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Salaries rise to combat skills shortage across the UK

With the skills shortage across the UK putting pressure on companies to recruit the right staff, it’s perhaps not surprising that permanent starting salaries rose at a sharp and accelerated rate.
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The availability of skilled candidates has continued to decline, leaving scale-up businesses competing for talent amid a nationwide skills shortage.

The Markit/REC Report on Jobs found that demand for staff continued to rise in June, with the rate of growth remaining close to the recent peak in May.

With the skills shortage across the UK putting pressure on companies to recruit the right staff, it’s perhaps not surprising that permanent starting salaries rose at a sharp and accelerated rate. Growth in hourly pay also quickened.

Tom Hadley, REC director of Policy, said: “With fewer people currently looking for jobs, employers are having to increase starting salaries to secure the talent they need. This is creating great opportunities for people with in-demand skills who are prepared to change jobs, but it’s also putting unsustainable pressure on many businesses.”

There was also marked regional variation in the skills shortage and growth of placements, with the sharpest growth for permanent roles reported in Scotland and the Midlands. Scotland also saw the strongest upturn in temp roles.

The weakest rate of expansion was in London, but all remaining regions reported varying rates of expansion.

Demand for staff increased across both the public and private sector, and in all monitored industries. The number of permanent placements rose the fastest in the engineering sector, followed by accounting and financial sectors. Demand for temporary placements rose the fastest in the hotel and catering industry.

According to Hadley, the skills gap is being exacerbated by Brexit; for example, the demand for accountants and financial roles has increased as businesses seek experts to help them mitigate the risks of an uncertain economy. Policies which make it harder to recruit EU nationals are putting business growth at further risk.
  
“Investment in training the domestic workforce is vital to the long-term health of the jobs market, but it won’t allay employers’ fears about losing access to workers from the EU. The government needs to outline a five-year roadmap for post-Brexit immigration policy to enable businesses to plan effectively, and so the UK economy can flourish,” said Hadley.

In order to combat the UK’s skills crisis, the government has a target of creating 3 million apprenticeships by 2020. Apprenticeships allow school leavers to train on the job while getting paid.

There are many organisations involved in helping to reach this target, which can be found on the website, www.notgoingtouni.co.uk.

This article is part of a wider campaign called the Scale-up Hub, a section of Real Business that provides essential advice and inspiration on taking your business to the next level. It’s produced in association with webexpenses and webonboarding, a fast-growing global organisation that provides cloud-based software services that automate expenses management and streamline the employee onboarding process.

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About Author

Letitia Booty

Letitia Booty is a special projects journalist for Real Business. She has a BA in english literature from the University of East Anglia, and since graduating she has written for a variety of trade titles. Most recently, she was a reporter at SME magazine.

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