(Bloomberg) -- Demand for staff in the U.K., driven by a lack of applicants for jobs, led to a record pay increase for workers starting new jobs in October.
The Recruitment & Employment Confederation and KPMG, whose survey of 400 recruiters and employment consultancies is a closely-watched indicator of the labor market, found that candidate availability dropped at one of the fastest paces on record in the report's 24 year-history. That drove a record increase in starting pay during the same period.
The figures add to evidence of tightness in the labor market that's adding to concerns about inflation at the Bank of England. The central bank held off on raising interest rates on Thursday but said it's watching for signs of price pressures bedding into demands for higher pay.
The REC findings add to evidence about a mismatch between the record number of vacancies on offer and the skills of workers who became unemployed during the pandemic. Britain's pool of available workers has shrunk because of a lack of staff from other countries, REC said.
“Employees are hesitant to switch roles and sectors, which could impact the bounce back recruiters have experienced since the easing of pandemic restrictions,” said Claire Warnes, head of education, skills and productivity at KPMG. She added that while companies were offering higher salaries to attract talent, “this isn't the answer to boosting productivity.”
The survey, released Friday, also showed:
- Hotels and catering companies had the steepest rise in demand for permanent staff in October; retail had the weakest
- Vacancies continued to rise more sharply in the private than public sector
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