Hiring activity across Scotland fell again in February — amid shortages of suitably-skilled candidates and a fall in permanent staff availability — according to the latest Royal Bank of Scotland Report on Jobs survey, compiled by S&P Global.
However, pay increased for permanent new job market joiners across Scotland during February — as has been the case in each month since December 2020.
“The rate of salary inflation quickened to the fastest since November, after having softened to a near three-year low in January,” said the report.
“The rise in salaries was widely attributed to shortages of suitably-skilled candidates.
“For the first time since November, the rate of salary inflation across Scotland was stronger than that seen for the UK as a whole.”
The February data revealed a third consecutive monthly fall in permanent staff appointments across Scotland.
The rate of contraction quickened from January to the sharpest in 15 months. Anecdotal evidence generally linked the latest decline to fewer vacancies.
The latest data showed a fall in permanent staff availability across Scotland, thereby extending the current run of decrease which began in February 2021. The latest reduction was due to a lack of suitably-skilled workers and economic uncertainty, making people more hesitant to seek out new roles.
The report continued: “Recruiters reported falls in both permanent staff appointments and temporary billings.
“However, trends diverged as permanent placements fell at the quickest pace in 15 months, while the downturn in temp billings moderated since January.
“According to anecdotal evidence, economic uncertainty and subdued demand for staff had weighed on hiring decisions.
“Demand weakness was highlighted by marked falls in both permanent and temporary vacancies during February. However, pay pressures persisted amid competition for suitably-skilled workers.”
Sebastian Burnside, Chief Economist at Royal Bank of Scotland, said: “The latest recruitment survey continues to highlight reduced hiring activity across Scotland amid a backdrop of lingering economic uncertainty.
“While lower confidence meant that employers remain wary of taking on additional staff, there were also reports that shortages of suitably-skilled workers had impacted recruiters abilities to fill roles.
“At the same time, candidates were cautious to seek new opportunities, instead favouring security in their current roles or pausing their job search.
“With vacancies continuing to fall, this suggests that we could see a further deterioration in hiring conditions across Scotland in the months to come.
“However, starting pay for both permanent new joiners and temp workers continued to increase at marked rates, suggesting that while overall hiring activity is down, for the right skillset employers are willing to raise their offers.”