'Full-steam ahead' for Scottish jobs market amid surge in hiring activity as restrictions ease

Scotland’s labour market witnessed an “unprecedented surge” in hiring activity last month but staff shortages remain a concern in several sectors, a key report today suggests.

Both permanent placements and temporary billings increased at the most marked rates in the history of Royal Bank of Scotland’s monthly Report on Jobs, as firms stepped up hiring efforts due to the easing of Covid restrictions.

The August data also highlighted a survey-record upturn in demand for both permanent and short term-staff, though candidate availability dropped steeply again.

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According to survey panellists, some people were still wary of moving roles, with the pandemic, Brexit and strong demand also attributed to candidate shortages.

The latest RBS jobs data highlighted a survey-record upturn in demand for both permanent and short term-staff, though candidate availability dropped steeply again.

As a result, upward pressure on pay intensified last month. Permanent starters’ salaries and temp pay both increased rapidly, with the rates of inflation the quickest seen since the survey began in 2003.

Sebastian Burnside, chief economist at Royal Bank of Scotland, said: “August data pointed to a notable acceleration in hiring activity across Scotland, as the labour market continued to rebound following the loosening of Covid-19 restrictions. Temp billings and permanent placements rose at unprecedented rates, as businesses continued to ramp up their hiring plans.

“Staff shortages were again widely reported by panellists, with the supply of candidates falling rapidly again. At the same time, vacancies expanded at the quickest rates ever seen, while pay for both permanent and short-term staff also hit fresh survey peaks.

“This mismatch between demand and supply is likely to pose further challenges in the coming months, but for now, the Scottish labour market is full-steam ahead.”

The number of permanent staff appointments across Scotland increased for the eighth month running during August. Anecdotal evidence linked the upturn with the easing of restrictions and strong demand for staff, RBS noted.

Permanent placements also rose at a UK level in August. The rate of increase at the national level was the strongest on record and slightly faster than in Scotland.

A ninth successive monthly increase in salaries awarded to permanent new joiners across Scotland was recorded in August. Shortages of staff were placing upwards pressure on pay, according to panellists. The rate of inflation was by far the quickest on record.

Average hourly pay for short-term staff across Scotland rose at a “sharp and accelerated” pace during August, and one that was the quickest on record.

Demand for permanent candidates strengthened to a degree unseen in the survey’s 18-year history, with the rate of increase outstripping that seen at the UK level.

The IT and computing category registered the strongest rise in permanent vacancies across the monitored sectors, followed by engineering and construction.

Demand for temporary staff in Scotland rose for the 11th month in a row during August. The rate of increase accelerated to a fresh survey record and one that was rapid overall, with the rise also outpacing that seen across the UK as a whole.

Each of the monitored sectors recorded a stronger upturn in temp vacancies during August. Blue collar again saw the fastest overall increase, followed by the hotel amd catering sector.

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