UK starting salaries on the increase

Starting salaries for UK employees grew at the fastest rate in March for six months; the strongest increase since last autumn.

That’s according to a new jobs market study by the Recruitment and Employment Confederation (REC) and professional services firm KPMG.

Continuing staff placements also coincided with wage increases for new starters, as the number of vacancies across the UK reached a five-month high in March.

The study suggests permanent staff are the biggest beneficiaries of the starting salary rise, with hourly rates for temporary and contract positions increasing at a slower pace in March than the previous month.

However, figures indicate a shortage of talent on the jobs market, as the supply of candidates to employers fell at the sharpest rate in four months; while the availability of temporary staff declined at the fastest rate since October 2014.

Kevin Green, chief executive, REC, said: “Almost a third of recruiters say that starting salaries have increased in comparison to last month, and we’ve seen another increase in the number of people that have found a new job via a recruiter.

“This suggests that labour market fluidity is returning – candidates are more confident about looking for work, and there are opportunities to earn more for those that do.

“Employers need to realise that people are deciding to change jobs because they can earn more than in their current job.

“Increase in starting salary offers are being driven by skills and talent shortages across the economy, and businesses are going to have to think hard about retaining scarce resource.

“As politicians debate skills, education and immigration in the run up to the election, we hope they recognise the potential impact of this skills crisis, because a lack of workers to meet demand threatens the sustainability of our economic growth.”

Date published 5 May 2015 | Last updated 1 May 2015