New figures show workers moving to new jobs saw big wage increases in December as companies struggled to hire staff amid a nationwide labor shortage.
Starting salaries for both temporary and permanent employees rose rapidly in December, the Recruitment and Employment Confederation (REC) found.
The group, which represents recruitment firms, said wage inflation is near record highs as demand for staff continues to outstrip supply.
The REC surveyed around 400 recruitment firms, with respondents reporting “significant increases” in both permanent and temporary positions.
IT & Computing was the most sought-after category for permanent employees in December, continuing a trend from the previous month. A steep increase in job vacancies was also observed in the other nine sectors covered by the survey.
Behavioral changes triggered by the pandemic, such as For example, spending more time online shopping and working remotely has led to an increase in demand for IT staff.
Covid has also put a huge strain on overstretched health services and deepened recruitment shortages of skilled workers. Nursing, medicine and nursing were at the top of the REC’s ranking of temporary worker vacancies.
According to the latest official data, vacancy rates are at record levels across the UK economy. The government has been urged to change post-Brexit immigration rules to take in more workers with the required skills.
Neil Carberry, Chief Executive of the REC, said: “2022 will be the year we realize that staff shortages will survive the pandemic as an economic problem. This survey shows once again how tight the labor market was at the end of last year.
“Demand for staff is growing across all sectors and regions of the UK and candidate availability is still declining. These trends have slowed in recent months, but that’s not surprising given the record pace of change in early fall 2021.”
Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, said: “The UK labor market has soared to near historic levels as the new year approaches. And that’s even though it’s losing some of its momentum with the acceleration in labor demand, wage and salary growth and the slight drop in job vacancies.
“Employers in all industries have not lost their appetite for hiring, but many will be frustrated by the pressure that these inflationary and competitive conditions, which are likely to persist for some time, are putting on their operating costs and ability to expand.”