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- KPMG says starting salaries offered by UK firms have increased sharply as firms fight for staff.
- Its UK Jobs Report monitors the vacancies and sentiment among UK recruiters.
- The coronavirus, as well as Brexit and low unemployment have made recruiting competitive.
- See more stories on Insider's business page.
If it's a good time to be in the job market, that means it's a bad time to be looking for staff.
Starting salaries on offer in in the UK have increased dramatically in July, according to data gathered by KPMG, potentially reflecting an ongoing labor shortage in certain industries.
The consultancy firm has been monitoring vacancies and supply in the job market in conjunction with the Recruitment and Employment Federation, which represents the UK recruitment industry, since 1997.
Its monthly UK Jobs Report collects responses from 400 recruitment agencies around the UK, so can't be classed as official figures, but gives a good insight into the general sentiment among recruiters, and the problems firms face.
The report monitors 10 job categories: executive/professional, nursing/medical/care, hotel/catering, blue collar, secretarial, accounting/financial, engineering, IT/computing, retail, and construction.
The indices upon which KPMG bases its data vary between 0 and 100. Any reading above 50 indicates an overall increase compared to the previous month. Any below 50 is a decrease. The data is also seasonally adjusted.
It showed that the July rate of salary inflation was the highest seen for 24 years, as companies were forced to offer higher wages amid a shortage of talent.
Permanent salaries and temporary salaries increased to an index rate of 73.2 and 66.7, from 66 and 61.6 in June respectively.
The data also showed a general increase in vacancies across the board - rising from 74.5 to 75.2 for permanent staff. Particularly among construction, hospitality, and blue collar roles.
The reasons, and the exact figures of growth are abundantly not clear, but like many sectors in the US, British businesses have seen existing talent shortages amplified by the pandemic.
Brexit has compounded the problem in the UK, severing the tap of seasonal workers from Europe that many industries rely on for labor. Low unemployment rates in the UK - of 4.8% according the government figures - have also made it increasingly competitive for businesses seeking to recruit.
In July a survey published by the British Chamber of Commerce, which represents employers from a variety of industries, indicated that 70% of companies had been struggling to recruit staff - an increase from just over half since mid-2020. Again among those most struggling were hospitality and construction.
Before UK coronavirus restrictions were lifted on July 21, UK Hospitality, which represents employers in restaurants, bars and hotels estimated that the industry faced a shortfall of 188,000 workers.
Companies across all sectors are going to extra lengths to attract or retain workers, turning increasingly to temporary workers and increasing pay.
Amid a shortage of drivers, British retailer John Lewis announced its truckers would receive a £2 hourly pay increase. Grocery giant Tesco is among one of many retailers also offering welcome bonuses.
And mental healthcare provider Elysium is offering a £5,000 bonus to trained mental health nurses who join, according to The Guardian.
Sean Keyes, the managing director of UK civil and structural engineering firm Sutcliffe, told Insider that amid a crisis that has seen the sector lose as many as 10% of its workforce, his firm was turning to developing "rough diamonds" through apprenticeship schemes. It's also offering more flexible hours to older staff, who are increasingly favoring early retirement.
"The older generation also wants to feel like they are wanted and we have ensured that our older employees can cut back on their hours and times, so they can feel like they can still commit 100%, but still focus on their life away from the office," he said.