Temp staff in hot demand as Scots employers grapple with Brexit

Scottish firms are taking on more temporary staff due to the uncertainty surrounding Brexit while permanent staff appointments have fallen for the third consecutive month, a report today suggests

The monthly Report on Jobs is issued by Royal Bank of Scotland. Picture: Contributed

Releasing its latest Report on Jobs, Royal Bank of Scotland said the UK’s exit from the European Union had caused more firms to fill posts with temporary staff due to a lack of long-term clarity.

The study found that temporary billings grew sharply last month, and for the third month in a row.

Meanwhile, recruitment agencies in Scotland pointed to a solid fall in permanent placements in September, which extended the current sequence of contraction to three months. The latest reduction was the fastest for more than two-and-a-half years.

Sebastian Burnside is chief economist at Royal Bank of Scotland. Picture: Ian Jacobs

The report is compiled by asking 100 recruitment and employment consultants if they feel certain parts of the jobs market have changed in the past month.

The researchers collate each answer into an index number between zero and 100, with 50 meaning no change, above 50 meaning an upward shift and below 50 highlighting a downward trend over the previous month.

For the number of permanent placements, the number has fallen from 48.8 in August to 47.4 last month.

The index for the number of billings received by recruitment agencies continued to rise, though the jump was less sharp than in August, at 56.

A number of panellists asked for their input said uncertainty – particularly around Brexit – had impacted on hiring decisions.

Contraction

Sebastian Burnside, chief economist at Royal Bank of Scotland, said: “Latest survey data highlighted a contraction in permanent placements in Scotland for the third month in a row, with the fall accelerating to the sharpest since January 2017.

“Growth of demand for permanent staff eased further; the increase in September was the slowest in six-and-a-half years, indicating further softening of the labour market. Meanwhile, temporary staff billings continued to rise, with growth in Scotland outperforming the UK as a whole for the third month running.

“Overall, September data showed little signs of a recovery, with the Scottish labour market registering a relatively subdued performance in the context of historical data.

“Moreover, uncertainty continues to weigh on hiring decisions, with firms turning to short-term staff to fill vacancies until there is greater clarity around Brexit.”

The research is compiled by IHS Markit and is directly comparable with the KPMG and Recruitment & Employment Confederation’s Report on Jobs survey for the UK, which uses an identical methodology.