What’s good for jobseekers might be bad and worse for employers

20 November 2018

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Amid the uncertainty of Brexit, there's been some welcome good news for job seekers in Scotland, but some bad and potentially worse news for employers.

People looking for work will have been heartened by a Royal Bank of Scotland report that showed a continued rise in the availability of jobs throughout October.

Permanent and short-term vacancies rose sharply during the month, which was great for job seekers, but a worsening of staff availability contributed to marked increases in pay, which was not so great for employers.

The data points to a 21-month of growth in permanent staff appointments in Scotland.

Scottish recruiters placing temporary staff had their busiest month since May, while permanent staff demand increased at its fastest pace in four months. Expansion in permanent and temporary jobs were above comparable UK averages.

However, availability of candidates to fill vacant roles continued to fall, with permanent labour supply decreasing at a quicker pace than for the UK as whole.

Short-term staff availability also dropped off, extending the current period of deterioration to 21 months. That said, rates of decline eased in both cases.

Permanent staff in Scotland were awarded higher starting salaries than at any time since March 2013, with the rate of pay inflation accelerating to a 46-month high.

Temporary staff in Scotland also observed further growth in wages during October, with higher hourly pay rates, despite the pace of increase softening.

Meanwhile, with income tax rates continuing to diverge north and south of the border - following the Scottish Government’s decision not to implement the Chancellor’s raising of the 40p higher rate threshold to £50,000 - public sector employers could find it more difficult to recruit staff, it has been suggested.

Holyrood finance secretary Derek Mackay was warned the 'gulf' in income tax costs between Scotland and the rest of the UK could have a 'major impact' on public-sector recruitment north of the border.

With the current high rate tax band remaining at £43,430 in Scotland, someone earning £100,000-a-year will pay £1,843 more a year, according to the independent Scottish Parliament Information Centre (Spice).

This could leave public sector employers, particularly in areas such as higher education and the National Health Service, at a competitive disadvantage, according to the Scottish Conservatives.

The party’s finance spokesman, Murdo Fraser, said there will be a 'clear and noticeable gulf for thousands of people in Scotland'.

“This isn’t the elite we’re talking about – it’s a significant disadvantage for senior teachers, nurses and police officers,” he said. “It will reinforce Scotland’s reputation as a high-tax country and one which punishes aspiration and drives away wealth.

“It could also have a major impact on public-sector recruitment, as we have already seen in relation to head teachers’ concerns.”

The Scottish Government said the changes would mean an additional £428million will be available in 2018/19 to invest in public services and the economy.

It also pointed out that taxpayers in Scotland benefit from a range of services not available in England, such as free prescriptions and free university tuition.

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