Starting salaries continue to rise, says REC/KPMG report

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Starting salaries for people entering both temporary and permanent employment have risen for the seventh consecutive month, according to the Recruitment and Employment Confederation (REC) and KPMG.

The Report on Jobs is based on a survey of 400 recruitment and employment consultancies. More than one-third (38%) say that permanent starting salaries are higher than one month previously, up from 33% last month. Only 3.5% said they believe starting salaries have gone down.

The hourly rate for temporary staff is also increasing, albeit at a slower rate. Almost one-quarter (22%) of respondents are seeing an increase in the starting hourly rate (up from 19% last month) while only 3.5% report a decrease.

Bernard Brown, partner and head of business services at KPMG, said employers are offering higher salaries "in a desperate attempt to lure skilled workers from competitors". But he warned this might not have the desired effect.

"It is clear that candidates are not easily swayed," he said. "The desire for extra disposable income is not yet translating into a generation of employees who are only loyal to their monthly pay cheque."

Candidate availability down

Employers' access to available candidates also fell in June. Exactly half said they had fewer candidates to choose from for permanent roles (up from 40% in May) while just 5% say they have more. The availability of candidates has now fallen every month in 2014.

REC director of policy and professional services Tom Hadley warned employers they are seeing the number of available candidates "plummet".

“The message to UK businesses is that it is crucial to sharpen up hiring procedures in an increasingly candidate-driven market," he said. "The message to Government is that we need to reform the visa system to satisfy immediate demand for skills, while stepping up measures to boost the UK skills base for the long term.”