UK businesses raising pay due to skill shortages - CIPD
British businesses are raising wages by the most in the past seven years as it becomes increasingly difficult finding enough skilled workers due to Brexit.
A new quarterly survey by the Chartered Institute of Personnel and Development based on responses from 1,254 employers revealed that the net employment balance stood at +20 for Q4 2018. This continued a downward trend from this time last year, when it stood at +26 points.
Key indicators suggest increased pressure on recruitment this quarter with seven in ten (71%) employers with vacancies saying they were finding it complicated to fill. This number has risen from 64% in the same period the year before.
Regarding wages growth, after seven years of an increase of 2%, the median expected basic pay increase in the private sector has risen to 2.5%.
At the same time, the expected basic pay increase in the public sector has fallen to just 1.1%, “driving a wedge between the two sectors” said the CIPD.
“The private sector is much more willing to spend money to tackle recruitment and retention problems”, said the report. This is also due to the fact that public sector employers are limited and have a pay restraint.
Of those private sector employers with recruitment difficulties, 66% have increased starting salaries, up from 56% in the previous quarter.