Median pay expectations in the 12 months to June 2019 remain at just two per cent, according to the latest quarterly Labour Market Outlook from the CIPD and The Adecco Group.
The survey of 2,001 employers revealed that the squeeze on pay is having a clear impact on pay decisions. A little over half of organisations that have experienced difficulty in recruiting staff during the past 12 months have increased starting salaries as a result. A quarter had done so for the majority of vacancies and 28 per cent had done so for a minority of vacancies.
Employers have also experienced difficulties in retaining staff over the past 12 months. The survey found that 55 per cent of employers have increased salaries, with 30 per cent raising pay for the majority of staff and 25 per cent doing so for key staff only. Around 40 per cent of employers has not increased salaries at all in response to rising retention difficulties, highlighting wider productivity challenges and cost pressures.
Gerwyn Davies, senior labour market analyst for the CIPD, the professional body for HR and people development, explained that the most recent official data shows that there has been a significant slowdown in the number of EU nationals coming to work in the UK over the past year. This is feeding into increasing recruitment and retention challenges.
“With skills and labour shortages set to worsen further against the backdrop of rising talk of a ‘no deal’ outcome with the EU, the need for the government to issue consistent, categorical assurances about the status of current and future EU citizens, whatever the outcome of the negotiations, is more important now than ever.”
Alex Fleming, Country Head and President of Staffing and Solutions, The Adecco Group UK and Ireland, added: “Retention remains key; it is imperative that employers develop and promote their staff so they don’t fall short and feel the impact of the dwindling growth of the UK’s talent pool.”
