.
Both permanent staff placements and temp billings “fell sharply in January, with the latter posting the first decline in three months.”
Subdued levels of business activity and ongoing uncertainty “around the outlook reportedly discouraged companies from taking on additional staff and made workers more hesitant to seek out new roles.”
At the same time, vacancies fell “at marked and accelerated rates.”
In terms of pay, subdued demand conditions “contributed to the softest rise in starting salaries for nearly three years.”
Meanwhile, temp wage inflation quickened, which was “linked to the rising cost of living and reports of skills shortages.”
Sustained decline in permanent placements
Scottish recruitment agencies recorded “a second consecutive monthly decline in permanent placements during January.”
The rate of contraction moderated from December but was sharp overall. Panellists linked the latest reduction to “a decrease in business activity and lingering uncertainty over the outlook.”
Permanent staff appointments also “fell at the UK level and at a stronger rate than observed in Scotland.”
January survey data pointed to “a fresh fall in temporary billings across Scotland.”
The latest reduction, which ended “a two-month sequence of growth, was the most pronounced since last August and marked overall.”
Temp billings also fell across the UK as “a whole at the start of 2024. However, the rate of decrease was only slight and notably weaker than seen for Scotland.”
Permanent staff supply drops at quicker pace
A marked deterioration in permanent candidate availability was “recorded in Scotland during January, thereby extending the current run of contraction to three years. Moreover, the rate of decrease quickened from the previous survey period to the fastest since December 2022. Anecdotal evidence noted that reduced market confidence deterred candidates from seeking new job opportunities. In contrast, an eleventh successive monthly expansion in permanent staff supply was seen at the UK level in January.”
The rate of growth did soften to “a four-month low, however. 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. As observed in each of the last four months, the availability of temporary candidates across Scotland improved in January.”
The pace of expansion eased slightly “from December but was strong overall. Temp staff supply also expanded at a softer pace across the UK as a whole, albeit one that remained sharp overall.”
Sebastian Burnside, Chief Economist at Royal Bank of Scotland, commented:
“The health of the Scottish labour market weakened at the start of the year, with recruitment agencies revealing notable declines for both permanent placements and temp billings. The subdued economic climate, high costs and uncertainty over the year ahead all contributed to muted hiring activity at businesses.”