Hiring activity across Scotland fell for the second month in a row amid growing economic gloom and one of the sharpest declines in candidate availability on record.
The monthly jobs survey by the Royal Bank of Scotland found that although demand for staff softened in November, the number of unfilled permanent and temporary vacancies continued to rise as employers grapple with ongoing skills shortages. The imbalance led to further rises in both starting salaries and temporary pay.
Permanent placements fell sharply in November, reaching the fastest pace of decline since the initial phase of the Covid pandemic in June 2020. Temporary billings in Scotland also fell for the second month in a row, in contrast to a modest expansion across the UK as a whole.
READ MORE: Scottish labour market contracts amid cost of living crisis
As has been the case since February 2021 the supply of permanent staff in Scotland contracted during November. The rate of deterioration was the most severe since May and among the fastest on record.
Royal Bank chief economist Sebastian Burnside said the faltering economy and candidate shortages have taken their toll on hiring.
"At the same time, labour scarcity resulted in strong growth in pay, with both starting salaries and hourly wages rising at sharper rates during November," he added.
"The steeper drop in candidate availability across Scotland – which was often blamed on a generally low unemployment rate, fewer foreign workers, worries over the economic climate and cost of living crisis – is likely to add further upwards pressure on pay in the months ahead, particularly if firms want to attract and secure the skilled workers they need."
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Salaries awarded to new permanent staff in Scotland rose for the 24th month in a row, and at a sharper pace than recorded at UK level. The rate of permanent pay inflation was up from a 16-month low in October.
Average hourly wages in Scotland increased as well, stretching the current sequence of inflation to two years. The rate of pay growth accelerated from October’s 18-month low.
The number of permanent vacancies across Scotland rose for the 23rd month in a row, though the rate of increase weakened to the second-slowest since February 2021.
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