While this decline is notable, it remains more resilient than the wider UK figure, which saw a larger 0.4% drop over the same period. Furthermore, the claimant count in Scotland stood at 105,700 in January 2026, which, despite a slight monthly rise, reflects a 2.5% decrease over the year. Scotland’s claimant unemployment rate of 3.5% also remains significantly lower than the UK average of 4.4%.

Employment expert and DWF partner Ann Frances Cooney notes that these figures highlight a mixed environment. She said: “In the context of sustained economic pressure, the latest figures for Scotland highlight a mixed labour market picture, with movements across employment, unemployment and inactivity.

“The estimates for October to December 2025 indicate that over the quarter, the employment and unemployment rates increased while the economic inactivity rate decreased.”

Specifically, Scotland’s employment rate rose to 74.8% while the unemployment rate edged up to 3.8%, a figure that remains comfortably below the UK’s 5.2% unemployment rate.

Wage growth continues to be a defining feature of the current landscape. Median monthly pay for payrolled employees in Scotland reached £2,612 in January 2026, a 4.8% annual increase that outpaces the UK’s growth of 4.6%. Ms Cooney observes that “the sustained financial pressures facing employers should not be underestimated, as employees seek higher pay to offset rising living costs while businesses contend with increasing operating expenses of their own”.

Looking ahead, the implementation of the Employment Rights Act 2025 is expected to reshape workforce strategies. Ms Cooney suggests that the year will bring considerable change as expanded worker protections take effect, leading many employers to adopt a more cautious stance on recruitment due to heightened compliance requirements and rising costs. She also anticipates a shift in industrial relations, stating that “employers should also be preparing for greater trade union visibility and engagement, as strengthened rights are likely to encourage increased collective activity and a renewed focus on employee representation”.