UK employers pay more for skilled workers
Rachel Muller-Heyndyk, September 10, 2018
Companies are having to pay more for staff as they struggle to find skilled workers, according to the Recruitment and Employment Confederation (REC)
The latest monthly survey from the REC found that wages in August grew at the second fastest rate in more than three years. The increase came as recruiters reported that the availability of staff continued to decline sharply.
The drop in staff availability comes with unemployment at a 43-year low of 4% and employment at a record high.
The survey used REC's Jobs Vacancy Index to monitor overall demand for staff. An index reading above 50 signals an increase on the previous month, whereas a number below 50 indicates a decrease. The survey reading for salaries was 62.4 and for staff availability 37.4, with 50 separating growth from contraction.
The REC reported that shortages were most acute in IT, which ranked first at 67.3, and computing and engineering, where permanent job vacancies were highest in August at 65.4. There was also strong demand for hotel and catering staff (62).
The news came as separate research from Gartner revealed that a significant number of employees are looking to change roles.Its latest Global Talent Monitor report for 2018 showed that 18.8% of UK employees indicated a very low intent to stay in their current role, the second highest levels after India (40%), and higher than the global average of nearly 12%.
Neil Carberry, chief executive of the REC, warned that businesses must prepare for changes to the jobs market as Britain leaves the EU.
"How long our labour market can defy gravity if the shape of our future trading arrangements with the EU remain unclear is the big question," he said. "Companies are starting to implement contingency plans now; and those who aren't will need to step up progress."
Carberry added that recruiters should focus on helping people in low-growth sectors such as retail to reskill.“The biggest long-term question on jobs is how they will be affected by new technology and stiff price competition driven by value-conscious consumers. For recruiters, helping people find pathways from sectors like retail into growing sectors will both boost opportunity and address candidate shortages in key sectors.”
Jan Mueller, global vice president of marquee accounts at Korn Ferry, said that the rise in technology and growth of the gig economy has contributed to the need for skilled workers.
“The age of digital disruption is seeing business models, industries and working practices transform, with jobs that didn’t exist a few years ago being created," he said. "What this means is there are increasing demands for new skillsets in virtually every job and profession. As a result, hiring and retaining workers who are agile and who can adapt to the fast pace of change is vital, and this is driving demand.
“Meanwhile, the growth of the gig economy has made it easier and more appealing for skilled people to reject permanent roles in favour of a more flexible and varied working scenario, which is eroding the supply of skilled workers willing to take a permanent role.”
Mueller added that businesses should focus on offering career development and flexible working to attract and retain talent.
“To overcome these challenges, organisations need to develop a compelling proposition to potential employees… Flexible working, robust career development programmes, a creative working environment – these will all be ways to compete in a tight labour market without necessarily offering higher wages. Moreover, these elements can help ensure that the organisation retains its best staff.”