Increasing pay might not be enough to tempt people away from their current job and into a new position according to new report on labour market
By Alan Tovey, Jobs Editor
5:59AM GMT 08 Nov 2013
Just ramping up wages to attract top talent might not be enough to tempt staff
away from their current jobs, judging by the results of a respected labour market survey.
The Recruitment and Employment Confederation (REC) and KPMG monthly report on jobs has revealed that October saw starting salaries for those going into permanent jobs rise at their fastest rate in nearly six years, and vacancy rates for both temporary and permanent positions increase at the greatest pace since June 2007.
The situation was compounded by a growing shortage of qualified jobseekers, with the survey reporting the number of candiates for positions dropping at the fastest rates in about six years.
Bernard Brown, head of business services at the report’s co-author KPMG, said the data suggest employers looking for new staff will have to be creative in how they lure staff away from the current companies.
“A question that must be addressed revolves around whether increasing salaries is enough to entice job hunters to move between organisations. All the evidence suggests not, with permanent and temporary staff availability falling in recent months.
“It means employers cannot rely on wages alone as a hook to attract top talent. The time has come for them to develop a raft of offers as part of the overall remuneration package.
And he warned: “If they fail to do so, they will struggle to recruit and bring their organisation back to pre-downturn levels.”
While researching the study, the report’s authors also noted anecdotal evidence of companies that are hiring being more confident, and making faster decisions. Traditionally this is a sign of them not wanting to risk losing promising candidates for jobs to competitors so they act quickly, a sign of the positive direction the labour market is moving in.
Mr Brown said the Government would welcome the report’s findings as a sign of the strengthening economy, but urged policy-makers not to become complacent.
“Whilst this is a sure sign of economic recovery, we must not get complacent because, in the higher earning bracket, left unchecked wage inflation will bring different challenges to businesses who strive for profitable growth,” he said.
Kevin Green, REC chief executive, said: “This is another month of growth for both temporary and permanent jobs, in all regions, in all sectors and across both the private and public sectors.
“The real good news for workers is that starting salaries have risen at the sharpest rate in six years – however this is the result of a six-year low in the availability of staff to fill the number of jobs available.
“The skills shortage shows no signs of abating and although it is starting to drive wages up there is a real danger that it could cause serious damage to future economic growth in the UK.
“Recruiters are also telling us that the hiring process is starting to pick up speed as employer confidence returns, which should lead to greater fluidity returning to the jobs market and greater opportunities for those looking to enter the jobs market or make the next step up in their career.”
Anther of the report’s findings was that the Midlands again posted the strongest growth in temporary jobs, and the South the slowest.