This is according to the latest Royal Bank of Scotland Report on Jobs, compiled by S&P Global, which has revealed concerning trends in Scotland’s labuor market, indicating a significant deterioration in recruitment activities last month.

According to the report, both permanent and temporary job vacancies experienced a sustained decline for the eighth consecutive month. This decline in opportunities has been attributed to a combination of factors, such as labour shortages, increased efforts to secure qualified candidates, and heightened market uncertainty. 

“The Scottish labour market continued to exhibit weakness which has now existed for the most part of the last one-and-a-half years. Latest survey data highlighted that uncertainty regarding the outlook and firms looking to cut expenses impeded hiring activity,” said Sebastian Burnside, chief economist at RBS.

The report also highlighted that demand for both permanent and temporary workers experienced a sharp decline, with pressures on salaries and hourly wages reaching “historically muted” levels. In fact, pay increases were reported to be the weakest in more than three years.

Furthermore, the report revealed that while temporary placements across the UK reached their lowest point since July 2020, temporary staff wages experienced a slight increase by the end of the first quarter of the year. However, the situation in Scotland remained challenging, with a sixth successive monthly rise in temporary candidate availability indicating persistent difficulties in filling temporary positions.

Among the sectors most affected by the decline in demand for temporary staff were the executive and professional sectors. Additionally, the data showed a concerning trend of falling permanent candidate availability in Scotland, extending the current run of decrease to 38 months.

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“Meanwhile, though scarcity of suitably-skilled labour drove a further increase in permanent starting salaries during March, worsening hiring conditions meant pressures on pay eased. The rates of both starting salary and hourly wage inflation trended below their respective long-run averages,” continued Burnside.

As uncertainties persist and companies seek to cut expenses, the challenges facing job seekers and employers alike are likely to persist in the coming months, according to the report.