Big pay rises for UK workers changing jobs amid deepening labour shortage

Workers moving to new jobs saw big pay rises in December as firms battled for staff, amid a nationwide labour shortage, new figures show.

Starting salaries for both temporary band permanent staff rose rapidly in December, the Recruitment and Employment Confederation (REC) found.

The group, which represents recruitment firms, said rates of pay inflation were close to record levels as demand for staff continued to outstrip supply.

The REC polled around 400 recruitment consultancies, with respondents reporting “substantial increases” in both permanent and temporary placements.

IT & computing was the most in-demand category for permanent staff during December, continuing a trend from the previous month. Steep increases in vacancies were also seen across the other nine sectors tracked by the survey.

Behaviour changes prompted by the pandemic such as spending more time shopping online and working remotely have caused an increase in demand for IT workers.

Covid has also put huge strain on overstretched health services, deepening a recruitment shortage of skilled workers. Nursing, medical and care were at the top of the REC’s rankings for temporary staff vacancies.

Vacancy rates across the UK economy are at record levels, according to the latest official data. The government has been urged to change post-Brexit immigration rules to allow in more workers with the skills required.

Neil Carberry, chief executive of the REC, said: “2022 will be the year we discover staff shortages will outlive the pandemic as an economic issue. This survey shows again how tight the labour market was at the end of last year.

“Demand for staff is growing across every sector and region of the UK, and candidate availability is still falling. These trends have been slowing for the past few months, but that is not surprising considering the record pace of change earlier in the autumn of 2021.”

Claire Warnes, head of education, skills and productivity at KPMG UK, said: “The UK jobs market rocketed to near historic levels as New Year approached. That’s despite it losing a little fizz with the pace of accelerating demand for staff, wage and salary growth and vacancies all easing slightly.

“Employers in all sectors haven’t lost their appetite to hire, but many will be frustrated by the pressure these inflationary and competitive conditions, which are likely to continue for some time, are putting on their operating costs and ability to expand.”