Starting salaries, regular pay and labour share all up amid skills shortage
Starting salaries for new workers were up in June according to the Recruitment and Employment Confederation and KPMG, as business leaders tackle a skills shortage.
Official statistics also showed that regular pay in June 2019 had increased by 3.6 per cent on the year, an 11-year high.
Contrary to previous research, the Bank of England has revealed that the labour share in the UK is also up. Current levels are at 70 per cent, compared with 65 per cent in 1970 and around 60 per cent in 1980.
Workers are not only in higher demand and earning more, but the amount of hours people are working has also increased by ten per cent compared to the year 2009 according to the Office for National Statistics.
In 2009 following the financial crisis, the average number of weekly hours for a full-time worker hit a low of 36.5, which has recovered to reach 37.4 over the last decade. Increased employment for university graduates and over 50s is thought to be driving up the overall amount of work that has been done.
However, despite this growth, there has not been a significant increase in productivity.
A survey compiled by recruiters estimated that the upward trend in wages and hours worked would continue with employers having to offer higher salaries to attract new staff. However, the pressure to increase wages has lessened amid the uncertainty surrounding Brexit as lessened market confidence has deterred some business leaders from doing so.
Addressing the matter, James Stewart of KPMG said: “With the UK unemployment rate already at a four-decade low, candidate shortages in the labour market continue to push up rates of starting pay."
Stewart feels this may cause issues for businesses looking to keep outgoings under control ahead of the October 31 Brexit deadline.
He said: "This will likely cause concern for businesses looking to control their costs and recruit the right people for the long term. Ultimately, businesses will be eager to see a Brexit breakthrough in Westminster and help establish market confidence on hiring and investment”.
Throughout 2019 thus far, the number of people in permanent jobs has not gone up, although companies do have a rising number of job vacancies.
Yet, in spite of the fact vacancies are up, they are climbing at a lower rate than this time last year.
The low unemployment rate has meant that there are fewer candidates for new jobs, with the availability of workers having dipped overall since the year 2013.
The majority of current job vacancies are in the IT and computing industry, with hospitality and catering, engineering, and the accounting and financial sector closely behind.
Meanwhile, vacancies in construction and retail are down, with businesses hesitant to commit to projects given reduced market confidence while the high street continues to face difficulties due to the shift toward online shopping.