In the three months leading up to the end of March 2022, unemployment in Scotland fell to a three-year low. According to official figures from the Office for National Statistics, published yesterday, unemployed in Scotland dropped 3.2% – a slight improvement of 0.9 percentage points from the final months of 2021.
Even though the health of the employment market in the country is far from perfect, there are some positives. The number of payroll employees is significantly higher than pre-pandemic levels. Across the UK, there were 530,000 more than February 2020. There has also been a reduction in redundancies across the country, again below pre-pandemic levels.
However, there remains worry surrounding the total weekly hours work which increased on the quarter but are still below pre-pandemic levels. Annual growth in national weekly earnings were seen, of 4.2% (without bonus) and 7% (including bonus).
To give a more realistic insight, real earnings (factoring in inflation) showed growth in ‘total pay’ of 1.4% (with bonus) and ‘regular pay’ (without bonus) fell across the year at –1.2%.
Inflation continues to be the main contributor to change and anxieties within our current economy. The last 12 months to March 2022, rose by 6.2% (up from 5.5% in February). Across the country, people are trying to make small savings wherever possible with the increasing living costs by cutting back on major purchases and reducing travel due to higher fuel prices.
This mass worry about inflation and the future of the economy is having an inevitable effect on consumer behaviour which in turn, is increasing the chance of another recession. The public are quickly losing confidence in the strength of the economy which is greatly impacting businesses everywhere.
This has taken its toll on the job market, and we have noticed the decrease in the demand for hiring. In the year-to-date, we have seen 16% more job openings (28,000) than the previous year, however, we saw a dip in demand in April 2022.
The number of jobs advertised was down 14% on the previous month and 26% on April 2021. Sectors that traditionally begin recruitment for the summer season are uncommonly quiet. Companies holding off to see what comes of the inflation knock-back can be completely understood and empathised with.
Writing in yesterday’s Herald, s1jobs Managing Director, Gavin Mochan, said: “We are now walking a thin line between growth and recession. Does the Bank of England increase interest rates to curb inflation and risk a recession, or does it leave rates and hope the strong demand for staff raises wages? The evidence would suggest the latter is not likely. More than 70% of businesses that are finding it difficult to recruit in Scotland cite low application numbers as the biggest problem.”
This conundrum shows the importance candidate mobility has on the health of the labour market and economy. While organic wage growth is not outpacing inflation, external wage growth is on offer, provided you are willing to move to get it. Employers are using sign-on bonuses, more attractive rewards, and benefits alongside higher wages.
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You can read the full analysis by s1jobs on the Herald website.