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Hiring Rate Slows Amid Growing Skill Shortage

Publish on 11:32 05/Dec/2014

The shortage of skilled labour is becoming more acute as firms hired staff at the slowest rate for 18-months in November, a report has warned.

The monthly Recruitment and Employment Confederation (REC) and KPMG survey pointed to uncertainty over the European economic outlook and looming UK General Election for the slowdown.

But the report also said that while starting salaries have continued to increase, this was being part-driven by a shortage of skilled labour.

REC chief executive Kevin Green said: "Over a quarter of recruiters say that starting salaries for equivalent jobs are getting better by the month, driven by competition between employers for quality candidates.

"If there's a cloud on the horizon for 2015 it's the intensifying skills shortages which now spans many sectors and is particularly acute in high-skilled areas like engineering, IT and medicine.

"It's not just about graduates, vacancies for skilled manual jobs are getting harder to fill as well.

"The shortage of licensed HGV drivers and forklift operators could mean retailers struggle to meet the Christmas demand generated by Cyber Monday and eager shoppers on the high streets."

The unemployment rate currently stands at 6% and the Bank of England, which is looking for firm wage increases in the economy before deciding if it will raise the base rate of interest, is forecasting the jobless total to continue falling next year.

Higher wages are also essential to drive the forecast recovery in weak tax receipts included in the chancellor George Osborne's Autumn Statement.