However, experts warn that the present trajectory is 'unsustainable,' and they advise businesses to provide more rewards in order to attract talent
According to the latest Report on Jobs from KPMG and the Recruitment and Employment Confederation (REC), permanent beginning salaries grew at a record rate in November, having grown every month since March 2021.
Between October and November, the Permanent Pay Index grew slightly, from 77.2 to 77.8. A number more than 50 indicates an increase in salaries, while a score less than 50 shows a reduction.
The ongoing growth in the Temporary Wage Index slowed from the previous month across the UK, from 70.7 to 68.7, but the regional picture was different, with the Midlands experiencing the biggest increase, from 69.6 to 70.9.
The research also revealed that permanent employee appointments increased for the ninth month in a row, with the Permanent Placements Index jumping from 66.8 in October to 69.2 in November.
Respondents in the study, which gathered data from a panel of over 400 UK recruitment and employment consultancies, ascribed the increase to sustained demand for personnel, but there were indications that limited applicant supply had hindered companies' capacity to fill openings.
Clare Warnes, head of education, skills and productivity at KPMG, said employer confidence to hire was reassuring, but added that the current trajectory was unsustainable: “The pace of demand for workers is running far faster than supply can keep up with, which is draining an already diminished pool of available talent and feeding into inflationary pressures.”
“The priority must be to replenish the workforce and ensure businesses can access the talent they need. That means equipping job seekers with the skills that employers and new industries are looking for, increasing labour market flexibility and improving transport links.”
The report also revealed a continued decrease in the availability of permanent staff, however the decrease was the lowest in six months, with the Permanent Staff Availability Index rising from 27.4 in October to 31.2 in November. Half (49 per cent) of the survey respondents noted a lower availability of permanent staff, while just 8 per cent noted an increase.
Similarly, temporary candidate numbers also decreased, albeit this represented the lowest decline in six months, with the Temporary Staff Availability Index rising from 28.9 in October to 31.3 in November.
Neil Carberry, chief executive of the REC, said that the figures were positive for those looking for a job because demand for staff has increased starting salaries and temporary rates of pay. “Hospitality will be in the forefront of any changes as we approach the festive season, of course, and the impact of high inflation will also be felt as purses tighten in January”, he said, but added that the Omicron variant may change the outlook for December.
“The labour market will remain tight for some time to come… this will put a premium on skills development, and the flexibility to hire overseas when necessary. These two issues will be critical ones for the government to address next year – both levelling up and delivering a global Britain rely on them.”
Jon Boys, labour market economist at the CIPD, said that employers need to offer broader benefits to potential candidates that go further than increasing starting salary. “To attract and retain staff they should also look at training, development and progression opportunities and ensure flexible working options are widely available,” he said.
Jasmine Urquhart. (2021, December 10). Retrieved from: https://www.peoplemanagement.co.uk/news