Recruitment activity continues to increase, despite labor shortages


Recruiters across Scotland saw a further surge in hiring activity in March, according to the latest Royal Bank of Scotland Report on the work.

Panelists noted an acceleration in permanent placements and temporary billings, amid reports of greater market confidence and increased client activity.

However, the growing imbalance between the demand for personnel and the supply of labor has led to further sharp increases in starting salaries, with the latest increase in permanent starting salaries being the fastest on record.

Seasonally adjusted data Index of permanent placements reported a further increase in permanent staff appointments across Scotland in March.

The growth rate has accelerated slightly since February and was the second highest on record. Anecdotal evidence suggests that stronger market conditions and increased client demand drove the latest increase in permanent placements.

Notably, the growth rate exceeded the UK-wide average for the third consecutive month.

Recruiters across Scotland recorded a further increase in temporary billings in March, with the rate of growth gaining momentum, accelerating to a five-month high.

Recruiters said the latest expansion was supported by growing business activity at clients as Covid-19 disruptions eased.

The latest survey data indicated that the availability of permanent staff fell again in Scotland in March, continuing the current streak of reduction which began in February 2021.

Recruiters often commented on tight labor market conditions and acute skills shortages when explaining the latest fall. That said, the rate of decline in Scotland remained lower than that seen in the UK as a whole.

The supply of short-term staff across Scotland fell for the 13th consecutive month in March. Recruiters have blamed the latest drop in availability on a generally low unemployment rate and the reluctance of some workers to seek new jobs.

March data reported a 16th consecutive monthly increase in permanent starting salaries across Scotland. Additionally, the rate of increase was the fastest since the survey began in January 2003. Recruitment agencies have linked higher starting salaries to efforts to attract candidates amid labor shortages. – persistent work.

The rate of wage inflation across the UK also hit a new high in March, but remained slower than that seen in Scotland.

RBS also pointed to an increase in wages for temporary staff in Scotland in March as the rate of inflation accelerated to a three-month high. Anecdotal evidence suggests that short-term pay has increased as part of efforts to attract candidates.

Vacancies for permanent staff across Scotland rose for the 14th consecutive month in March, with the fastest rate of growth since last October.

By sector, engineering and construction saw the largest increase in permanent vacancies, followed closely by IT and information technology. These two sectors are also at the top of the ranking of temporary vacancies.

Recruitment consultancies have reported an 18th consecutive monthly increase in temporary vacancies across Scotland. The rate of expansion has been rapid, having peaked in three months, but has not been as rapid as seen across the UK as a whole.

Sebastian Burnside, Chief Economist at RBS, commented: “The latest survey data indicated a further marked improvement in labor market conditions in March, fueled by strong demand for staff.

“Furthermore, as the overall demand for staff continues to increase, the data suggests that there are likely to be further sharp increases in recruitment activity in the months ahead.

“However, ongoing labor shortages raise questions about the strength of future increases in permanent placements and temporary billings, as skill shortages limit companies’ ability to fill positions.

“Nevertheless, the competitive and tight labor market works in favor of job seekers, with wage inflation starting to hit a new high in March,” he added.

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