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Dan Barfoot of CMD Recruitment

Wage rises hit record high due to shortage of workers – report

A shortage of workers is causing an unprecedented rise in full-time starting salaries, according to a new report issued by CMD Recruitment.

The report, compiled by accountancy giant KPMG and REC, the Recruitment & Employment Confederation, reveals that ongoing worker shortages contributed to an unprecedented rise in starting wages in December.

Pay for temporary workers was also at its highest since KPMG started collecting data 24 years ago.

Low employment, uncertainty caused by the Covid pandemic, company expansions, and a reduction in foreign workers caused by Brexit are contributing reasons to the situation, the report suggests.

Claire Warnes, head of education, skills and productivity at KPMG UK, said: “The UK jobs market rocketed to near historic levels as New Year approached. That’s despite it losing a little fizz with the pace of accelerating demand for staff, wage and salary growth and vacancies all easing slightly.

“Employers in all sectors haven’t lost their appetite to hire, but many will be frustrated by the pressure these inflationary and competitive conditions, which are likely to continue for some time, are putting on their operating costs and ability to expand.

“The data show that the availability of staff is particularly pressing in the health and care sector, where demand for qualified personnel is running far hotter than availability of permanent and temporary candidates to fill roles. This has been exacerbated by Omicron, through sickness to workers and the need to self-isolate.

“The availability of workers is testing the resolve of employers across the economy and will likely cause distortion in recruitment patterns as businesses shift focus from long-term growth to short-term cover. However, we shouldn’t underestimate the business community’s ability to adapt to these new conditions and look to training and technology solutions to find a way forward.”

Neil Carberry, chief executive of the REC, said: “2022 will be the year we discover staff shortages will outlive the pandemic as an economic issue.

“This survey shows again how tight the labour market was at the end of last year. Demand for staff is growing across every sector and region of the UK, and candidate availability is still falling. These trends have been slowing for the past few months, but that is not surprising considering the record pace of change earlier in the autumn of 2021.

“Businesses need to make sure they are reacting to the long-term challenges of this market, thinking harder about their offer to staff and how to shape their future workforce. Recruiters are ideally positioned to help employers with this, and support governments across the UK on the skills, immigration and tax reforms that are needed to keep us competitive.”

The report shows that in the South West, demand for permanent workers rose for the 11th month running in December – and at a faster pace than the UK average.

CMD Recruitment is headquartered in Melksham with offices in Calne, Devizes, and Bath. Its annual Market Insight Report, a guide for employers and recruiters, is available free by request at https://cmdrecruitment.com/salary-guide/

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