• Fresh rise in permanent placements during January
  • Decline in temp billings quickens markedly from December
  • Pressure on starting salaries remains elevated

The latest data from the Royal Bank of Scotland Report on Jobs survey revealed a rebound in the number of people placed in permanent jobs during January. At 54.7, the seasonally adjusted Permanent Placements Index rose from 46.8 in December to post above the neutral 50.0 threshold and signal an upturn in permanent staff hires for the first time in four months. According to Scottish recruiters, improved demand for permanent staff and new projects supported the upturn at the start of the year. However, a sharp and accelerated fall in temp billings was also recorded in January. Turning to vacancies, growth of permanent roles slipped to a two-year low, while demand for temp staff fell for the first time in 28 months. Nonetheless, pressures on pay remained strong as the cost-of-living crisis and skill shortages drove further increases in salaries and wages. 


Rebound in permanent placements

Following monthly contractions throughout the last quarter of 2022, latest data pointed to a notable rebound in permanent staff appointments across Scotland in January. The respective seasonally adjusted index increased further from November's recent low, indicating a solid rate of growth that was broadly in line with the historical average. The fresh upturn in permanent staff hires was attributed to improved client demand and new projects. 

Scotland went against the broader UK trend, which recorded a fourth successive monthly decline in permanent placements at the start of 2023.

Temp billings fell across the Scottish private sector again in January, thereby extending the current sequence of reduction to four months. Moreover, the rate of decline quickened markedly from the preceding survey period and was the fastest since June 2020. Recruiters linked the downturn to relatively subdued market conditions and weaker-than-expected activity levels at clients.  

The decrease in temp billings in Scotland contrasted with a modest upturn across the UK as a whole. 


Softest fall in permanent labour supply for 22 months

Permanent staff availability fell in January, thereby extending the trend which has been observed since February 2021. Recruiters indicated that uncertainty around the outlook and the cost-of-living crisis had damped staff availability. However, while the rate of decline was marked overall and faster than the historical average, the seasonally adjusted index did improve to a 22-month high. 

A drop in permanent staff availability was also recorded across the UK as a whole, but the downturn was softer than that seen in Scotland. 

Scottish recruiters registered a fall in temp staff supply for the twenty-third month running in January. Greater availability and interest in permanent roles was linked to the reduction in the supply of temp workers. Though the rate of decline eased to the softest in 21 months, it remained rapid overall. 

At the UK level, the supply of temp staff declined at a softer pace in January and one that was slower than that seen in Scotland.


Steep increase in permanent salaries

Permanent starting salaries in Scotland continued to rise sharply in January. Though the respective seasonally adjusted index ticked down from December's six-month high, the latest reading was comfortably above the survey average and signalled a much faster upturn than the UK average. Candidate shortages and increased living costs were the main drivers of pay growth in the latest survey, according to recruiters. 

January data revealed an accelerated rise in average hourly pay rates for temporary staff in Scotland. Temp wages rose markedly and at the second-fastest pace on record with recruiters linking the latest rise to the cost-of-living crisis and skill shortages. 

While temp wages across the UK as a whole also rose at a quicker pace, the upturn remained slower than that seen in Scotland. 


Softest upturn in demand for permanent staff in nearly two years

Demand for permanent staff rose across Scotland in January, thereby extending the current sequence of increase to two years. However, the upturn in demand continued to weaken from the near-record pace registered last April and was weaker than the historical average. 

Of the eight monitored sectors, demand for permanent staff was strongest for Nursing/Medical/Care, with IT & Computing coming in second. 

Latest data for Scotland revealed the first fall in temp vacancies in 28 months during January. The pace of contraction was modest overall but contrasted with a strong upturn across the UK as a whole. 

The downturn was led by a sharp fall in demand for Blue Collar staff, followed by Secretarial & Clerical. 



Sebastian Burnside, Chief Economist at Royal Bank of Scotland, commented:

"The bounce back in permanent staff hiring across Scotland was a positive start to 2023, after having declined throughout the last quarter of 2022. Mentions of higher client activity and new projects suggest perhaps a brighter prospect for the year ahead than previously expected. However, while firms have been successful in securing new permanent starters in January, total demand for permanent staff moderated further, with vacancies rising at the softest pace in nearly two years. At the same time, demand for temporary workers fell for the first time in 28 months. The data indicates a shift in the market with a preference for permanent staff. However, lingering concerns over the economic outlook and intense cost pressures at firms indicate that recruitment decisions may be under more pressure in the months ahead.” 


Royal Bank of Scotland is supporting civil and corporate customers affected by COVID-19. For advice or support visit:  https://www.business.rbs.co.uk/business/support-centre/service-status/coronavirus.html


Royal Bank of Scotland

Vonnie Sandlan

Regional Media & Campaigns Manager

+44 740 127 8778



S&P Global

Maryam Baluch


S&P Global Market Intelligence

+44 134 432 7213



Sabrina Mayeen

Corporate Communications

S&P Global Market Intelligence

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Notes to Editors

This report, compiled by S&P Global, is based on a monthly survey of around 100 recruitment and employment consultants, and provides up-to-date information on Scottish labour market trends and is seasonally adjusted.

The information in this report is directly comparable with the KPMG and REC, Report on Jobs survey for the UK, which uses an identical methodology. The KPMG and REC index for the UK has a strong track record of accurately anticipating changes in unemployment, employment and average earnings.

All Index numbers are calculated from the percentages of respondents reporting an improvement, no change or decline. These indices vary between 0 and 100 with reading of exactly 50.0 signalling no change on the previous month. Readings above 50 signal an increase or improvement; readings below 50 signal a decline or deterioration. Reasons given by survey respondents for any changes are analysed to provide insight into the causes of movements in the indices and are also used to adjust for expected seasonal variations.

January data were collected 12-25 January 2023.

S&P Global do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. Historical data relating to the underlying (unadjusted) numbers, first published seasonally adjusted series and subsequently revised data are available to subscribers from S&P Global. Please contact economics@ihsmarkit.com.

A regional Report on Jobs series is now available comprising five regional reports tracking labour market trends across the Midlands, the North of England, the South of England, Scotland and London. The reports are designed to provide a comprehensive and up-to-date guide to labour market trends and the data are directly comparable with the UK Report on Jobs.

About the Recruitment & Employment Confederation

Dorset House, First Floor, 27-45 Stamford Street, London, SE1 9NT. Tel: 020 7009 2100

The REC is the voice of the recruitment industry, speaking up for great recruiters. We drive standards and empower recruitment businesses to build better futures for their candidates and themselves. We are champions of an industry which is fundamental to the strength of the UK economy. Find out more about the Recruitment & Employment Confederation at www.rec.uk.com.

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Read the full Royal Bank of Scotland Report on Jobs here. (PDF 412KB)

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