Scots salaries soar amid acute candidate shortage

The latest Royal Bank of Scotland Report on Jobs survey from IHS Market shows that the start of the second quarter saw a “further marked increase in hiring activity” across Scotland.

The report said “acute” shortages of candidates and skills meant rates of starting pay “continued to increase substantially.”

Recruitment consultancies across Scotland noted a 16th successive monthly increase in permanent staff appointments during April.

“Recruiters also noted that candidate availability fell more sharply, while demand for staff surged higher during the latest survey period,” said the report.

“Consequently, there was further upwards pressure on rates of pay, with both starting salaries and wages increasing rapidly.”

That said, the seasonally adjusted Permanent Placements Index slid from 71.7 in March to 65.0 in April, to signal the softest increase in permanent staff appointments in the year to date.

In contrast, temp billings expanded at the quickest rate since last September.

The April data signalled a steep rise in permanent starting salaries across Scotland.

Panellists consulted said that businesses were more willing to increase starting pay for necessary skills amidst “a very competitive job market and candidate shortages.”

Despite easing from the survey record seen in March, the rate of starting salary inflation remained one of the fastest seen since data collection began in 2003.

“Recruiters across Scotland reported a substantial fall in the availability of permanent candidates during April,” said the report.

“The decline extended the current sequence of contraction to 15 months, with the latest drop the quickest in the year to date.

“Survey respondents often blamed ongoing skills shortages and a reluctance among workers to switch roles due to the pandemic for the latest decline …

“As has been the case for the last 14 months, temporary candidate availability dropped during April.

“The rate of decline quickened from March and was sharp overall.

“Increased demand for staff and fewer foreign workers were attributed to the latest fall in temporary staff supply.”

The April data indicated a further increase in permanent vacancies across Scotland.

Moreover, the rate of increase was steeper than that seen across the UK as a whole.

At sector level, IT and computing recorded the fastest expansion in vacancies, followed closely by engineering and construction.

Sebastian Burnside, Chief Economist at Royal Bank of Scotland, said: “April data signalled a further steep rise in hiring activity across the Scottish labour market, marking the sixteenth consecutive month in which permanent staff appointments have increased.

“Though the latest upturn was a fair bit slower than those seen earlier this year, it indicated a further strong recovery as pandemic-related pressures continued to subside.

“Recruiters also saw growing demand for staff, with both permanent and temporary vacancies expanding at quicker rates than in March, despite reports of difficulties filling roles.

“Panellists noted acute skills shortages, with the supply of workers shrinking at a much faster pace than in the previous survey period.

“Subsequently, rates of starting pay continued to increase substantially.”