Hiring activity in Scotland slowed in December for the third month in a row as recession fears and market uncertainty dampened demand for recruits, but a continuing shortage of candidates kept upward pressure on wages.
The rate of contraction in permanent placements eased from the previous month, with the Report on Jobs index from the Royal Bank of Scotland climbing from 40.6 in November to 46.8 in December. Anything below a reading of 50.0 indicates a decline in activity.
Recruitment consultancies also reported a reduction in billings received from the employment of short-term staff. The rate of contraction was faster than in November, but still “mild overall”.
Royal Bank chief economist Sebastian Burnside said survey panel members reported increased caution among employers towards the end of the year as the UK braces for what is expected to be a prolonged economic downturn fuelled by surging inflation.
READ MORE: Hiring activity stutters but demand still defies economic gravity
“Demand for labour also softened, adding to the likelihood that challenges across the labour market will persist as we enter the new year,” he added.
“Nonetheless, with difficulties sourcing suitable candidates, firms continued to raise rates of starting pay. Thus, the data overall suggest that firms are becoming more selective and guarded with their hiring decisions, but willing to offer competitive pay to candidates to secure them.”
Permanent and temporary vacancies expanded at the weakest rates in 22 and 27 months respectively, but the availability of candidates to fill permanent positions across Scotland worsened for the 23rd month in a row. Temporary candidate numbers fell for the 22nd consecutive month.
READ MORE: Over-65s increasingly returning to work, but labour shortages still persist
Starting salaries in Scotland rose at a much faster pace than was recorded at UK level, with the pace of increase in December quickening from October’s 16-month low. The latest upturn was the steepest since June and above the historical average, with a scarcity of labour and skills blamed for December’s reading of 74.9.
Temporary wages also grew at a much stronger rate than across the whole of the UK, stretching the current run of inflation to 25 months. The index reading of 64.4 eased slightly from November but was still stronger than the survey average, signalling a sharp rise in hourly wages overall.
Demand for permanent staff eased but remained in positive territory at 55.4, with the strongest upturns in nursing/medical/care and the IT and computing sectors.
The temporary vacancies index also remained marginally positive at 51.0, its lowest level in 27 months. Demand was strongest for IT & computing staff at a reading of 70.2, followed by nursing/medical/care at 60.7.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here