DWF comments on latest Scottish labour market statistics

Ann Frances Cooney says: “Scotland’s most recent labour market data reflects a complex picture, with movement evident across employment, unemployment and inactivity measures.  The estimates for December 2025 to February 2026 indicate that over the quarter, the employment rate decreased and the unemployment and economic activity rates increased.

The headline figures for the period show the employment rate in Scotland was estimated at 74%, down 0.7% over the quarter.  By way of comparison Scotland’s employment rate was below the UK rate of 75%.  The estimated unemployment rate in Scotland was 4.1%, up 0.4% over the quarter.  Scotland’s unemployment rate was below the UK rate of 4.9%.

The early seasonally adjusted estimates for March 2026 from HMRC Pay As You Earn Real Time Information indicate that median monthly pay for payrolled employees in Scotland was £2,619, an increase of 4% in normal terms compared with March 2025.  This is lower than the growth in median monthly pay for the UK over the same period.  Pressure on employers continues to build, as global instability feeds into higher prices, employees push for pay increases to protect living standards, and organisations face rising costs across their operations, including the April increase in the National Minimum Wage. Closer to home, the uncertainty surrounding the Holyrood elections in May and the prospect of a possible change in Scottish Government also makes it difficult for employers to plan ahead, especially where it is unclear whether another Independence Referendum could be on the horizon.  

The year ahead is poised to bring tangible change to the employment landscape, as reforms under the Employment Rights Act 2025 begin to take effect across workplaces. With these new protections now being implemented in practice, many employers are reassessing how they approach recruitment and longer‑term workforce planning, against a backdrop of higher employment costs and more demanding compliance requirements. Alongside this, organisations should expect an uptick in trade union activity, as strengthened statutory rights support greater engagement, easier access and a more confident approach to employee representation – both unionised and non-unionised employers should be aware.”