10th August 2026
The latest UK jobs figures suggest that Britain's employment market may finally be beginning to stabilise. But for Scotland, the story is more complicated – and potentially more encouraging in some of the industries that matter most to the country's future.
The KPMG and REC jobs survey found that temporary recruitment has strengthened sharply while the decline in permanent hiring has eased. Employers are still cautious, but they are beginning to take on workers where they are needed.
Scotland's own labour-market figures show a similar mixed picture.
Employment is weak, but pay is rising
There were around 2.45 million payrolled employees in Scotland in June, only 0.1% fewer than a year earlier.
More encouragingly, median monthly pay reached £2,672, up 4.7% over the year. That was faster pay growth than the UK as a whole, where median monthly earnings increased by 4.3%.
So Scotland is not experiencing a collapse in employment. Instead, the labour market is becoming more competitive, with employers still prepared to pay for people they need.
There is, however, a warning sign.
Scotland's unemployment rate reached 4.7%, up 1.3 percentage points over the year. The employment rate for people aged 16-64 fell to 74.3%, while around 741,000 people were economically inactive.
The important question is where the jobs are
This is where the UK-wide KPMG/REC figures become particularly interesting for Scotland.
The strongest areas of permanent recruitment nationally included nursing, medical and care occupations and engineering.
Those are sectors in which Scotland has significant long-term requirements.
Scotland needs workers for its NHS and social-care system. It also needs engineers for offshore wind, electricity transmission, nuclear decommissioning, construction, transport and other infrastructure projects.
That means Scotland could benefit disproportionately if the wider UK jobs market moves from simply using temporary workers towards genuine investment and permanent employment.
The Highlands face a different challenge
For rural Scotland, however, the problem is not simply unemployment.
A business in Caithness can have difficulty finding the right engineer, electrician, construction worker, care worker or hospitality employee even when unemployment elsewhere is relatively high.
Distance, housing availability, transport costs and the small size of local labour markets can make recruitment much harder.
This creates an unusual situation: Scotland can have people looking for work while individual businesses still cannot find the skills they require.
The answer cannot simply be to create more jobs. It must also be about matching people to the jobs that are being created.
Temporary work could become more important
The growth in temporary recruitment identified by KPMG and REC could also have particular significance for Scotland.
Businesses facing uncertainty may be reluctant to create permanent positions but still need workers for specific projects.
That could suit sectors such as construction, renewable energy, engineering, tourism and infrastructure, where demand can rise sharply around individual projects or seasons.
For workers, however, temporary employment has both advantages and disadvantages. It can provide an entry into employment and eventually lead to a permanent position, but it offers less security than a traditional job.
Scotland needs to turn projects into permanent careers
Perhaps the biggest opportunity is to connect Scotland's huge investment ambitions with its labour market.
Offshore wind, electricity-grid expansion, housebuilding, nuclear decommissioning, data centres, transport infrastructure and the transition to a lower-carbon economy all require people.
The danger is that Scotland creates the projects but fails to create enough of the skilled workforce locally to deliver them.
That would mean importing skills from elsewhere rather than allowing local communities to capture the economic benefits.
A cautious opportunity
The latest figures therefore present Scotland with something of a paradox.
Unemployment is rising and employment has weakened, yet wages are increasing and some strategically important sectors continue to require workers.
If UK business confidence improves, Scotland could be well placed to benefit – particularly if investment flows into engineering, energy, infrastructure, construction and care.
But the opportunity will not automatically translate into jobs.
Scotland's next challenge is not simply creating employment. It is making sure that the people who need work have the skills, training, transport and housing necessary to take the jobs that the next phase of investment creates.
For the Highlands and other rural areas, that may be even more important than the headline unemployment rate.