Hiring activity in Scotland declined markedly in August but competition for "scarce and skilled candidates" continued to drive up starting salaries and wages.
Today's latest Report on Jobs survey from the Royal Bank of Scotland shows a renewed fall in permanent placements with the rate of contraction the strongest since April. There was also an eleventh successive monthly reduction in temporary billings, with the rate of decrease the fastest since May.
The number of vacancies for permanent staff fell and those for short-term work stagnated amid weaker economic conditions and a shortage of skilled and desirable candidates. However, there was also a deterioration in the number of candidates available to fill both full-time and temporary roles.
READ MORE: Unemployment Scotland: jobless number up by 24,000 over three months
Sebastian Burnside, chief economist at Royal Bank of Scotland, said the survey suggests a weaker outlook for the Scottish labour market in the remaining months of 2023.
"A smaller pool of desirable and skilled candidates and the muted economic climate meant that hiring activity remained subdued during August, with both permanent placements and temp billings falling sharply," he said. "Moreover, fewer work opportunities translated into a reduction in permanent vacancies.
"Nonetheless, both starting salaries and wages continued to rise at historically strong rates. Competition for scarce and skilled candidates often meant that firms had to pay more to secure the right talent."
READ MORE: Surge in wages defies gloomy Scottish labour market
Salaries awarded to permanent new joiners in Scotland rose during August, extending the current sequence of pay growth that began in December 2020. The rate of salary inflation accelerated from July and was faster than the historical average.
Scotland recorded a stronger rate of growth in permanent salaries than the rest of the UK.
As has been the case in each of the last 33 months, average wages for short-term staff increased across Scotland during August. The pace of temp wage inflation quickened for the second successive month to a sharp rise that again was stronger than the UK-wide average.
Although the number of permanent vacancies in Scotland fell, the rate of contraction was modest overall. The steepest decline was in executive and professional vacancies, followed by hotels and catering.
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