Demand increases for Scots jobs but supply dwindling

Scotland's job market has ended the first quarter in rude health after seeing increased demand and pay packets for both temporary and permanent workers, according to a study published today.

The findings by the Markit UK Report on Jobs: Scotland from the Recruitment & Employment Confederation (REC) fuel hopes that a recession north of the Border may be avoided after it emerged that Scottish economic output shrank in the last three months of 2016, compared to growth by the UK as a whole.

However, the survey of about 100 recruiters also shines a spotlight on the lack of candidates with suitable skills, with REC saying the problem will only worsen with the UK exiting the European Union.

Employment firms reported a jump in the number of permanent staff appointments for the second month in a row in March, and temporary billings showed the sharpest rise since August 2014.

However, the rate of growth in permanent staff appointments failed to match that of their temporary counterparts, with the latter showing the fastest hike in more than two and a half years.

Growth of demand for permanent staff was at its steepest for more than two years, although fell short of the rate seen across the UK, and was slightly stronger than demand for temporary workers.

Recruiters highlighted especially high growth in demand for staff in the engineering and construction, IT and computing, and nursing/medical/care sectors. Additionally, secretarial and clerical saw a notable jump, with both short-term and permanent vacancies seeing the quickest acceleration in about three years. The worst-performing sector for both temporary and permanent vacancies was the hotel and catering industry.

The REC also said that, overall, the availability of temporary workers fell again in March after an upward turn at the tail end of last year, and that of permanent staff fell, as per the trend over the past five years.

Anecdotal evidence was cited that a lack of talent pushed up pay rates, with average wages for temporary/contract staff rising significantly in March, speeding up for the second month running, and average salaries for permanent staff growing “markedly”.

REC chief executive Kevin Green said: “Finding people to do the jobs on offer is rapidly becoming employers’ biggest headache and many are reporting an increasing number of white collar jobs as hard to fill.

“Our concern is that Brexit will make the problem worse, particularly if onerous restrictions are imposed on people coming from the EU to work.

“Also, economic uncertainty about future prospects is having a detrimental effect on employees’ willingness to risk a career move at this time, which seems to be driving down candidate availability,” he added, although he said the shortage is currently worse in London and the south than it is in Scotland.