Demand for talent to boost wage pressures on UK employers Demand for talent to boost wage pressures on UK employers

Demand for talent to boost wage pressures on UK employers
23 May 2018

Wage pressures may be increasing for employers, the Chartered Institute of Personnel and Development (CIPD) has warned, as it predicted strong growth in demand for talent in the second quarter of 2018 

The HR body’s latest Labour Market Outlook revealed that during the last quarter the net employment balance – the difference between the proportion of employers who expect to staff levels to increase and decrease in the next three months – rose from +16 to +26.

It suggested that employers may have been reassured by recent announcements that the UK’s existing trading arrangements and freedom of movement will continue during the Brexit transition, and that European Union nationals who arrive during that time will be able to stay in the UK indefinitely.

But while employment growth intentions are strong, the number of vacancies in the UK economy remains well above the historic average, which could see pressure grow on employers to offer higher wages.

Gerwyn Davies, the CIPS’s senior labour market analyst, said: "There needs to be a mix of attracting new and diverse talent as well as upskilling existing staff. In particular, organisations must put much more effort into attracting and retaining older workers, women returning to work after having children, and other disadvantaged groups in the labour market, as well as investing in training and developing their existing workers.”

According to HR Magazine, Alex Fleming, president and country head for recruitment consultancy Adecco Group UK and Ireland, urged employers to take advantage of the fact that pay is no longer a priority for many prospective employees.

"Employers have more than one weapon in their arsenal. Elements such as flexible working, modern workspaces, collaborative office spaces and inspiring management are all attractive to different segments of the labour market," she said. "It is time for employers to recognise talent as individuals and tailor employment packages accordingly to avoid missing out on key skills that will drive innovation and success."

The latest Consumer Price Inflation (CPI) figures show that pay is already increasing 

Jacob Deppe, head of trading at online trading platform Infinox, said: "With average wages rising by 2.8% in February and Consumer Price Inflation falling to 2.5% in March, the squeeze on household incomes looks to be finally coming to an end. But the double dose of good news might be short lived. Wage rises are themselves inflationary and if they continue to rise the knock-on effect will be that CPI ticks back up again in the months ahead."

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

Wage pressures may be increasing for employers, the Chartered Institute of Personnel and Development (CIPD) has warned, as it predicted strong growth in demand for talent in the second quarter of 2018 

The HR body’s latest Labour Market Outlook revealed that during the last quarter the net employment balance – the difference between the proportion of employers who expect to staff levels to increase and decrease in the next three months – rose from +16 to +26.

It suggested that employers may have been reassured by recent announcements that the UK’s existing trading arrangements and freedom of movement will continue during the Brexit transition, and that European Union nationals who arrive during that time will be able to stay in the UK indefinitely.

But while employment growth intentions are strong, the number of vacancies in the UK economy remains well above the historic average, which could see pressure grow on employers to offer higher wages.

Gerwyn Davies, the CIPS’s senior labour market analyst, said: "There needs to be a mix of attracting new and diverse talent as well as upskilling existing staff. In particular, organisations must put much more effort into attracting and retaining older workers, women returning to work after having children, and other disadvantaged groups in the labour market, as well as investing in training and developing their existing workers.”

According to HR Magazine, Alex Fleming, president and country head for recruitment consultancy Adecco Group UK and Ireland, urged employers to take advantage of the fact that pay is no longer a priority for many prospective employees.

"Employers have more than one weapon in their arsenal. Elements such as flexible working, modern workspaces, collaborative office spaces and inspiring management are all attractive to different segments of the labour market," she said. "It is time for employers to recognise talent as individuals and tailor employment packages accordingly to avoid missing out on key skills that will drive innovation and success."

The latest Consumer Price Inflation (CPI) figures show that pay is already increasing 

Jacob Deppe, head of trading at online trading platform Infinox, said: "With average wages rising by 2.8% in February and Consumer Price Inflation falling to 2.5% in March, the squeeze on household incomes looks to be finally coming to an end. But the double dose of good news might be short lived. Wage rises are themselves inflationary and if they continue to rise the knock-on effect will be that CPI ticks back up again in the months ahead."

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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