U.K. Jobs Boom Sends New Hire Pay Up by Most in Almost Two Years

U.K. starting salaries climbed by the most since October 2015 last month, boosted by a shortage of available workers in the midst of a hiring boom.

Vacancies rose at the quickest rate for 28 months in August, IHS Markit and the Recruitment and Employment Confederation said Friday, while the number of people placed into roles grew at the second-steepest rate since April 2015. The availability of workers continued to decline sharply, exacerbated by a fall in net migration from the European Union.

“In many areas of the jobs market candidate supply cannot meet demand,” said Kevin Green, chief executive of REC. “Employers are having to offer more money to secure the people with the skills they need.”

Soaring pay packets for new starters are a rare piece of good news for U.K. employees, who have seen average wage growth lag behind a surge in price growth driven by the pound’s decline since the Brexit vote. Real incomes were 0.5 percent lower than a year earlier in the second quarter, according to the Office for National Statistics, despite unemployment sitting at a four-decade low.

The report also showed temporary worker pay rose at the steepest rate in 16 months, while there was a “significant shortage” of people to fill blue collar roles such as drivers, electricians and construction workers, according to Green.

Demand in London continues to be subdued despite high demand for roles like financial directors and analysts, with recruitment in the capital the slowest of all regions.
Source: Bloomberg