RBS and ONS figures highlight recruitment crisis


The jobs crisis is escalating particularly in Scotland according to the latest Royal Bank of Scotland report on jobs.  Hiring activity across Scotland continued to surge in September, according to the Report, however, the supply of permanent candidates plummeted and salary inflation hit a record.

The report was published just ahead of the latest ONS figures for the UK which show the number of job vacancies in July to September 2021 was a record high of 1,102,000, an increase of 318,000 from its pre-pandemic (January to March 2020) level; this was the second consecutive month that the three-month average has risen over one million.  This equates to 110,000 in Scotland.

The RBS Report, only ratifies what the Scottish hospitality industry has been shouting about – a lack of candidates for jobs. The report showed that the demand for workers remained strong, as growth of vacancies for both permanent and temporary staff continued to rise rapidly. At the same time, the availability of candidates plummeted again. As a result, pay pressures intensified, with the rate of starters’ salary inflation hitting a fresh survey record.

Recruiters across Scotland reported a further increase in the number of permanent staff appointments during September, amid reports of strong demand for staff as companies were continuing to step up hiring efforts. The rate of expansion slowed from August’s peak, but was nonetheless the third-fastest on record and rapid. While the UK as a whole registered a sustained uplift in temporary billings in September, the rate of increase in Scotland continued to outpace that seen across the UK by a sizeable margin.

The supply of permanent candidates plummeted at near-record pace. Moreover, the rate of decline accelerated and was the second-fastest on record, behind only August 2014. Respondents attributed the latest fall to Brexit and lingering uncertainty among candidates with regards to switching roles amid the ongoing pandemic.

The rate of starting salary inflation also hit a series record.  Scottish recruiters signalled a further steep increase in salaries awarded to permanent new joiners during September, stretching the current sequence of rising pay which began last December. Notably, the rate of inflation accelerated to a fresh survey record. According to respondents, skill shortages had led firms to raise their salary offerings in order to attract candidates.

September data highlighted a further increase in average hourly pay rates for short-term staff in Scotland, extending the current sequence of inflation to ten months. Anecdotal evidence attributed the latest rise to candidate shortages. The rate of increase slowed noticeably from August’s all-time high, but was the second-fastest since the series began in 2003 and rapid overall. Additionally, temp vacancy growth in Scotland remained much faster than at the UK level by a wide margin.

Sebastian Burnside, Chief Economist at Royal Bank of Scotland, commented, “Scotland saw a further rapid uplift in hiring activity during September, with the rates of increase in both permanent placements and temp billings easing only slightly from the all-time records seen in August. This rounded off a third quarter of unprecedented hiring activity as the Scottish labour market continues to rebound.

“Meanwhile, vacancies for both short-term and permanent staff rose at near-record rates during September, but recruiters widely reported skills shortages as the supply of candidates continued to plummet. These shortages are likely to become more pronounced over the coming months and may pose some significant challenges for companies seeking to fill roles and expand their operations.”


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