GROWTH in permanent staff hires in Scotland slowed in June to the weakest pace since February last year amid labour shortages, but remained sharp by historical standards, a survey of recruitment and employment consultancies reveals.
Royal Bank of Scotland’s latest report on jobs also shows a further sharp fall in staff availability in June, with ongoing skill shortages, a competitive labour market and Brexit all linked to the latest decrease. Demand for workers rose at a reduced, but still marked, pace, with vacancy growth moderating for a second month running. Against this backdrop, both starting salaries for permanent staff and pay for temporary workers rose sharply.
Labour shortages were also apparent across the UK in June, Royal Bank noted, although the drop in availability of permanent staff was more severe in Scotland.
Starting salaries for permanent staff across Scotland rose for a 19th straight month in June, and the rate of increase was the fastest since March when, Royal Bank noted, pay inflation “hit a record high”. The pace of increase in starting salaries in Scotland was faster than that in the UK as a whole.
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The bank said: “The surge in pay reflected ongoing candidate and skills shortages amid greater demand for staff, which all placed upward pressure on pay.”
Recruiters noted an acceleration of growth in average hourly wages to the fastest pace in eight months, as companies moved to attract workers amid skills shortages.
Scottish recruitment agencies indicated a 22nd consecutive monthly rise in billings for temporary staff during June.
The pace of increase accelerated from May, when the rise was the weakest in four months, to signal strong growth overall.
Sebastian Burnside, chief economist at Royal Bank, said: “For the second month running we have seen a slowdown in permanent staff hiring across Scotland in June. While the latest upturn was only slightly softer than that seen in May, it was nonetheless the weakest increase in permanent staff appointments since February 2021. However, temp billings grew at an accelerated rate during June.
“June data also highlighted that demand for labour increased strongly, though rates of vacancy growth did ease compared to May. As a result, increases in starting pay remained sharp, with both salaries and wages rising at a faster rate than compared to the preceding month.”
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