Brexit Staff Shortages Drive Starting Salaries Higher, REC Says

(Bloomberg) -- A Brexit-driven decline in the availability of staff and surging demand for workers are pushing up starting salaries, according to Markit and the Recruitment and Employment Confederation.

The availability of permanent candidates declined at the fastest pace in four months in September, according to a report published Friday. Net migration to the U.K. has fallen to a three-year low after an exodus of European workers following the decision to leave the European Union.

“The record-high U.K. employment rate plus a slowdown in the number of EU nationals coming to work here is exacerbating the situation, potentially leaving roles unfilled,” said Kevin Green, REC chief executive officer. “Recruiters are finding it even harder to find people to fill vacancies.”

Restaurants, warehouses and supermarkets are experiencing particular difficulties since they employ a higher proportion of people from the EU. The government should ensure any new immigration system includes low-skilled and temporary workers so that workers can fill the jobs required, the REC said.

The financial sector is struggling to recruit for roles in audit, risk and payroll, according to the report.

Unemployment is now at 4.3 percent, below the rate at which the Bank of England says will start fanning wage gains. Governor Mark Carney said in a speech last month that Brexit could cause “abrupt decreases in migration” in the short term, causing labor shortages in some sectors and contributing “more materially to inflationary pressures.”

To contact the reporter on this story: Jill Ward in London at jward98@bloomberg.net.

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Brian Swint, Andrew Atkinson