Starting salaries dropped at their fastest rate on record in June, according to a new report.
The Royal Bank of Scotland Report on Jobs found salaries for permanent staff were at their lowest rate since the survey began in 2003.
The salary drop comes as staff appointed to permanent and temporary jobs continued to fall, with respondents postponing hiring decisions amid the coronavirus pandemic.
Sebastian Burnside, Royal Bank of Scotland chief economist, said the labour market in Scotland remains “extremely challenging” with firms’ responses to the end of the furlough scheme in October causing the most uncertainty.
The report found permanent appointments fell for the fifth month in a row.
The contraction eased from May but remained rapid and quicker than the pre-coronavirus record.
People securing temporary jobs dropped for the seventh consecutive month but the decline was the slowest rate since February.
The survey of around 100 recruitment and employment agencies recorded a rise in candidates and fall in demand for staff.
Permanent candidates increased for the first time in more than eight years as respondents reported redundancies due to coronavirus.
The rise was the fastest since August 2009.
Temporary candidate availability also increased and was linked to employee layoffs and contract terminations.
Both temporary and permanent staff vacancies fell and remained below their pre-coronavirus records.
Mr Burnside said: “Labour market conditions in Scotland remained weak during June, with the latest Report on Jobs data highlighting further marked reductions in both permanent placements and temporary billings.
“That said, the rates of decline did soften slightly as parts of the economy look to reopen as a result of easing lockdown restrictions.
“Meanwhile, vacancies continued to decline substantially, with the falls in both permanent and temporary vacancies surpassing their respective pre-coronavirus records despite softening from May.
“As demand for candidates dropped again, starting pay came under further pressure, with starting salaries declining at the sharpest rate in over 17 years of data collection.
“Overall, the short-term outlook for the Scottish labour market remains extremely challenging with the biggest uncertainty being firms’ responses to the closure of the furlough scheme.”