Worker shortage still holding back city firms

Published on Monday 22 October 2007 12:11

THERE is still a shortage of key workers across a range of industries in the Capital, an authoritative labour market report revealed today.

Edinburgh has seen a sharper decline in the availability of permanent staff than any other Scottish city, according to the Bank of Scotland.

The bank said recruiters are continuing to experience difficulties finding the right qualified staff to take up positions.

The problem is being felt worst in accounting and finance, engineering and construction, executive and professional, and IT and computing.

Such is the extent of the problem, many industries are being forced to rely on incoming immigrant workers to plug the skills gap, the bank says.

But for other industries, like the Capital's buoyant financial services, highly-skilled employees required for key positions are having to be relocated to Edinburgh from London.

September's Bank of Scotland Labour Market Report found that the number of permanent staff placements in the month rose at the slowest pace for six months.

Ross Keany, a spokesman for the Bank of Scotland, said: "In one way it is a good thing because it is a clear indication of the strength of the economy in Edinburgh. There are a lot of jobs being created and unemployment is always very low.

"But while there is demand for labour there simply aren't enough people around."

He said Polish people and other Eastern Europeans had made a very positive contribution to the Capital's economy, but added that for the financial services industry it is not possible to take the same recruitment approach.

While companies would prefer to employ from within their city, the skills shortage is forcing them to invest in staff elsewhere.

"It's an expensive process recruiting and relocating," Mr Keany said. "It can cost 50 per cent of someone's salary just sourcing and relocating them. Wages are not as high in Edinburgh as London but the cost of living is more affordable."

The labour market report did, however, indicate a slight tailing-off of the demand for staff across Scotland, with the smallest increase in demand for over a year.

Permanent staff availability fell, with around 44 per cent of recruitment firms signalling a decline.

The most sought-after category in September was engineering and construction, closely followed by financial and accounts.

Tim Crawford, group economist at Bank of Scotland, said:

"Employment continues to increase in Scotland's major cities."