Sebastian Burnside,
chief economist at RBS

The report found that although rates of contraction did ease from May, they remained marked and among the quickest in the survey’s history. At the same time, demand for staff continued to fall substantially.

Reports of redundancies led to a sharp increase in candidate availability, which added further downward pressure on pay. Notably, starting salaries dropped at the quickest rate on record.

June data highlighted another reduction in permanent placements across Scotland, extending the current sequence of decline to five months. The pace of contraction softened notably from May but remained rapid overall and quicker than the pre-coronavirus record. According to panellists, firms continued to postpone hiring decisions amid the COVID-19 pandemic.

By comparison, the fall in permanent placements at the UK level eased markedly since May and was slower than that recorded in Scotland.

Recruitment consultancies across Scotland recorded a seventh consecutive monthly reduction in temporary billings during June. Panellists frequently liked the reduction to the coronavirus pandemic and subsequent dip in demand for staff. The rate of decline eased to the slowest since February, but was nonetheless sharp overall.

Latest data highlighted the first rise in permanent candidate availability since February 2012 in June. Moreover, the rate of increase was the quickest since August 2009 and steep overall, with panellists commonly reporting COVID-19 induced redundancies.

Recruiters in Scotland signalled a further increase in the availability of temporary candidates during June, stretching the current sequence of expansion to three months. Anecdotal evidence linked the increase to a high number of employee layoffs and contract terminations, leaving candidates searching for work. Moreover, the latest uptick was the fastest for just over 11 years and substantial.

Recruitment consultancies across Scotland signalled a fall in salaries awarded to permanent new joiners in June, as has been the case in each month since April. The rate of decline was the quickest recorded since the series began in January 2003 and rapid overall.

June data highlighted a further reduction in average hourly pay for short-term staff across Scotland, extending the current sequence of decline to three months. Moreover, the rate of decline was the quickest since April 2009 and marked.

Scottish recruitment consultancies registered a drop in permanent vacancies in June, as has been the case in each of the past four months. The respective seasonally adjusted index posted well below the 50.0 no-change mark to signal a further rapid reduction, despite the rate of contraction easing since May. Notably, the figure remained below the pre-coronavirus low of 28.7 in February 2009.

Demand for temporary staff fell further during June, thereby extending the current sequence of contraction to four months. The rate of decline softened from May, but nonetheless remained marked and continued to outpace the pre-coronavirus record.

Sebastian Burnside, chief economist at RBS, said: “Labour market conditions in Scotland remained weak during June, with the latest Report on Jobs data highlighting further marked reductions in both permanent placements and temporary billings. That said, the rates of decline did soften slightly as parts of the economy look to reopen as a result of easing lockdown restrictions.

“Meanwhile, vacancies continued to decline substantially, with the falls in both permanent and temporary vacancies surpassing their respective pre-coronavirus records despite softening from May. As demand for candidates dropped again, starting pay came under further pressure, with starting salaries declining at the sharpest rate in over 17 years of data collection.

“Overall the short-term outlook for the Scottish labour market remains extremely challenging with the biggest uncertainty being firms’ responses to the closure of the furlough scheme.”

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