Jobs report suggests employers need to refocus on retaining resources
The rate of average starting salaries is at its highest level for six months with almost a third of recruiters reporting that the pay they’re offering new hires is higher than last month, a pay survey has revealed.
Pay growth was especially strong in the Midlands and the south, where 35 per cent and 37 per cent of recruiters, respectively, report higher starting salaries, according to the latest Job Report from the Recruitment and Employment Confederation (REC) and KPMG.
Candidate availability has continued to fall with teaching and nursing skills in particularly short supply.This follows recent calls from the National Union of Teachers to restore national pay scales, to encourage more teachers into the profession.
Commenting on the overall trends Kevin Green, REC chief executive, said: “Almost a third of recruiters say that starting salaries have increased in comparison to last month, and we’ve seen another increase in the number of people that have found a new job via a recruiter.
“This suggests that labour market fluidity is returning - candidates are more confident about looking for work, and there are opportunities to earn more for those that do. Employers need to realise that people are deciding to change jobs because they can earn more than in their current job.
“Increases in starting salary offers are being driven by skills and talent shortages across the economy, and businesses are going to have to think hard about retaining scarce resource.”
Green highlighted the “acute shortages in the public sector”, with recruiters reporting that teachers and healthcare workers are hard to find both for permanent and temporary vacancies.
“As politicians debate skills, education and immigration in the run up to the election, we hope they recognise the potential impact of this skills crisis, because a lack of workers to meet demand threatens the sustainability of our economic growth,” he added.
Bernard Brown, partner and head of business services at KPMG, said: “Recruiters are struggling with industry-wide skills shortages, as demand for talent continues to outstrip the number of candidates seeking work. This pervasive skills shortage could put the brakes on economic growth if it continues unabated.”
He said that the lack of job candidates could be a result of “nervousness” in the run up to the election with candidates seeking certainty before giving up their current role.
“This tightening labour market is forcing up wage inflation as businesses bid for the best talent. Such a trend could cause a two-tier pay market, creating a significant divide between highly paid new starters and current employees receiving subdued pay increases, Brown said. “This dynamic will cause businesses problems in the long term as they struggle to keep hold of talented staff increasingly dissatisfied by their remuneration packages.”