Permanent job placements plunge after Brexit vote

The Brexit vote has hit Scotland's labour market, with the steepest drop in permanent job placements since 2009, according to a survey covering July.

The Brexit vote was blamed as the 'root cause' of the slump in placements. Picture: Ian Georgeson

The country’s recruitment consultancies recorded the most marked decline for seven years in the number of people being given permanent positions – with about 37 per cent of participants reporting a drop.

The monthly jobs report from the Recruitment and Employment Confederation (REC), which surveyed 100 consultants, found the fall in permanent appointments contrasted with a modest rise in temporary placements.

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REC chief executive Kevin Green said the figures reflect the “dramatic freefall” seen in the UK labour market during July, citing economic turbulence caused by the June vote to leave the European Union as the “root cause”.

The survey also found permanent salaries showed the slowest increase for almost three years in July, with the rate of inflation down for a second successive month.

There was a similar pattern in hourly rates of pay for temporary staff, growth in which, having hit a survey-record high in April, slowed to near stagnation at the start of the third quarter.

Permanent candidate availability continued to deteriorate across Scotland during July. However, the availability of candidates for temporary vacancies increased for the second month running and the greatest extent since February 2012.

Green said: “The UK jobs market suffered a dramatic freefall in July, with permanent hiring dropping to levels not seen since the recession of 2009.

“Demand for staff remains strong with vacancies continuing to rise, but the sharp fall in placements suggests that businesses are highly cautious about committing to new hires. Economic turbulence following the vote to leave the EU is undoubtedly the root cause.

“The record-high employment rate and ongoing skill shortages have made it difficult for employers to find suitable candidates for the roles available in the past, and this remains the case.”