Sebastian Burnside

Further marked increases in both permanent placements and temp billings were signalled by recruiters, with the rates of growth remaining close to their respective series records, despite easing since August.

Demand for workers remained strong, as growth of vacancies for both permanent and temporary staff continued to rise rapidly. At the same time, the availability of candidates plummeted again. As a result, pay pressures intensified, with the rate of starters’ salary inflation hitting a fresh survey record.

Recruiters across Scotland reported a further increase in the number of permanent staff appointments during September, amid reports of strong demand for staff as companies were continuing to step up hiring efforts. The rate of expansion slowed from August’s peak, but was nonetheless the third-fastest on record and rapid.

A similar trend was observed for the UK as a whole in September, where the rate of increase in permanent placements also slowed, but growth remained slightly faster than in Scotland.

September data pointed to another steep upturn in temporary billings across Scotland, extending the current sequence of expansion to just over a year.

The rate of increase was the second-quickest recorded since the survey began in 2003, easing only slightly from August’s all-time high. Respondents attributed the latest upturn to strong demand conditions.

The UK as a whole also registered a sustained uplift in temporary billings in September. The rate of increase in Scotland continued to outpace that seen across the UK by a sizeable margin, however.

September data highlighted a sustained decrease in the availability of permanent candidates across Scotland, extending the current sequence of reduction which began in February. Moreover, the rate of decline accelerated on the month and was the second-fastest on record, behind only August 2014. Respondents attributed the latest fall to Brexit and lingering uncertainty among candidates with regards to switching roles amid the ongoing pandemic.

Scotland registered a slower drop in permanent candidate supply than the UK as a whole during September, however.

For the seventh time in as many months, the supply of temporary candidates across Scotland decreased in September. COVID-19, a shift among some candidates to permanent roles and Brexit were all cited by panellists as reasons for the latest fall. The rate of decline in temp candidate availability slowed from August’s survey record, but was still marked overall.

Scottish recruiters signalled a further steep increase in salaries awarded to permanent new joiners during September, stretching the current sequence of rising pay which began last December. Notably, the rate of inflation accelerated to a fresh survey record. According to respondents, skill shortages had led firms to raise their salary offerings in order to attract candidates.

The UK as a whole also recorded an unprecedented rise in starters’ salaries during September, with the rate of increase slightly faster than in Scotland.

September data highlighted a further increase in average hourly pay rates for short-term staff in Scotland, extending the current sequence of inflation to ten months. Anecdotal evidence attributed the latest rise to candidate shortages. The rate of increase slowed noticeably from August’s all-time high, but was the second-fastest since the series began in 2003 and rapid overall.

An eighth successive monthly upturn in the number of permanent vacancies across Scotland was recorded in September. Moreover, the rate of increase eased only slightly from August’s record high and was the second-steepest ever seen. The upturn was also stronger than that seen at the national level.

Recruiters across Scotland registered a further rise in temporary vacancies during September, extending the current sequence of vacancy growth to a year. The rate of increase eased only slightly from August’s series record, and was rapid overall. Additionally, temp vacancy growth in Scotland remained much faster than at the UK level by a wide margin.

Sebastian Burnside, chief economist at RBS, commented: “Scotland saw a further rapid uplift in hiring activity during September, with the rates of increase in both permanent placements and temp billings easing only slightly from the all-time records seen in August. This rounded off a third quarter of unprecedented hiring activity as the Scottish labour market continues to rebound.

“Meanwhile, vacancies for both short-term and permanent staff rose at near-record rates during September, but recruiters widely reported skills shortages as the supply of candidates continued to plummet. These shortages are likely to become more pronounced over the coming months and may pose some significant challenges for companies seeking to fill roles and expand their operations.”