Scots job market improved sharply in August

The latest IHS Markit report on jobs data for Scotland signalled a further improvement in labour market conditions in August.

Recruitment consultancies reported sharp increases in permanent placements and staff demand, while pay pressures remained “marked.”

At the same time, candidate availability continued to deteriorate sharply in August.

The latest survey signalled the second-steepest drop in permanent candidate supply since May 2015.

The number of permanent job vacancies in Scotland increased again in August.

Growth of permanent staff demand picked up slightly since July, and remained much stronger than the long-run average.

Demand for temporary staff in Scotland also remained elevated in August.

“August survey data showed a sharp rise in the number of people placed into permanent jobs in Scotland,” said the report.

“The rate of expansion accelerated slightly since July, but remained below that recorded for the UK as a whole.”

In contrast, though, growth in billings received by consultancies from the employment of temporary staff eased to a seven-month low in August.

However, the rate of expansion matched the series’ long-run average and remained sharp overall.

Recruitment & Employment Confederation chief executive Kevin Green said: “As this month’s report clearly shows, employers are increasingly turning to recruitment agencies as it becomes harder to find the people to fill the jobs available.

“There are two trends at play. Businesses are seeking more professional and managerial capability, so we’re seeing high demand for roles like financial directors, analysts, and compliance and HR professionals.

“Meanwhile, there is a significant shortage of people to fill blue collar roles such as drivers, electricians, and construction workers, and this is being exacerbated by a fall in net migration from the EU.

“In many areas of the jobs market candidate supply cannot meet demand. Employers are having to offer more money to secure the people with the skills they need.

“While the working population in general has experienced a pay squeeze, there are clearly opportunities now to earn more by moving jobs.

“This is good news for individuals, but businesses will be concerned about the sustainability of this trend.

“Businesses can only grow if they have access to the people and skills they need.

“It is essential that the government recognises this by developing an evidence-based immigration system that will support the economy.”