The Scottish labour market saw an unprecedented surge in hiring activity during August — with an “unprecedented rise in permanent starters’ salaries” — according to the latest Royal Bank of Scotland Report on Jobs.
The report said the Scottish job market is “full-steam ahead.”
The report, compiled by IHS Markit, is based on a monthly survey of around 100 recruitment and employment consultants, and provides up-to-date information on Scottish labour market trends and is seasonally adjusted.
“Both permanent placements and temp billings increased at the most marked rates in the survey’s history, amid reports that firms were stepping up hiring efforts due to the easing of COVID-19 restrictions,” said the report.
“August data also highlighted a survey-record upturn in demand for both permanent and short term- staff, but candidate availability dropped steeply again.
“According to panellists, some people were still wary of moving roles, with COVID-19, Brexit and strong demand also attributed to candidate shortages.
“Subsequently, upwards pressure on pay intensified in August.
“Permanent starters’ salaries and temp pay both increased rapidly, with the rates of inflation the quickest seen since the survey began in 2003.”
The number of permanent staff appointments across Scotland increased for the eighth month running during August, with the rate of expansion the quickest seen since the survey began in January 2003.
August data highlighted a further rise in temp billings across Scotland, extending the current sequence of increase to a year.
“Strong demand for staff amid the easing of lockdown measures drove the latest upturn, according to panellists,” said the report.
“Furthermore, the rate of increase quickened to a record high and was rapid overall, outstripping the UK average by a sizeable margin.”
The report highlighted an “unprecedented rise” in permanent starters’ salaries.
“A ninth successive monthly increase in salaries awarded to permanent new joiners across Scotland was recorded in August,” said the report.
“Shortages of staff were placing upwards pressure on pay, according to panellists.
“Moreover, the rate of inflation was by far the quickest on record and marked overall.
“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.
“Panellists attributed the latest increase in temp pay to supply and demand pressures and IR35 regulations.
“Temporary wages across Scotland have now risen in each month since last December.”
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.”