Concerns about the National Living Wage are impacting on Scottish job recruitment, according to accountants and business advisers BDO.
A sharp fall in hiring intentions could lead to a rise in productivity, however.
BDO’s latest employment index tracking firms’ hiring intentions in the coming six months has fallen from 104.8 to 102.2, the biggest drop since the aftermath of the financial crisis.
“Firms in Scotland appear to be increasingly shunning new hires as the National Living Wage makes employment more expensive,” the report stated.
“Some firms may also be holding off until uncertainty about future membership of the EU is resolved.”
Martin Gill of BDO said the figures suggest Scottish businesses are concerned about the direction the economy is travelling.
He added: “While this trend will slow the growth of the workforce in Scotland, it could signal the start of a move toward a high investment, higher productivity economy.
“In the long run, this would help us generate higher living standards and more interesting jobs for Scottish workers.”