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UK Report on Jobs – September 2023

Sharper fall in permanent staff appointments in September

Downturn in temp billings softens, but remains marked

Starting salary inflation ticks up to three-month high

According to the latest Royal Bank of Scotland Report on Jobs survey, both permanent staff appointments and temp billings contracted sharply in September. Panellists linked reduced hiring activity to fewer vacancies, weaker confidence around the outlook, and shortages of suitably-skilled candidates that made it harder to fill any outstanding roles. Notably, demand for staff weakened again, while the supply of both permanent and temp candidates deteriorated in September, with some workers hesitant to move roles given lingering uncertainty around the economic outlook. As a result, competition for skilled and scarce labour led to further increases in starting pay. Trends diverged, however, as permanent salaries grew at the sharpest pace since June, while temp wage inflation slipped to a three-month low and was modest overall.

Sebastian Burnside, Chief Economist at Royal Bank of Scotland, commented:
“Recruitment activity across the Scottish labour market deteriorated as the third quarter drew to a close. Both permanent staff appointments and temp billings fell at sharp rates, with panellists linking the reductions to candidate shortages and falling demand for labour amid concerns over the wider economic climate.

“Uncertainty around the outlook also meant that workers were more hesitant to risk a job move, leading to further falls in staff availability. Moreover, ongoing candidate shortages and the increasing cost of living prompted employers to raise their pay offer to attract and secure workers.”

Produced in association with REC.
The Royal Bank of Scotland Report on Jobs is compiled by S&P Global from responses to questionnaires sent to a panel of around 70 Scottish recruitment and employment consultancies. Survey responses are collected in the second half of each month and indicate the direction of change compared to the previous month. A diffusion index is calculated for each survey variable.

The index is the sum of the percentage of ‘higher’ responses and half the percentage of ‘unchanged’ responses. The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an
overall decrease. The indices are then seasonally adjusted.

The headline figure is the Permanent Placements Index, calculated from responses to the question “Is the number of people placed in permanent jobs higher, the same or lower than one month ago?”.

Underlying survey data are not revised after publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. For further information on the survey methodology, please contact economics@spglobal.com.

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