This aligns with data from the prior Report on Jobs, which suggested “a weaker outlook for the Scottish labour market in the remaining months of 2023.”

Regarding permanent staff appointments, Scottish recruiters recorded a second monthly fall in September, with the rate of contraction quickening from August and being sharp overall. The downturn was linked to fewer vacancies as well as some reports of difficulties in sourcing and securing candidates, respondents noted.

September’s data also signalled a sharp drop in temp recruitment across Scotland, thereby extending the current run of decrease to a year. Recruiters attributed the drop to weaker demand conditions and candidate shortages in certain sectors.

Amid candidate shortages, salaries for prospective permanent employees and wages for temporary staff rose in September, with the upturn in permanent salaries being the fastest since June and marked overall.

In terms of staff supply, the availability of permanent candidates in Scotland also decreased during September, stretching the current period of decline that began in February 2021. Despite easing to a three-month low, the rate of contraction remained sharp. Recruitment consultancies cited generally tight labour market conditions and skills shortages had weighed on candidate numbers.

There was also a further fall in temp staff supply during September, continuing a trend which has been apparent for just over two-and-a-half years. Moreover, the rate of contraction was the quickest in three months, and was strong in the context of historical data. Recruitment agencies highlighted an increased reluctance among workers to move roles amid concerns over job security.

Lastly, and after falling for the first time in over two-and-a-half years in August, demand for permanent staff further deteriorated across Scotland in September, with temp vacancies also contracting.

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Speaking on the survey’s findings, Sebastian Burnside, chief economist at RBS, 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.”