LONDON (Reuters) – UK employers face worst shortage of job applicants on record due to post-containment economic push and Brexit, pushing starting salaries for permanent staff up at an unprecedented rate , said a recruiting agency.
In a survey that will be studied by the Bank of England as it assesses the risk of a longer-term inflation problem, the Recruitment and Employment Confederation (REC) said employers were increasingly more optimistic about the outlook for August.
But their attempts to hire staff were thwarted by understaffing. BoE Governor Andrew Bailey said on Wednesday he was concerned about filling posts.
REC said a reluctance by employees to change jobs due to the pandemic, fewer European Union workers and skills shortages were contributing to the downsizing.
“The shortage of candidates continues to weigh on companies, which all recruit from the same talent pool and struggle to fill in the gaps,” said Claire Warnes, head of education, skills and productivity at KPMG UK, which is co-producing the survey.
The rate of recruitment for permanent posts last month reached the highest in the nearly 24-year history of the survey. Temporary hiring and vacancies were not far from the peak levels of July.
Salaries for new permanent employees have increased at the fastest rate on record. Wage inflation for temporary workers was the second fastest.
Warnes said the expiration of the government’s leave program at the end of this month does not mean the staff “crisis” will go away as more people become available for work.
“Many companies will have changed their business model during the pandemic, and a significant number of employees returning from leave may need retraining to join the workforce in the same sector or in another”, a- she declared.
Separately, UK Chambers of Commerce have said staff shortages and global supply chain disruptions after the lockdown are likely to slow Britain’s economic growth in the coming months.
This meant that the economy would not return to its pre-pandemic size until the first quarter of 2022, later than the BoE’s prediction for the last quarter of 2021, the BCC said.
Business investment was likely to decline this year as the blow to corporate finances from the pandemic, higher tax bills and concerns over future COVID restrictions outweigh the impetus for a tax incentive announced by Minister of Finance Rishi Sunak.
The BCC said business investment would be 5.4% lower than its pre-pandemic level at the end of 2023, while consumer spending is expected to be 5.1% higher.
“It is concerning that business investment appears to be the weak point of the recovery as it is undermining the UK’s ability to increase productivity and boost our long-term growth prospects,” said Suren Thiru, chief economic officer. of the BCC.
(Written by William Schomberg, edited by Andy Bruce)