finance

Scottish hiring activity surges again in May



The Scottish labour market saw a further rapid increase in hiring activity midway through the second quarter, according to the Royal Bank of Scotland.

Permanent placements increased at the fastest pace on record, while the latest upturn in temp billings was the most marked since June 2007, with panellists noting that looser Covid-19 restrictions and the reopening of some sectors boosted recruitment.

The Report on Jobs , compiled by IHS Markit, is based on a monthly survey of around 100 recruitment and employment consultants.

Demand for both permanent and short-term staff rose at unprecedented rates during May, but candidate availability deteriorated sharply. Subsequently, pay pressures strengthened during May.

Permanent salaries rose at the fastest pace since December 2014, while the rate of temp wage inflation was the strongest for over four years.

The number of permanent staff appointments in Scotland rose further during May, extending the current sequence of increase to five months.

Looser lockdown restrictions and strong demand for candidates drove the rise, according to respondents. The latest upturn in permanent hiring was the fastest since data collection began in January 2003 and marked.

The UK also saw a series record rate of increase in permanent placements during May, albeit one that was not as steep as that seen in Scotland.

A ninth straight monthly upturn in temporary billings across Scotland was recorded during May. Panellists attributed the latest rise to increased demand for staff due to the easing of pandemic-related restrictions in most areas.

As was the case for permanent staff, Scotland registered a quicker increase in temp billings than the UK as a whole.

May data highlighted another fall in the supply of permanent staff across Scotland, amid reports that candidates were reluctant to switch roles due to the pandemic.

Recruiters across Scotland signalled a further reduction in the availability of temporary candidates in May, extending the current sequence of decrease to three months.

RBS stated that anecdotal evidence linked the latest fall to increased demand for staff, as well as lingering pandemic-related uncertainty and the government furlough scheme.

Salaries awarded to permanent new joiners in Scotland rose further in May, with panel members frequently commenting that stronger competition for candidates had placed upwards pressure on salaries.

For the seventh time in eight months, average hourly pay rates for short-term staff across Scotland rose during May. Panellists often attributed the latest increase to strong demand for staff and reduced candidate numbers.

Recruiters across Scotland signalled a further marked rise in demand for permanent staff during May, with the rate of increase quickening to a fresh series record.

Permanent vacancies also rose steeply at the UK level in May, although the rate of increase was slower than in Scotland.

May data highlighted an eighth successive monthly upturn in the number of temporary vacancies across Scotland. The rate of increase was the quickest on record and marked overall, with Scotland also registering a steeper rise than the UK as a whole.

Sebastian Burnside, chief economist at RBS, commented: “May data pointed to a further steep increase in hiring activity across Scotland as the easing of lockdown measures and subsequent reopening of sectors spurred on the economy and boosted demand for staff.

“Further positive signs came from staff demand indices, which showed the strongest upturns in temp and permanent vacancies on record.

“Staff supply fell too, however, as lingering pandemic-related uncertainty left many candidates wary of switching roles,” he continued, adding: “Nonetheless, a stellar performance in May puts the labour market in good stead moving forward, with the further easing of restrictions likely to provide another boost.”

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