Expansion in Scots job placements as salaries soar

The latest Royal Bank of Scotland Report on Jobs reveals a fresh expansion in permanent job placements across Scotland in July — with the rate of increase the fastest in 13 months.

The upturn marked the first rise since January amid reports of improved confidence at clients and business expansion plans.

Rates of starting salary and temp wage inflation were sharp in July, with recruiters reporting that competition for scarce and skilled candidates had pushed up pay.

The availability of candidates to fill permanent positions across Scotland deteriorated sharply during July, stretching the current run of reduction in candidates to two-and-a-half years.

“The rate of decrease (in candidates) was the most pronounced in four months amid reports that people were more hesitant to seek new roles,”said the report.

“In contrast, candidate availability expanded at an accelerated and rapid pace at the UK level.

“The availability of temporary staff in Scotland fell in July for the twenty-ninth successive month. Recruiters linked the drop to more people looking to stay in their current roles due to concerns over the outlook, as well as a general lack of suitably-skilled candidates …

“Competition for scarce and skilled workers was said to have driven up salaries.

“Moreover, the rate of increase in salaries offered to permanent new joiners across Scotland was sharper than the UK-wide average.

“Latest survey data highlighted greater wage pressures across Scotland for short-term workers.

“Moreover, the rate of temp pay growth picked up from June’s 31-month low and was sharp overall. Efforts to attract and secure suitably-skilled staff was commonly attributed to the latest uptick in hourly pay rates.

“The upturn in wages across Scotland outpaced that recorded for the UK as a whole.”

Sebastian Burnside, Chief Economist at Royal Bank of Scotland, said: “While the fresh expansion in permanent placements signals a positive sign for Scottish labour market conditions at the start of the second half of the year, the continued slowdown in the growth of vacancies does warrant some caution.

“Nonetheless, the rise in new permanent hires, following five consecutive months of decline, highlighted the return of confidence across businesses and the successful filling of long-standing vacancies amid the ongoing deterioration in staff availability.

“In terms of salary and wage inflation, growth rates were sharp. The historically strong increases in starting pay were often linked to a lack of suitable candidates, therefore businesses were keen to offer higher pay to secure talent.”