Accelerated fall in permanent placements…

Accelerated fall in permanent placements…

The Royal Bank of Scotland Report on Jobs is compiled by S&P Global from responses to questionnaires sent to a panel of around 100 Scottish recruitment and employment consultancies. The report’s February figures show an accelerated decline in permanent placements.

Permanent placements fell at the quickest pace in 15 months
Demand weakness was highlighted by marked falls in both permanent and temporary vacancies during February. However, pay pressures persisted amid competition for suitably-skilled workers.

Sebastian Burnside, Chief Economist at Royal Bank of Scotland, commented:
“The latest recruitment survey continues to highlight reduced hiring activity across
Scotland amid a backdrop of lingering economic uncertainty… At the same time, candidates were cautious to seek new opportunities, instead favouring security in their current roles or pausing their job search. With
vacancies continuing to fall, this suggests that we could see a further deterioration in hiring conditions across Scotland in the months to come. However, starting pay for both permanent new joiners and temp workers continued to increase at marked rates, suggesting that while overall hiring activity is down, for the right skillset employers are willing to raise their offers.”

Rapid reduction in permanent placements
February data revealed a third consecutive monthly fall in permanent staff appointments across Scotland. The rate of contraction quickened from January to the sharpest in 15 months. Permanent staff hires also fell across the UK as a whole. The rate of contraction was broadly unchanged from the previous survey period and sharp, albeit softer than that recorded for Scotland.

Downturn in temp billings moderates
Scottish recruiters recorded a drop in billings received from temporary workers during February. Meanwhile, temp billings at the UK level declined at an accelerated rate that exceeded that seen for Scotland.

Sustained fall in permanent staff supply
Latest data showed a fall in permanent staff availability across Scotland, thereby extending the current run of decrease which began in February 2021. The pace of deterioration was only slightly weaker
than January’s 13-month record and rapid overall. In contrast to the trend seen in Scotland,
the availability of permanent candidates rose sharply at the UK level.

Softest increase in temp candidates for four months
Scottish recruiters reported an expansion of temp staff supply for the fifth month in a row during February. However, the rate of increase was the weakest since last October, with some recruiters noting a reduced willingness among candidates to pursue new opportunities. The rate of growth in temp candidate
availability across Scotland was also much slower than the UK-wide average.

Sharp rise in permanent starting salaries
As has been the case in each month since December 2020, pay increased for permanent new joiners across Scotland during February. The rise in salaries was widely attributed to shortages of suitably skilled candidates. For the first time since November, the rate of salary inflation across Scotland was stronger than that seen for the UK as a whole.

Temp vacancies decline sharply
February data revealed a seventh successive monthly fall in demand for short-term staff
across Scotland. The rate of contraction softened from the previous survey period but
was sharp overall. Short-term vacancies across the UK as a whole meanwhile declined for the
first time in three-and-a-half years, albeit only marginally.

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