London Leads Drop in Supply of Workers Amid Brexit Uncertainty

(Bloomberg) -- Employers in London are having trouble finding staff, and Brexit may make it even harder.

London posted the fastest drop in supply of workers in 15 months, according to a monthly survey by IHS Markit and the Recruitment & Employment Confederation. Nationally, firms also reported difficulty in getting workers, particularly in finance and information technology, resulting in full-time starting salaries rising “sharply.”

While the Bank of England estimates there's more slack in the labor market than previously envisaged -- and that wages will therefore stay relatively subdued -- the survey suggests pay pressure may be rising in some industries. Hiring is “rapidly becoming employers' biggest headache” and may be exacerbated by Britain's decision to exit the European Union, said REC Chief Executive Officer Kevin Green.
 
“Our concern is that Brexit will make the problem worse, particularly if onerous restrictions are imposed on people coming from the EU to work,” Green said. “Also, economic uncertainty about future prospects is having a detrimental effect on employees' willingness to risk a career move.”

The survey found the number of people placed in permanent jobs rose at a slower pace in March compared with a 12-month high the previous month, while growth in temporary and contract staff billing picked up. Demand for staff held close to an 18-month high, the report showed.

To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net.

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Brian Swint, Fergal O'Brien