With candidate availability falling at a near-record pace, contractor pay has risen at the sharpest rate in 24 years.
The latest Report on Jobs, compiled by the REC and KPMG, revealed that recruitment activity continued to grow considerably across the UK at the end of Q3.
Neil Carberry, Chief Executive of the REC, commented, “Demand for workers continued to grow last month, while staff availability fell at a near record pace. Competition for staff has led to the fastest growth in starting salaries since this survey began – not just in logistics and food processing, but in white collar professions as well. But 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.
“While the current crises will pass, rising input costs and further tax rises would only mean higher prices and lower investment in the medium term. It is essential that government works in partnership with businesses to deliver sustainable growth and rising wages, rather than a crisis-driven sugar rush. That includes working on policies that encourage business investment, an international outlook and skills development, especially at Levels 1 and 2 where shortages are most acute – this will also help unemployed young people get into work.”
Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, added, “This month’s unprecedented increase in starting salaries – the highest in 24 years – is being driven by the near record fall in candidate availability. While higher salaries are good for job seekers, 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.
“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.”
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