Skill shortages still apparent in UK labour market

Ongoing skill shortages drove a further increase in staff salaries in the UK, although pay inflation has remained well below July’s nine-year peak, according to a new survey.

As skill shortages remained apparent The availability of candidates to fill job vacancies was found to have deteriorated again in October, with consultants identifying skill shortages across a range of professions.

October’s Report on Jobs, from the Recruitment and Employment Federation and KPMG, provides a guide to the UK labour market, drawing on survey data provided by recruitment consultancies and employers.

“Immigration is an essential component of the modern jobs market but concern over its current management has undermined the positive contribution that migrant workers make to the economy.

Helen Reynolds, acting chief executive officer, Recruitment and Employment Confederation

Commenting on the latest survey results, Alan Nolan, Director at KPMG said: ‘The credit crunch begins to casts its shadow over the job market with the lowest growth in permanent placements for thirteen months and the slowest pace for demand in permanent staff for seventeen months. If this trend continues we may see job losses across the sectors which are particularly volatile. Where job losses are required it is paramount for employers to plan their termination payment programmes effectively to avoid tax and legal pitfalls. Employers should also take the opportunities now to look at how they can reduce their employment costs to minimise the number of job losses and impact of the credit crunch.’

Helen Reynolds, acting chief executive officer, Recruitment and Employment Confederation (REC) commented: ‘There has been much discussion recently on the rising number of migrant workers coming to the UK but this has largely focused on the negatives. If the current skills shortage is to be met, it is vital, at least in the short term, that we continue to source overseas workers from the EU and beyond.’

She added: ‘Immigration is an essential component of the modern jobs market but concern over its current management has undermined the positive contribution that migrant workers make to the economy. With the Report on Jobs highlighting skills shortages month on month, it is essential that the positive impact of immigration is recognised and that any measures to restrict immigration do not adversely affect the businesses that are using this vital source of labour to grow and expand.’