Caithness workers see salaries lag behind inflation as living and energy costs soar, report shows
New research has revealed that despite the increase in interest rates, the cost of living and energy prices, salaries in Caithness are not keeping up, with companies advertising stagnating salaries across the UK.
The Scottish Government's monthly labour market report includes estimates of monthly pay for the various local areas in Scotland that are based on provisional statistics from HMRC for February 2022. Tony Mackay, a leading Highland economist, says these figures show there is a -4.4 per cent difference for wages in the Caithness/Sutherland/Ross and Cromarty area.
Mr Mackay says that the North East of Scotland average salary is +6.5 per cent higher than the national average, however, which reflects the continuing importance of the North Sea oil and gas industry in the region, despite the massive contraction it has experienced in recent years. But the average monthly salary in Caithness is £1973 with the average for the North East being £2209.
From analysis of more than 9.35 million jobs posted on Reed.co.uk across the UK since 2018, advertised salaries are sitting at pre-pandemic levels, with any rise over the past two years dropping back down to 2020 levels. Salaries in Scotland are no exception, as they lag behind soaring living costs, much like the UK average.
Despite talk about "The Great Resignation", Reed’s salary guides and research shows that this has become more of a "Great Flirtation", with businesses in an ongoing fight to attract talent, a lack of available jobseekers in the market, and the perceived risk of changing roles during economic flux.
Mike Harrison, Reed’s regional managing director for Scotland, said: “Like many other areas across the UK, Scotland has been devastated by the economic impact of the last two years, with the pandemic leaving a patchwork of salaries between sectors.
“While we saw a small increase in salaries in Scotland, in the face of soaring living costs this won’t go very far for workers. Scottish businesses will be hoping the staycation boom continues to help grow the country’s economy and boost its recovery."
The annual salary guides also found salaries in Scotland varying between sectors, with some like procurement and supply chain experiencing an increase of 6.6 per cent, but others such as insurance and financial services seeing a decrease (-6.2 per cent).
While the nominal increase in Scottish average salaries is good news despite a difficult year for the economy, in the context of soaring inflation with the Consumer Price Index at 5.5 per cent, it shows that the financial effects of the pandemic are evident in salaries.
Mr Harrison continues: “Businesses in Scotland looking to recruit right now are facing unique challenges in a candidate-driven market, which is likely why we’re seeing variations in salary increases across sectors, as companies try to fill their most pressing vacancies.
“Businesses must look at their talent attraction strategies and ensure that their salary and benefits offerings are the best they can be in order to attract the best people for their open vacancies.”