By Kristy Dorsey

Permanent placements and temporary billings continued to fall across Scotland during August, with a spike in those looking for work putting further downward pressure on wages.

Newest findings from the Royal Bank Scottish Jobs Report show that permanent staff appointments declined at the slowest rate since February, while the latest reduction in temp billings was only “marginal” and was the softest since December 2019. The permanent placements index rose from 40.9 in July to 45.6 – but still below the neutral 50.0 divide between decline and growth – while temporary placements rose to 48.0 from 43.5 in July.

Staff availability continued to expand rapidly, driven by redundancies in response to the Covid-19 crisis. Combined with muted demand, starting rates of pay fell further for both permanent and temporary workers.

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“Overall, the data is encouraging in the context of the unprecedented drops in hiring activity recorded in April through to June but the labour market is yet to begin its recovery, and may require further support measures in order to fully recover from the effects of the pandemic,” Royal Bank chief economist Sebastian Burnside said.

The availability of workers for permanent jobs shot up in August to 81.0, compared to 64.8 in July and 38.2 in March. That increase was the highest recorded since the height of the global financial crisis in April 2009.

The availability of temporary staff eased slightly between July and August, but at 85.5 was still nearly double that of 45.5 in March. As with permanent placements, panellists linked the substantial rise to widespread redundancies.

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Recruiters in Scotland reported further reductions in the average salaries awarded to permanent new joiners in August, extending the current sequence of decline that began in April. The latest fall in salaries was the softest in the current sequence, but remained marked overall.

A fifth consecutive monthly reduction in average hourly pay for short-term staff was recorded during August.

Looking at permanent vacancies by sector, IT and computing was the only industry in positive territory, though demand for engineering and construction staff was close to the neutral 50.0 mark. Demand was weakest in the secretarial and clerical, accounting and financial, and executive and professional categories.

Blue collar workers were in greatest demand for temporary roles, followed by the need for engineering and construction workers.