Experimental feature

Listen to this article

Experimental feature

The Scottish independence referendum is having a chilling effect on employers’ plans to hire workers north of the border, the UK’s second biggest recruitment company has warned.

Manpower said confidence in the Scottish jobs market had “taken a tumble”, as it released its quarterly survey of UK employers’ hiring intentions.

The survey of about 2,100 companies, which was conducted last month, showed 3 per cent more employers planned to expand rather than reduce their workforces in Scotland, down from 9 per cent in the previous quarter.

Across the UK as a whole, the figure was a more buoyant 6 per cent.

The slowdown in Scotland’s labour market could partly reflect the loss of temporary jobs after the Commonwealth Games and other summer events, Manpower said. But the recruiter also warned that employers were “hesitant to take on staff while there is a big question mark hanging over Scotland’s future”.

James Hick, managing director at ManpowerGroup Solutions, said the uncertainty about Scotland was an important factor for some clients.

“You [get] people thinking, shall I make investments, shall I hire 50 people north of the border or shall I hire them in Newcastle?” he said. “It’s that feeling of certainty that they’re generally looking for . . . That example of Newcastle is a real one.”

The construction and retail sectors in Scotland seemed to have suffered the biggest loss of confidence, he said.

Manpower’s survey comes a day after the Lloyds Bank regional purchasing managers’ index showed business activity in Scotland was expanding at the slowest rate of all the UK’s regions.

While the headline rate of business activity for the whole of the UK hit a nine-month high of 59.3, significantly above the 50 mark that separates expansion from contraction, Scotland’s business activity index fell to 54.6 – down from 56.8 the previous month.

These surveys come amid reports of a late surge of support for independence ahead of the September 18 vote. However, the unofficial evidence has yet to show up in the official labour market data. The latest set, released in mid-August, showed the employment rate in Scotland at a record high.

Manpower is itself a leading employer in Scotland. Mr Hick said the company would prefer it if Scotland remained in the UK.

“We operate in many different countries, we’ve a very strong business in Ireland, so we’re familiar with working across different territories and borders within the UK and Ireland, but it’s not something that is helpful for us,” he said.

“We do talk to our clients and other stakeholders in our business, we don’t find that many people who are actually in favour of it.”

Manpower said the survey also pointed to a slight cooling in the overall UK labour market after a frenetic hiring spree during the past year that has pushed unemployment down to 6.4 per cent.

Get alerts on Scottish Independence when a new story is published

Copyright The Financial Times Limited 2018. All rights reserved.

Follow the topics in this article