SCOTLAND’S labour market recovery has stepped up a gear, with record rises in permanent jobs and starting salaries, research published today suggests.
The Bank of Scotland’s latest “report on jobs” points to strong and broad-based demand for staff continuing to drive the upturn.
It provides a fresh sign that the country’s economic recovery remains on track and follows last week’s news that the official rate of unemployment had fallen north of the Border.
However, a further sharp drop in the number of candidates for vacancies was described by Bank of Scotland as a “cause for concern”, having fallen continuously since early 2012.
Donald MacRae, the bank’s chief economist, said: “July’s barometer provided further proof of the continuing recovery. The month saw survey-record increases in both the number of people appointed to permanent jobs and in starting salaries.
“Demand for both permanent and temporary staff was expressed by a surge in vacancies accompanied by a drop in the number of candidates available.
“These trends should lead to further gains in employment and eventually to an increase in overall earnings growth. The Scottish economy continues to recover strongly,” he added.
According to the report, the number of people placed in permanent jobs rose sharply last month, with the rate of growth the fastest in the survey’s eleven-and-a-half year history.
Furthermore, the rise in permanent appointments was far sharper than across the UK economy as a whole. The employment of temporary/contract staff rose to the greatest extent since January, the report noted.
There was a record increase in salaries during July, which saw a second consecutive survey-record increase in permanent starting salaries.
Pay inflation was also faster than the UK average for the first time since February. A similar trend was recorded for temporary hourly pay rates, growth of which hit a four-month high.
Behind the faster increases in placements and pay was a further strengthening of demand for staff in July. Vacancies were up across both the permanent and temporary jobs spaces, with the number of openings having risen more markedly than in the previous month.
Permanent staff demand was strongest in the IT and computing sector, while in temporary jobs it was nursing/medical/care staff that were the most sought-after.
Permanent employee availability decreased markedly, albeit at a slightly slower rate than in June. The degree to which temporary candidate supply decreased, however, was the most marked since December 2004.
The survey came as separate research revealed that 400,000 home-based UK businesses are looking to take on an employee for the first time.
Insurance provider Direct Line for Business said new employees joining small and micro businesses this year will work on average 28 hours a week. Those looking to hire their first employee will expect the role to require fewer hours – some 21 hours a week.
The firm said that the influx of new workers could create more than £27 billion in wages. Jasvinder Gakhal, head of Direct Line for Business, said: “Small businesses are the lifeblood of our economy.”