UK real wages, which take into account rising inflation, are forecast to fall in 2017 according to a new report from recruitment group Hays.
The diminishing real wages, prompted by a growing labour force and rising inflation, have led to lower wage pressure. This in turn has made it slightly easier for firms to attract and retain talent, the Hays Global Skills Index found.
Earlier this month, however, the Bank of England was adamant that growth would soon pick up as it signalled it may imminently raise interest rates for the first time in more than a decade.
“Candidates in areas of skills shortages remain in high demand,” said Hays UK managing director Nigel Heap. “They are also commanding significant salary increases, but generally wage pressure is easing across the UK.”
Key skills in demand in the UK include IT security architects, data analysts, risk analysts, part-qualified accountants and civil engineers.
The Hays index noted that in the UK, the wage gap between higher and lower skilled jobs had narrowed as pay in low-skill industries grew faster. This also contributed to the declining wage pressure.
Minimised wage pressure was found across 12 of the 18 European companies surveyed, and wages were also expected to fall in Belgium, Italy and Spain.
Across the globe, labour pressures have eased slightly since last year due to a growing number of well-educated migrants providing a flow of skills across countries.
“However, despite this slight easing of pressure, skill shortages remain a persistent issue and one that requires the immediate attention of businesses, governments and educational institutes,” said the company's chief executive Alistair Cox.