There was a drop in recruitment activity across Scotland at the start of 2024, the latest Royal Bank of Scotland Report on Jobs has found.

The report is based on a monthly survey of around 70 recruitment and employment consultants, and provides an up-to-date view of Scottish labour market trends.

The surveyed consultants said that subdued levels of business activity and ongoing uncertainty has discouraged both companies from taking on additional staff and workers from seeking new roles.

Permanent Staff Supply Continues to Drop
Further deterioration in the availability of permanent candidates in Scotland was recorded last month, extending the current run of contraction to three years. In contrast, an eleventh successive monthly expansion in permanent staff supply was seen at the UK level.

The availability of temporary candidates across Scotland improved in January however, and for the fifth month in a row. It also expanded across the UK as a whole.

Further Downturn in Permanent Staff Demand
Permanent staff demand from Scottish businesses weakened again in January. What’s more, the pace at which vacancies contracted quickened for the fifth straight month and to the strongest since November 2020. At the UK level, a further drop in permanent vacancies was seen as well, albeit only marginally.

The sixth successive monthly reduction in temporary vacancies was also recorded in Scotland last month, with the downturn being the most pronounced since mid-2020. Meanwhile, recruiters at the UK level saw a slight rise in demand for temp workers.

Sustained Decline in Permanent Placements
Regarding permanent placements, a second consecutive monthly decline was recorded during January and was sharp overall. That said, permanent staff appointments also fell at the UK level—and at a stronger rate than seen in Scotland.

Scottish temporary billings fell markedly in January too, ending a two-month sequence of growth. While temp billings fell across the UK as a whole, the level of decrease was only slight and notably weaker than what was seen in Scotland.

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Speaking on the overall findings for January, Sebastian Burnside, chief economist at Royal Bank of Scotland, commented: “The health of the Scottish labour market weakened at the start of the year, with recruitment agencies revealing notable declines for both permanent placements and temp billings.

“The subdued economic climate, high costs and uncertainty over the year ahead all contributed to muted hiring activity at businesses.”

He also noted that “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.”