Strengthening demand for workers is fuelling sharp salary increases

 
Chris Papadopoullos
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RAPIDLY rising demand for workers and reduced jobseeker availability is causing pay to climb, according to survey figures released today by consultants KPMG and the Recruitment and Employment Confederation.

An index representing the growth of permanent hiring rose to a score of 60.6 in April from March’s 59.5.

An index score above 50 signifies growth, with higher numbers pointing to faster growth.

It puts the rate of permanent hiring at an eight-month high and marks a 31st consecutive month of hiring growth.

Climbing demand for workers is pushing up pay, with pay growth accelerating to a nine-month high in April. An index representing pay growth increased to 65.8 in April. It is the fastest growth in salaries for newly placed workers since July 2014. A shorter supply of workers is also helping to lift pay. An index for growth in permanent candidate supply posted a score of 34.3. Because it is below 50, it implies the pool of available workers is shrinking.

“The declining pool of available labour continues to force pay up. With two in five recruiters in the UK reporting falling candidate availability, spiralling salary growth remains a concern as businesses bid against each other to secure skilled staff,” said Bernard Brown, partner and head of business services at KPMG.

Brown added: “There has been a resurgence of recruitment into Britain’s boardrooms, with businesses poaching top talent to drive their companies forward. This surge of executive hires is a strong indication of underlying business sentiment and their ambitions for the future.”

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