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Recruitment slows across Scotland

Research by the Royal Bank of Scotland (RBS) suggests the post-Covid hiring boom has ended in Scotland, and that the decline in recruitment is likely to be reflected across the rest of the UK.

The research found recruitment activity has weakened, with “sustained downturns” recorded for both permanent and temporary staff and a slump in vacancies.

The pace of decline in vacancies for permanent roles is at its fastest since December 2020.

Meanwhile, the demand for temporary staff has declined at its fastest for 39 months. 

Sebastian Burnside, chief economist at RBS, said: “The latest data highlights ongoing weakness across the Scottish jobs market.

“Hiring activity was cut back, with recruiters noting softer demand for both permanent and temporary staff in October.” 

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He said the data suggested the post-lockdown hiring boom was over, and that increased uncertainty surrounding the economic climate is weighing on business decisions and candidate movement.”

Paul Devoy, CEO of Investors in People, told HR magazine: “The results shown in this data certainly chime with what we’re seeing played out in the rest of the UK.

“Companies are struggling with repaying borrowing, and are facing rising cost pressures, which is having a direct impact on confidence in hiring.”

When positions do become available, the research suggests that it is harder for recruiters to lure talent away as candidate availability continues to deteriorate, extending a run that began in February 2021. 

Speaking to HR magazine, Natasha Kearslake, director at recruitment consultancy, Organic P&O Solutions, said: “We’re definitely seeing recruitment taking longer, and this is being driven by fewer people wanting to risk leaving where they are, but also due to people feeling much more empowered to negotiate offers."

However, Thea Watson, growth director at BrightHR, said the downturn being reported by RBS could be more of a natural correction rather than a slump. 

Speaking to HR magazine, she said: “The post-pandemic recruitment boom was much larger than most people expected, so this natural correction perhaps looks bigger and more worrying than it really is. I think firms are still hiring, but they’re doing more selective hiring. I think it’s more a cooling off than a big hiring collapse.”

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Devoy added that for too long, firms have been overly reliant on being able to easily access talent pools – and are now being exposed now talent is more scarce.

He said: “Companies are realising that in these tougher times, where it’s harder to actually find people, they should have been investing in training and developing their own people.

“Companies have ignored growing their own talent. Employers now need to think differently about how they develop their people.”

This view was echoed by Amrit Sandhar, CEO of consultancy &Evolve. He said: “Slow hiring periods offer the perfect opportunity for HR to shift its focus towards training and development for current employees.” 

But he warned HR needs to stay aware of how hiring slowdowns could impact the rest of the workforce.

He said: “It’s likely existing employees will have to increase their workload and take on additional responsibilities, so it’s HR’s job to manage this redistribution in a way that ensures tasks are shared equitably, to maintain productivity and to avoid burnout.”