Employers up pay offers as skills shortage fears mount in the UK labour market

Jasper Jolly
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Freezing Temperatures Continue To Grip The Country
The care sector has seen particular skills shortages (Source: Getty)

Employers are increasingly upping pay offers to new recruits to secure the best talent in the face of a tightening labour market, according to a new survey.

More than two in five employers who had difficulty recruiting candidates said they had increased the salary on offer, according to the survey of 600 firms by the Recruitment and Employment Confederation (REC).

The signs of a rise in wages add further evidence of a tight labour market, with unemployment at 4.7 per cent, an 11-year low.

Read more: Digital skills shortage is hurting three quarters of businesses, warns BCC

The lack of suitable candidates has led almost half of firms to say they expected skills shortages when hiring permanent candidates over the next three months.

The construction, engineering and care sectors were the industries with the most acute shortages in suitable candidates.

REC chief executive Kevin Green said: “Throwing money at the problem isn’t a long-term solution for employers, as they compete with each other for the available talent.

Read more: Employers see skills shortages ahead as demand for talent rises

“We need to train people up by embedding employability skills in schools, providing effective careers guidance and promoting apprenticeships. Employers should take responsibility for investing in training – it will help them retain staff and grow their own talent.”

Hiring intentions remain strong, with 34 per cent of employers saying they would need to add new staff if they look to grow their businesses, while another 46 per cent had “just a little” capacity and would have to add more staff if workloads increased significantly.

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