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 September figures show that Perm hiring and vacancies decline with a weaker outlook for the Scottish labour market in the remaining months of 2023.

Sebastian Burnside, Chief Economist at Royal Bank of Scotland, commented:
“Recruitment activity across the Scottish labour market deteriorated as the third quarter drew to a close. Both permanent staff appointments and temp billings fell at sharp rates, with panellists linking the reductions to candidate shortages and falling demand for labour amid concerns over the wider economic climate.”

“Uncertainty around the outlook also meant that workers were more hesitant to risk a job move, leading to further falls in staff availability. Moreover, ongoing candidate shortages and the increasing cost of living prompted employers to raise their pay offer to attract and secure workers”.

Key headlines include:
Sustained fall in new permanent hires
Downturn in permanent staff supply remains marked
Marked rise in salaries for permanent workers
Quicker fall in permanent vacancies

What we are seeing UK wide is that the labour market is starting to look slightly precarious again it is hoped that the recent slight calming of inflation rates positively impacts the outlook for both employers and jobseekers.”

Sustained fall in new permanent hires
Scottish recruiters recorded a second successive monthly fall in permanent placements during September. The rate of contraction quickened from August and was sharp overall. According to panellists, the downturn was linked to fewer vacancies as well as some reports of difficulties in sourcing and securing candidates.
Permanent staff appointments across Scotland fell at a slightly quicker rate than that seen on average across the UK.

Downturn in permanent staff supply remains marked
The availability of candidates to fill permanent job roles in Scotland decreased during September, thereby stretching the current period of decline that began in February 2021. Meanwhile, permanent labour supply expanded across the UK as a whole in September.

Marked rise in salaries for permanent workers
September data pointed to a rise in salaries awarded to permanent new joiners across Scotland. Moreover, the upturn was the fastest since June and marked overall. According to anecdotal evidence, stronger competition for skilled labour pushed up starting pay. Permanent starters’ pay also rose at the UK level, though the rate of increase remained softer than that seen for Scotland

Quicker fall in permanent vacancies
The Permanent Vacancies Index is derived from eight sectoral indices of the demand for
permanent staff at recruitment consultancies. The Index is a weighted average of the eight
individual sector indices. After falling for the first time in over two-and a-half years in August, demand for permanent staff deteriorated further across Scotland in September. Moreover, the rate of decrease was
the most pronounced since December 2020 and outpaced the UK-wide average. Of the eight monitored sectors, Executive & Professional registered the sharpest drop in vacancies, followed by Secretarial & Clerical.

Temp report showed
Downturn in temp billings softens, but remains marked.
Starting salary inflation ticks up to three-month high

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