By Kristy Dorsey

There was a mild improvement in hiring activity across Scotland during January, with permanent job placements up for the first time in a year and temporary billings increasing for the fifth straight month.

According to today's Report on Jobs from the Royal Bank of Scotland, this gentle improvement was accompanied by further increases in starting pay. However, the number of people looking for both permanent and temporary work rose sharply as Covid-related layoffs boosted the ranks of job seekers.

“Although conditions seem to be improving, the labour market is not out of the woods yet, with plenty of lost ground to make up,” the bank’s chief economist, Sebastian Burnside, said. “Nonetheless, tentative steps towards a recovery, despite stricter lockdown measures, is welcome news.”

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The increase in permanent appointments was driven by the IT and computing sector, ending an 11-month sequence of declines. The increase in temporary billings was described as strong, though not so much as in the final month of 2020.

The bank noted that the rise in permanent placements in Scotland contrasted with the UK trend, with a renewed downturn at national level.

The Scottish recruiters surveyed reported that though the increase in people looking for full-time employment was substantial, it was the slowest in the current eight-month sequence of rising candidate availability. The availability of temporary candidates rose for the 10th month in a row.

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Salaries awarded to new permanent staff rose for the second month in a row, with the back-to-back rise ending an eight month span of falling pay that began in April. However, the rate of inflation slowed from December and remained subdued compared to historical data.

Average hourly pay rates for short-term staff in Scotland rose “solidly” in January, though at a slower pace than in December. Demand for temporary staff increased for the fourth month in a row.

Mr Burnside described it as a “good performance”, adding: “The rates of increase were only mild, but still pointed to a solid improvement from the substantial reductions seen during the spring of 2020.”