Almost a quarter (24%) of employers surveyed in the Report on Jobs said they were awarding higher salaries for permanent positions than in November 2014, compared to just 2% who were paying lower salaries.
Employers who took part in the survey also reported a decrease in candidate availability, and highlighted skills shortages in several areas, including HR, legal and project management.
REC chief executive Kevin Green said the recruitment market is looking strong as we enter 2015, but warned the general election could result in uncertainty.
“The prospect of increased government intervention in the labour market, as promised by the left, questions around Britain’s position in the EU that are being posed by the right, and the potential for protracted negotiations around a hung parliament come May, could affect business confidence and hence future hiring,” Green said.
Counter-offers on the rise
According to separate research by financial recruitment firm Robert Half, counter-offers are on the rise, indicating a shift towards a more candidate-driven marketplace.
The research found that 65% of employers in the financial industry have seen an increase in counter-offers in the past 12 months.
Senior finance professionals are also more likely to offer sign-on bonuses to attract top talent compared to this time last year.
Phil Sheridan, UK managing director of Robert Half, warned that counter-offers are not an effective long-term strategy to retain staff.
“In order to keep their best employees, companies need to ensure that they are paying competitively with an appropriate salary and bonus structure," he said.
“Companies will also do well to focus on initiatives that support work-life balance, such as remote and flexible working, as they become increasingly important to employees.”