Scottish businesses favouring temporary staff, RBS research suggests

8 August 2019, 06:58 | Updated: 8 August 2019, 07:02

Permanent job roles are being shunned in favour of firms employing temporary staff, Royal Bank of Scotland research has found.

The number of permanent staff appointments in Scotland has fallen for the first time in more than two and a half years as businesses opt for temporary workers.

Demand for temporary staff grew sharply in July, according to the bank's jobs report into the employment market, contrasting with the joint-slowest rise in permanent job vacancies since August 2016.

The report suggests firms were looking at short-term staff to fulfil roles, with the sharpest rise in temporary job vacancies in Scotland since December 2018.

The latest survey data indicated that starting salaries for permanent staff has increased slightly, but temporary wage growth was described as "softer".

Warning about the availability of labour, the report adds: "The decline in permanent staff placements coincided with a steep and accelerated deterioration in permanent labour supply across Scotland that was among the fastest recorded in the survey history."

Royal Bank of Scotland chief economist Sebastian Burnside said: "While Report on Jobs data has shown falling permanent placements at the aggregate UK level in each month since March, Scotland had shown resilience to defy this trend and continue posting healthy jobs growth in the first half of the year.

"However, the upturn in permanent staff appointments across Scotland came to an end in July, as permanent hiring fell for the first time in two-and-a-half years."

He added: "Other indicators also showed signs of a softening labour market.

"Permanent vacancy growth dipped and was the joint-weakest since August 2016.

"Firms appeared to look to short-term workers to fulfil roles at their firms.

"Alongside the renewed rise in temp billings, demand for short-term staff rose at a sharper rate in July."