Starting salaries on the increase, KPMG & REC Report
Posted on Thursday, February 10, 2022 by Barbara Robertson — No comments
The UK labour market continues to be challenging, we continue to see high demand for candidates and the vacancy rate is still sharply higher than last year. The pressure on employers to increase starting salaries can now be seen, as the best candidates have more options available to them. See the highlights below:
- Starting salary inflation remains close to record pace
Robust demand for staff and candidate scarcity drove up rates of starting pay for both permanent and temporary staff at the start of the year. Starting salaries rose at the third-sharpest rate on record (since October 1997), beaten only by those seen last October and November.
- Quicker fall in overall supply of candidates
The rate of decline in overall candidate availability quickened for the first time in five months in January. Though not as steep as those seen during last summer, the rate of deterioration remained substantial overall. The downturn was driven by a quicker drop in permanent staff supply, as temp candidate numbers fell at a softer pace.
- Vacancy growth eases, but remains historically sharp
Demand for staff continued to rise at a historically sharp pace in January, despite growth of overall vacancies edging down to a nine-month low. Underlying data showed that the softer upturn was due to a weaker rise in permanent staff demand, as short-term vacancies expanded at a quicker rate.
Commenting on the latest survey results, Neil Carberry, Chief Executive of the REC, said: "With competition for staff still hot, companies are having to raise pay rates for new starters to attract the best people. And the cost of living crisis means there is also more pressure from jobseekers who want a pay rise. But pay is not the only important factor - companies must think about all aspects of their offer to candidates to ensure they get the staff they need."
Employers need to be mindful of the cost to their businesses when vacancies remain open to long, or recruitment fails because salaries are not competitive. Total packages are still being considered by candidates, but a strong salary with favourable working conditions are still the leading candidate motivators.
Full report here: https://home.kpmg/uk/en/home/media/press-releases/2021/10/kpmg-and-rec--uk-report-on-jobs.html