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Market driving wages higher
Pressure on pay are rising as unemployment continues to fall, the economy grows faster and more companies report shortages of skilled staff. Government figures now show that average earnings are now growing at their fastest rate for three years, helped by a resurgence in City bonuses and public sector pay growth.
Private sector pay rises remain under tighter control but he Daily Telegraph-Reward index reflects growing concern among employers that current trends may be short-lived. Companies fear they will have to open the purse stings further to head off labour shortages. Both basic and total pay rose by 2.3pc, a marked reduction on the January figure of 2.9pc. At clerical level basic pay grew by 3pc compared with 3.7pc in January as a result of the generous rises and the comparison with the same period last year when pay was rising at a faster rate. A similar pattern is developing among operatives, where the marked slowdown has resulted in the annual increase in basic pay slipping from 2.8pc in January to 1.9pc last month. Basic earnings for managers continue to hover around the 2pc mark. Base pay is up to 2pc against 2.2pc in January, while total earnings rose by 2.2pc in the period to March.
The figures suggest companies have succeeded in keeping a lid on rises but research by Reward analysis suggests the going is getting tougher. Questionnaires showed almost half of responding companies struggling against skill shortages and a tighter labour market. Steve Flather, managing director of Croner Reward, said: "Historically skill shortages have been considerably lower but these replies suggest that the current low level of earnings movement may show a faster acceleration in the next few months.
This pressure on pay will inevitably lead to increased competition for ‘skilled’ staff and a return to a candidate driven market. In turn this will need an increasingly co-ordinated recruitment process to ensure not only adequate identification and supply of the calibre of staff, but also a professional, end-to-end solution to ensure once identified, they are successfully acquired. Redline’s experience covers 1,000’s of successful campaigns within the technology based sector, across all disciplines, and is built around a pro-active approach and total support structure. Call us on 01582 450054 or email info@Redlineplc.com for further details
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