Downturn in hiring activity to start 2024

Downturn in hiring activity to start 2024

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 January figures show a decline in hiring activity to start 2024

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.

Sebastian Burnside, Chief Economist at Royal Bank of Scotland, commented:

“The downturn in hiring activity in Scotland reflected the trends seen across the UK as a whole, with many employers pausing recruitment decisions until the economic environment improves and market confidence revives”

Here are some selected headlines:

Sustained decline in permanent placements
Scottish recruitment agencies recorded a second consecutive monthly decline in permanent placements during January. Permanent staff appointments also fell at the UK level and at a stronger rate than observed in Scotland.

Fresh and sharp fall in temp billings
January survey data pointed to a fresh fall in temporary billings across Scotland. 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. 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.

Sustained, albeit slower rise in temp staff availability
As observed in each of the last four months, the availability of temporary candidates across Scotland improved in January. Temp staff supply also expanded at a softer pace across the UK as a whole, albeit one that remained sharp overall.

Downturn in permanent job openings gathers pace
Permanent staff demand weakened again across Scotland in January. The pace at which vacancies contracted quickened for the fifth straight month to the strongest since November 2020. Recruiters across the UK as a whole also noted a further drop in permanent vacancies, albeit only marginal.

Steep and accelerated fall in temp vacancies
Recruitment consultancies across Scotland recorded a sixth successive monthly reduction in temporary vacancies during January. The downturn was the most pronounced since mid-2020. Meanwhile, recruiters across the UK reported a slight rise in demand for temp workers.

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