‘War on talent’ continues – record rise in salaries

The “war on talent” shows no signs of slowing as the region saw a record rise in starting salaries last month.

The latest KPMG and REC, UK Report on Jobs: Midlands highlighted a record rise in both permanent starting salaries and hourly wages for temporary staff in November, amid a combination of sharp and sustained growth in demand for staff and a further marked deterioration in the supply of candidates.

A further steep expansion in permanent placements was also recorded, and one that was the sharpest since June’s series record.

The rate of growth in permanent placements quickened midway through the fourth quarter of the year. The increase was rapid overall and the sharpest seen since June’s survey record. Recruitment consultancies indicated that placements had risen following stronger demand from clients for permanent staff amid sustained shortages.

November data pointed to a continued increase in temporary billings.

Permanent salaries for new joiners increased at the fastest pace in the survey’s history in November, with the rate of inflation surpassing the previous record set in October.

A combination of rising demand for staff and a lack of suitable candidates was behind the increase in permanent salaries.

The rise in permanent salaries in the Midlands was the sharpest of the four English regions covered.

As was the case with permanent starting salaries, pay rates for temporary staff rose sharply during November. The rate of inflation was the strongest since the survey began in October 1997.

Kate Holt, people consulting partner at KPMG, said: “The rate of sustained salary growth across the region suggests that the war on talent shows no signs of abating as businesses continue to look for people with the right skills. The demand and supply imbalance, however, is not going to change overnight, and while January typically is a busier month for jobseekers, it won’t tackle the bigger issue, which is essentially skills. If we address this issue, then pressures will begin to ease, but effort is required of all to look at how to identify and maximise on transferable skills, as well as upskilling and reskilling.”

Neil Carberry, chief executive at the REC, said: “Today’s figures emphasise again how far we have come this year – it is certainly a great Christmas if you’re looking for a job. This is always the busiest part of the year for recruiters, but demand for new staff across the autumn has been exceptional. Because of this high demand, starting salaries and temp rates continue to rise, making it even more attractive to be looking for a new opportunity in 2022. Hiring companies will need to make sure they get their offer right – not just on pay – and take an inclusive approach if they are to avoid losing out.”