U.K. Starting Salaries Increased at a Record Rate in July
Starting salaries in the U.K. surged at the fastest pace in at least 24 years as employers try to squeeze more workers out of a shrinking pool of candidates, a survey showed.
Pay for new hires reflects increasing competition for staff to fill jobs that opened with the loosening of pandemic restrictions, KPMG and the Recruitment and Employment Confederation said. Their report indicates inflationary pressure on wages after Britain’s exit from the European Union reduced the number of workers.
U.K. companies from retailers to construction firms are struggling to fill gaps in their workforce after Brexit cut immigration from the EU and the pandemic prompted workers to seek more secure jobs. That has shifted concerns at the Bank of England away from unemployment and toward ensuring that there’s enough workers feeding into available jobs.
The BOE, in a report on Thursday, noted an increase in pay settlements as well as signs of upward pay pressures more broadly. It said some of its contacts cited competition for experienced professionals as a reason for offering higher salary packages and more flexible working conditions.
“The labor market challenge is now different,” BOE Governor Andrew Bailey said at a press conference. “There is growing evidence of higher job vacancies and associated labor market tightness. The challenge of avoiding a steep rise in unemployment has been replaced by that of ensuring a flow of labor into jobs. This is a crucial challenge.”
But while it’s a “good time to be looking for a job,” Kate Shoesmith, deputy chief executive of the REC, said new immigration rules are key to meet the surge in labor demand. “Skills shortages have been with us for a while and as our data shows are getting worse,” she said.
Vacancies grew at the fastest pace since the survey started in 1997. The number of people seeking to fill them dropped almost as rapidly as the record pace in June.
Hiring for permanent roles in London and the Midlands rose the fastest on record, out-pacing the South and North of England. Job vacancies expanded across all sectors, led by IT and computing.
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