Recruiters across Scotland saw further sharp rises in hiring activity during March, according to the latest Royal Bank of Scotland Report on Jobs.
Panellists noted an acceleration in both permanent placements and temporary billings, amid reports of greater market confidence and increased activity at clients.
However, the growing imbalance between demand for staff and supply of labour resulted in further marked increases in starting pay, with the latest rise in permanent starting salaries being the fastest on record.
The seasonally-adjusted Permanent Placements Index signalled a further rise in permanent staff appointments across Scotland in March.
The rate of growth quickened slightly since February and was the second-sharpest on record. Anecdotal evidence suggested that stronger market conditions and a surge in client demand drove the latest increase in permanent placements.
Notably, the rate of growth outpaced the UK-wide average for the third consecutive month.
Recruiters across Scotland recorded a further uplift in temporary billings in March, with the rate of growth gathering momentum, accelerating to a five-month high.
Recruiters indicated that the latest expansion was supported by rising business activity at clients as Covid-19 disruption subsided.
The latest survey data indicated that the availability of permanent staff declined again in Scotland during March, thereby extending the current sequence of reduction that began in February 2021.
Recruiters often commented on tight labour market conditions and acute skill shortages when explaining the latest fall. That said, the rate of decline in Scotland remained softer than that seen across the UK as a whole.
The supply of short-term staff across Scotland fell for the 13th month running in March. Recruiters blamed the latest decrease in availability to a generally low unemployment rate and reluctance among some workers to seek new roles.
March data signalled a 16th consecutive monthly rise in permanent starting salaries across Scotland. Moreover, the rate of increase was the fastest since the survey began in January 2003. Recruitment agencies linked higher starting salaries to efforts to attract candidates amid ongoing labour shortages.
The rate of salary inflation across the UK as a whole also hit a fresh series high in March, but remained slower than that seen in Scotland.
RBS also highlighted a rise in temporary staff wages in Scotland in March, with the rate of inflation quickening to a three-month high. Anecdotal evidence suggested that short-term pay increased as part of efforts to attract applicants.
Vacancies for permanent staff across Scotland expanded for the 14th successive month in March, with the quickest rate of growth since last October.
By sector, engineering and construction recorded the steepest increase in permanent vacancies, followed closely by IT and computing. Both these sectors also topped the rankings for temp vacancies.
Recruitment consultancies signalled an 18th straight monthly rise in temp vacancies across Scotland. The rate of expansion was sharp, having accelerated to a three-month high, but was not as steep as that seen across the UK as a whole.
Sebastian Burnside, chief economist at RBS, commented: "Latest survey data pointed to a further marked improvement in labour market conditions in March, fuelled by robust demand for staff.
"Furthermore, as overall demand for staff continued to increase, the data suggest that there will likely be further strong rises in recruitment activity in the months ahead.
"However, ongoing labour shortages do raise the question of how strong future increases in permanent placements and temp billings will be, as skill shortages limit firms’ ability to fill roles.
"Nevertheless, the competitive and tight labour market plays in favour of job seekers, with starting salary inflation hitting a fresh survey high in March," he added.
Don't miss the latest headlines with our twice-daily newsletter - sign up here for free.
