Permanent staff appointments and temporary billings declined, with permanent placements falling at the quickest rate in 15 months, though the downturn in temp billings moderated since January.

According to anecdotal evidence, economic uncertainty and subdued demand for staff had weighed on hiring decisions. Demand weakness was highlighted by marked falls in both permanent and temporary vacancies during February. However, pay pressures persisted amid competition for suitably-skilled workers.

February data revealed a third consecutive monthly fall in permanent staff appointments across Scotland. The rate of contraction quickened from January to the sharpest in 15 months. Anecdotal evidence generally linked the latest decline to fewer vacancies.

Permanent staff hires also fell across the UK as a whole. The rate of contraction was broadly unchanged from the previous survey period and sharp, albeit softer than that recorded for Scotland.

Temp staff supply rose slightly, but at the weakest rate since October 2022.

Both permanent and temporary staff pay increased, with permanent salaries rising at the fastest pace since November 2022 due to skills shortages. The nursing, medical, and care sectors were exceptions, registering higher permanent staff demand.

Sebastian Burnside

Sebastian Burnside, chief economist at Royal Bank of Scotland, commented: “The latest recruitment survey continues to highlight reduced hiring activity across Scotland amid a backdrop of lingering economic uncertainty.

“While lower confidence meant that employers remain wary of taking on additional staff, there were also reports that shortages of suitably-skilled workers had impacted recruiters abilities to fill roles.

“At the same time, candidates were cautious to seek new opportunities, instead favouring security in their current roles or pausing their job search.

“With vacancies continuing to fall, this suggests that we could see a further deterioration in hiring conditions across Scotland in the months to come.

“However, starting pay for both permanent new joiners and temp workers continued to increase at marked rates, suggesting that while overall hiring activity is down, for the right skillset employers are willing to raise their offers.”