UK businesses are being forced to offer record starting salaries due to falling staff availability and talent shortages. A higher starting salary has become necessary in order for businesses to compete and attract the top talent to their company.
The statistics, taken from the monthly survey of recruitment agencies from the Recruitment and Employment Confederation (REC), showed starting salaries in June increased at the fastest rate for permanent staff since the survey began nearly 17 years ago. 400 recruitment agencies showed a considerable reduction in the availability of staff to fill permanent roles, suggesting that this was a driving factor for the rise in salaries.
According to the survey, salaries have now risen for 26 months in succession, with the hourly pay rates for temporary/contract staff also rising at the sharpest rate since 1997.
Despite the positive figures for June, annual wage growth has been weak with forecasts for 2014 as a whole, remaining below Britain’s pre-financial crisis average of 4.5%. The Bank of England forecasted wage growth to average 2.5% for 2014.
Bernard Brown, a partner at accountants KPMG, who sponsored the REC survey said: “Once again employers seem ready to ‘splash the cash’ in what appears to be a desperate attempt to lure skilled staff from competitors.”
According to the report, half of recruiters said that it was harder to find staff than a month earlier, while just 5% found it easier – the weakest overall reading since the survey started. The REC figures revealed that 38% of companies reported firms offering higher salaries than a month ago, whilst 58% said there had been little change and 4% reported lower salaries.
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