Permanent staff appointments across Scotland rose at a faster pace during April, according to the latest Royal Bank of Scotland Report on Jobs.
07 May 2021
The rate of increase was the fastest since July 2014 and the second-strongest on record, amid reports of surging demand for staff due to more favourable economic conditions. Meanwhile, temp billings also rose at the start of the second quarter. The upturn softened from March, but was still solid overall. Stronger demand for staff was also reflected in the number of vacancies, which continued to surge, but recruiters signalled further reductions in the availability of candidates.
Fastest rise in permanent staff appointments since July 2014
A fourth straight monthly rise in permanent placements across Scotland was recorded during April. Moreover, the rate of increase quickened sharply to the second-strongest on record, with only July 2014 seeing a more marked upturn. Panellists attributed the increase to greater demand for staff amid increased economic activity.
The UK also saw near record growth of permanent appointments in March, although the upturn in Scotland was faster than that seen at the national level.
April data highlighted another uptick in temp billings across Scotland, extending the current sequence of increase to eight months. The latest rise was the slowest since January, but solid nonetheless. The upturn was generally linked by recruiters to firmer demand for staff in April.
Permanent candidate availability drops at quickest rate for 13 months
For the third month in a row, Scottish recruiters registered a decrease in the availability of permanent candidates during April. Respondents noted that job seekers remained uncertain of switching roles due to the pandemic. Notably, the latest fall in permanent staff supply was the most marked since March 2020.
The trend in Scotland mirrored that seen at the UK level, which saw a steeper fall in permanent availability during April, albeit one that was slightly slower than in Scotland.
The supply of temporary staff across Scotland fell further during April. The respective seasonally adjusted index was unchanged on March's reading and signalled a modest decline in temp candidate availability overall. At the UK level, the availability of short-term staff contracted at the sharpest rate for over two years.
Starting salaries rise markedly again in April
April data highlighted a further steep rise in average salaries awarded to permanent new joiners across Scotland. According to panellists, a low supply of candidates had pushed up pay rates. Despite slowing slightly from March, the rate of salary inflation was nonetheless the second-quickest since January 2019.
Meanwhile, inflationary pressures intensified across the UK, although the latest upturn in starting salaries remained slower than that seen in Scotland.
For the fifth successive month, short-term pay rates across Scotland rose during April amid reports that a shortage of candidates had led to further inflationary pressures. That said, the rate of wage inflation eased to the slowest in the aforementioned sequence and was only mild overall.
Across the UK as a whole, temp pay rates also rose in April, but the latest increase was much faster than that seen in Scotland.
Record upturn in permanent vacancies during April
April data highlighted a third successive monthly increase in demand for permanent staff across Scotland. Moreover, the rate of growth was the most marked on record and broadly in line with the UK-wide trend.
Recruiters across Scotland recorded another rise in temporary vacancies during April, with the latest upturn the steepest since July 2017. The expansion was also quicker than that registered across the UK as a whole.
Sebastian Burnside, Chief Economist at Royal Bank of Scotland, commented: “The Scottish labour market continued to perform strongly into the second quarter of the year. Permanent appointments rose at the second-fastest rate since the survey began in 2003, while temp billings rose solidly, with anecdotal evidence noting that firms were upping their hiring activity due to better economic conditions.
“Further positive signs came from vacancies data, which highlighted further surges in demand for both short-term and permanent staff, a clear indication that companies across Scotland are stepping up hiring efforts in line with the easing of pandemic-related restrictions.
“The switch towards hiring permanent staff may also reflect improved confidence and a clearer outlook among Scottish firms. Overall, the data point to a sustained recovery of the labour market, as businesses anticipate a return to more normal business conditions over the summer.”