19 Mar 2026
Ann Frances Cooney, employment expert and partner at DWF, has commented on the latest labour market figures in Scotland:
"Amid ongoing economic pressures, Scotland’s latest figures reveal a nuanced labour market, marked by movements across employment, unemployment and inactivity. The estimates for November 2025 to January 2026 indicate that over the quarter, the employment rate decreased slightly, the unemployment rate increased slightly while the economic inactivity rate was largely unchanged.
The headline figures for the period show the employment rate in Scotland was estimated at 74.8%, down 0.1% over the quarter. By way of comparison Scotland’s employment rate was below the UK rate of 75.1%. The estimated unemployment rate in Scotland was 3.9%, up 0.1% over the quarter. Scotland’s unemployment rate was below the UK rate of 5.2%.
The early seasonally adjusted estimates for February 2026 from HMRC Pay As You Earn Real Time Information indicate that median monthly pay for payrolled employees in Scotland was £2,595, an increase of 3.6% in nominal terms compared with February 2025. This is lower than the growth in median monthly pay for the UK over the same period. The financial strain on employers is intensifying, with global conflict pushing up prices, employees seeking higher wages to keep pace with rising living costs, and organisations themselves facing escalating operational expenses on every front.
The coming year is set to reshape the employment landscape, with the reforms under the Employment Rights Act 2025 now taking practical effect across workplaces. As these new protections begin to bed in, many employers are recalibrating their workforce strategies, adopting a more measured approach to recruitment and longer‑term planning in response to rising employment costs and heightened compliance demands. In parallel, organisations should anticipate a visible increase in trade union activity, with strengthened rights expected to prompt higher levels of union engagement and a more assertive approach to employee representation."
