finance

Companies hire temporary instead of permanent staff amid virus restrictions



Businesses are turning to temporary staff to fill vacancies as coronavirus restrictions continue to “stifle” hiring for permanent roles, according to an economic report.

The latest Royal Bank of Scotland Report on Jobs found the 11-month trend of a drop in permanent job placements continued in December, although the decline slowed to a “noticeably slower pace” from November.

Respondents blamed the latest reduction on Covid-19 lockdown measures.

Trends between Scotland and the UK diverged in December, with permanent places in the UK as a whole rising for the first time since September.

Meanwhile, temporary appointments rose for the fourth consecutive month in the quickest increase in demand for short-term staff since late 2019.

Those surveyed said companies had taken on additional staff due to slightly improved demand.

Permanent candidate availability also rose at the UK level in December, with the upturn slightly faster than in Scotland.

The report also found a rise in pay, with starting salaries for permanent roles increasing for the first time since March.

Average hourly pay rates for short-term staff also rose, with the rate of wage inflation the quickest since September 2019.

Royal Bank of Scotland chief economist,Sebastian Burnside, said: “Ongoing restrictions and lockdown measures continued to stifle hiring activity in Scotland in December as permanent staff appointments and vacancies declined further. That said, the rates of reduction were not as severe as those seen in November.

“There was further evidence that firms were turning to short-term staff to fill vacancies, as temp billings rose markedly again amid the sharpest increase in temp staff demand for a year, reflecting ongoing uncertainty regarding the short-term outlook.

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“With the recent announcement of a national lockdown in Scotland, job seekers are likely to have a much more challenging time in the months ahead.

“Permanent appointments and temp billings declined at record rates amid the lockdown in spring last year, and similar measures may bring a further unprecedented drop in hiring activity while case numbers are brought under control and the vaccine rolled out.”

The data was collected from about 100 Scottish recruitment and employment consultancies between 4 and 17 December.



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