Both permanent placements and temp billings increased at the most marked rates in the survey's history, amid reports that firms were stepping up hiring efforts due to the easing of COVID-19 restrictions. August data also highlighted a survey-record upturn in demand for both permanent and short term-staff, but candidate availability dropped steeply again. According to panellists, some people were still wary of moving roles, with COVID-19, Brexit and strong demand also attributed to candidate shortages. Subsequently, upwards pressure on pay intensified in August. Permanent starters’ salaries and temp pay both increased rapidly, with the rates of inflation the quickest seen since the survey began in 2003.

Record rate of increase in permanent placements

The number of permanent staff appointments across Scotland increased for the eighth month running during August, with the rate of expansion the quickest seen since the survey began in January 2003. Anecdotal evidence linked the upturn with the easing of COVID-19 restrictions and strong demand for staff.

Permanent placements also rose at the UK level in August. The rate of increase at the national level was the strongest on record and slightly faster than in Scotland.

August data highlighted a further rise in temp billings across Scotland, extending the current sequence of increase to a year. Strong demand for staff amid the easing of lockdown measures drove the latest upturn, according to panellists. Furthermore, the rate of increase quickened to a record high and was rapid overall, outstripping the UK average by a sizeable margin.

Quickest fall in permanent candidate availability for seven years

Recruiters across Scotland signalled a further reduction in the supply of permanent candidates during August, extending the current sequence of deterioration to seven months. Uncertainty and a subsequent reluctance to seek new roles, COVID, Brexit and strong demand for staff were all cited by panellists as drivers of the latest decline. Notably, the rate of decrease in permanent candidate availability was the strongest for seven years and the second-fastest on record.

As has been the case in each month since March, the availability of temporary candidates across Scotland declined during August. Strong demand for staff meant that shortages were becoming more pronounced, according to anecdotal evidence. The rate of reduction in temp candidate supply was the quickest on record and rapid overall.

Unprecedented rise in permanent starters' salaries

A ninth successive monthly increase in salaries awarded to permanent new joiners across Scotland was recorded in August. Shortages of staff were placing upwards pressure on pay, according to panellists. Moreover, the rate of inflation was by far the quickest on record and marked overall.

Average hourly pay for short-term staff across Scotland rose at a sharp and accelerated pace during August, and one that was the quickest on record. Panellists attributed the latest increase in temp pay to supply and demand pressures and IR35 regulations.

Temporary wages across Scotland have now risen in each month since last December.

Steep upturn in demand for permanent staff

August data pointed to another monthly increase in the number of permanent vacancies across Scotland, extending the current sequence of expansion to seven months. Notably, demand for permanent candidates strengthened to a degree unseen in the surveys near 19-year history, with the rate of increase also outstripping that seen at the UK level.

IT & Computing registered the strongest rise in permanent vacancies across the monitored sectors, followed by Engineering & Construction. 

Demand for temporary staff in Scotland rose for the eleventh month in a row during August. Moreover, the rate of increase accelerated to a fresh survey record and one that was rapid overall, with the rise also outpacing that seen across the UK as a whole.

Each of the monitored sectors recorded a stronger upturn in temp vacancies during August. Blue Collar again saw the fastest overall increase, followed by Hotel & Catering.

Sebastian Burnside, Chief Economist at Royal Bank of Scotland, commented:

“August data pointed to a notable acceleration in hiring activity across Scotland, as the labour market continued to rebound following the loosening of COVID-19 restrictions. Temp billings and permanent placements rose at unprecedented rates, as businesses continued to ramp up their hiring plans. 

“Staff shortages were again widely reported by panellists, with the supply of candidates falling rapidly again. At the same time, vacancies expanded at the quickest rates ever seen, while pay for both permanent and short-term staff also hit fresh survey peaks. This mismatch between demand and supply is likely to pose further challenges in the coming months, but for now, the Scottish labour market is full-steam ahead.”

Download the August Royal Bank of Scotland Report on Jobs (PDF 429KB)

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