Wages rise sharply with work­ers in high de­mand

The Daily Telegraph - Business - - Business - By Anna Isaac

BUSI­NESSES are fac­ing their tough­est re­cruit­ment mar­ket for 20 years as work­ers’ abil­ity to shop around for roles drives up wages.

Start­ing salaries for per­ma­nent work­ers main­tained a sharp up­ward trend in Oc­to­ber. Wage in­fla­tion for new work­ers was close to a three-anda-half-year high, and many com­pa­nies re­ported hav­ing to boost pay of­fers to at­tract staff, ac­cord­ing to re­search from KPMG and the Re­cruit­ment & Em­ploy­ment Con­fed­er­a­tion (REC).

The fig­ures tally with of­fi­cial data from the Of­fice for Na­tional Sta­tis­tics (ONS) show­ing em­ployee earn­ings rose by 3.1pc in the 12 months to Au­gust, the fiercest growth seen since 2009.

The find­ings come as un­em­ploy­ment reaches its low­est level in four decades. It is set to fall below 4pc by the end of the year, ac­cord­ing to pro­jec­tions from the Bank of Eng­land. The REC’s in­dex of job va­can­cies reached 57.4 in Oc­to­ber on a range where any score over 50 in­di­cates growth. This was a rise from 56 in Septem­ber.

How­ever, while firms were strug­gling to find staff, the rate at which new jobs were cre­ated hit a two-year low. The REC sur­vey also showed staff short­ages re­mained par­tic­u­larly acute in tech­nol­ogy and health­care.

James Ste­wart of KPMG said: “With the jobs mar­ket so heated, busi­nesses across the coun­try, of all types, are strug­gling to find work-ready staff.”

He said a “dwin­dling sup­ply of EU work­ers” was mak­ing it more costly for firms to hire good can­di­dates.

“Con­se­quently, we’re see­ing wages pushed up­wards and a trend of canny work­ers job-hop­ping to se­cure a pay rise rather than re­main­ing loyal to their ex­ist­ing em­ploy­ers,” he added.

The UK’s fu­ture ac­cess to mi­grant work­ers in or­der to meet ris­ing de­mand from its com­pa­nies was also flagged as a con­cern by the Bank of Eng­land in its Novem­ber In­fla­tion Re­port.

David Owen of Jef­feries said: “Skilled mi­gra­tion can be pro­duc­tiv­ity en­hanc­ing. This leads to the right sort of wage growth.

“The im­pact of less skilled labour com­ing into the UK will be some­thing they [the Bank of Eng­land’s pol­i­cy­mak­ers] have to think about.”

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