Scotland's economy: salaries jump on rising demand for staff

Permanent and temporary staff appointments in Scotland experienced a 'steep increase' in July, with salary growth touching a ten-month high at the beginning of the third quarter, a new report shows today.

The Recruitment & Employment Confederation said permanent job placements were 'rising rapidly' in Scotland. Picture: John Devlin
The Recruitment & Employment Confederation said permanent job placements were 'rising rapidly' in Scotland. Picture: John Devlin

However, the positive data in the IHS Markit Report on Jobs came as Recruitment & Employment Confederation (REC) chief executive Kevin Green warned that employers are “struggling” as European Union workers leave in the wake of last summer’s Brexit vote.

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The survey of about 100 recruitment and employment agencies across Scotland found that the lift in the demand for staff was spearheaded by vacancies in the IT and computing sector, but both were behind the rate of growth for the UK overall.

The number of workers placed in permanent jobs rose again but at a marginally slower rate than the previous month and lower the UK as a whole. Staff availability in Scotland fell in July with permanent staff declining at a steeper rate than temporary and contract workers.

One in five recruiters reported an increase in hourly pay rates for temporary and contract staff, while none reported a fall.

Green said: “Although slightly below the rest of the UK, permanent placements are rising rapidly in Scotland. Starting salaries are also increasing, so for workers who want to boost their earnings, now is a good time to consider moving job.”

However, Green gave warning that although placements were rising rapidly in Scotland demand still remained at a multi-year high.

“It’s clear that employers are having to work even harder to fill jobs as vacancies rise and candidate availability shrinks. UK employment remains at an all-time high and looks set to keep improving,” he said.

“The parts of the economy most reliant on European workers are under even more pressure as many EU workers return home.”

The REC chief added that “employers are not just struggling to hire the brightest and the best but also people to fill roles such as chefs, drivers and warehouse workers”.

He added: “We can’t ignore the importance of our relationship with the EU to employers. If we want to keep our jobs market successful and vibrant, we must make it easier, not harder, for employers to access the people they need”.