Scotland saw a fall in permanent staff placements for the second consecutive month in March.
The latest Royal Bank of Scotland Report on Jobs survey suggested that the reduction was fuelled by ongoing economic uncertainty, which resulted in increased hesitancy among companies to commit to new hires.
Additionally, temporary billings fell for the sixth month running.
In terms of labour supply, there was a further sharp fall in the number of candidates for permanent vacancies, while temp staff availability fell at the weakest pace in the current 25-month period of contraction.
At the same time, growth of demand for permanent staff moderated in March, with vacancies rising at the slowest pace in just over two years.
Permanent placements across Scotland fell for the fifth time in the past six months in March. According to recruiters, the latest downturn was largely driven by economic uncertainty and hesitancy to commit to new hires.
While the rate of contraction across Scotland moderated notably from February, it was stronger than that recorded for the UK as a whole.
In terms of pay, pressures on starting salaries and wages remained marked, partly due to the cost-of-living crisis, but also competition for workers amid ongoing labour shortages.
Salaries for new permanent hires rose rapidly across Scotland in March. While the rate of inflation was stronger than the historical and UK-wide averages, the pace of growth was the softest seen in 23 months.
March data pointed to a sharp rise in hourly wages for temporary workers across Scotland, thereby extending the current run of growth to 28 months. While the pace of temp wage inflation intensified from February, the upturn was among the weakest in the sequence - and broadly in line with the historical average.
Permanent job openings grew solidly across Scotland in March. However, the latest upturn was the softest seen for just over two years and weaker than that at the UK-wide level.
Of the eight monitored sectors, nursing and care saw the strongest upturn in permanent staff demand, with IT and computing ranking second.
The steepest drop in temp staff demand was seen for blue collar roles, followed by executive and professional.
RBS chief economist Sebastian Burnside commented: “March data revealed a further decline in hiring activity across Scotland, as ongoing economic uncertainty weighed on firms’ appetite for new staff.
“Moreover, with growth in permanent vacancies weakening further, and temp vacancies falling for the third month running, it appears unlikely that recruitment trends will improve much in the coming months.
“Nevertheless, despite the slowdown in hiring, pay pressures remained acute - this was in part fuelled by the cost-of-living crisis, but also increased competition for scarce candidates.”
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