Starting salaries for new employees and temporary staff wages have increased at the sharpest rate for 24 years, according to a study by KPMG and the Recruitment & Employment Confederation (REC).
BBC News reports that according to the study, robust demand for staff has been fuelled by rising economic activity, but at the same time, there are fewer candidates for the available jobs, which has driven the increase in starter salaries.
KPMG and REC’s study surveyed 400 recruitment agencies and found that the number of people available for jobs has dropped to a near-record low.
According to the recruiters, increased demand for staff, a high unemployment rate, fewer EU workers, and a lack of confidence among employees to switch roles due to the pandemic has all contributed to the decline in the number of appropriate candidates available for jobs.
Neil Carberry, chief executive of the REC, said: "We have all seen how labour shortages have affected our everyday lives over the past few weeks, whether that's an empty petrol station or fewer goods on supermarket shelves.”
He explained that the scale of the shortages cannot be tied to one sole factor, and have become a major challenge to businesses’ ability to drive UK prosperity going forward. Carberry added that it is essential that the government works with businesses to help deliver sustainable growth and rising wages, instead of a ‘crisis-driven sugar rush’.
Claire Warnes from KPMG said the ‘unprecedented increase’ in starting salaries is being ‘driven by the near-record fall in candidate availability’.
"Wage growth alone is unlikely to help sustain economic recovery because of limited levers to bring people with the right skills to where the jobs are and increase productivity," she said.
Warnes noted that the steep increase in hiring activity is a ‘reason to be hopeful’, but warned that competition is fierce as many workers do not have the right skills to be able to transfer to the sectors that have the highest demand.
"Reskilling and supporting people to move jobs which are in demand needs to be speeded up. Otherwise, we may see these clear tensions in the labour market turning into a workforce crisis in many sectors," she added.
The sentiment was echoed by international recruiting firm Robert Walters Group, which recruits for jobs such as lawyers, accountants, IT professionals, said that ‘competition for talent is fierce’.
Chief executive of the recruitment firm, Robert Walters told the BBC’s Today programme on 7 October that “there are shortages in pretty much any country you care to name”.
He added that skills are more in demand, as ‘every job is getting more complicated’.
Law and accountancy sectors have also experienced increased demand for jobs, according to Robert Walters. He said that the company has now seen law firms pay newly qualified lawyers a salary of £150,000 or more, which, he said, is unheard of.
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