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. Indeed, 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. Moreover, 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. The rate of increase gathered notably on the month and was the steepest for nearly fourteen years.

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 Covid-19 pandemic. The latest reduction in candidate availability was the quickest since March 2020 and sharp.

That said, the decrease in Scotland was much slower than that seen at the UK level during May.

Recruiters across Scotland signalled a further reduction in the availability of temporary candidates in May, extending the current sequence of decrease to three months. Anecdotal evidence linked the latest fall to increased demand for staff, as well as lingering pandemic-related uncertainty and the government furlough scheme. The rate of decline was the fastest seen since January last year and marked, albeit not as severe as the UK-wide trend.

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. Notably, the latest increase was the fastest since December 2014 and rapid overall.

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. The rate of inflation was the steepest since April 2017 and marked, and notably quicker than the UK average.

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. Moreover, 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. A record rise in permanent placements and the steepest increase in temp billings since 2007 shows that the labour market is recovering well from the COVID-19 induced downturn last year.

“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. 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.”