It was reported by the BBC earlier this month that starting salaries and temporary staff wages have risen at the sharpest rate for 24 years, according to a survey undertaken by KPMG and the Recruitment & Employment Confederation (REC).
The demand for staff is being fueled by rising economic activity, and at the same time, there are fewer candidates for jobs, which is leading to big increases in starting pay. The strongest demand for jobs is currently in the IT, hospitality, and catering sectors.
The survey of 400 recruitment firms has found the number of people available for jobs has fallen to a near-record low. They explained that a greater demand for staff, a high employment rate, fewer EU workers, and a lack of confidence among employees to switch roles due to the pandemic have all contributed to this situation.
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.
The scale of the shortages we are seeing cannot be explained by one factor alone, but are a major challenge to businesses’ ability to drive the prosperity of the UK in the months and years to come.”
At Next, Lord Wolfson said that warehouse wages had gone up by around 60& in the last ten years and 70% for Christmas wages, and added that “wages have already gone up significantly”. But, he said the firm was still finding that there were not enough workers in particular areas who wanted to move for short periods of time.
The most recent figures from the Office for National Statistics suggested that growth might be stalling, with real wages - a measure that takes account of rising prices - looking lower in July than they were in April. There was also a jump in inflation reported for August as well as rising energy prices. Average earnings fell in the first months of the pandemic as people were furloughed, which meant in many cases their pay fell, or they worked fewer hours.
The annual figures we are now seeing are compared with early in the pandemic, which is making the increase in wages bigger. Throughout the pandemic, more low-paid employees have lost their jobs than high-paid employees, which means that average earnings have gone up. There are also 2.6 million workers affected by the public sector pay freeze who will not benefit from rising wages according to the Resolution Foundation.