Storm clouds hang over thriving UK jobs market
A report by the Recruitment and Employment Confederation (REC) has warned of “serious threats” to the UK jobs market despite positive results for the sector as a whole.
The jobs market is booming, with increasing job placements, pay and vacancies. Starting salaries for newly recruited permanent staff, for example, have risen throughout February at the fastest rate in three months.
However, the same report, which surveyed 400 recruitment companies, also showed that pay growth for temporary workers was at its worst level for nearly three years.
However, a report by REC points out that, with George Osborne’s budget due next week and the EU referendum set to take place in June, the market is at a “critical juncture”.
Kevin Green, REC chief executive, said:
“The UK labour market is at a critical juncture. Permanent hiring improved last month, demand for staff remains strong, and pay is going in the right direction, but serious threats are looming just around the corner.
“Next week, the chancellor will announce his plans for the coming financial year, at a time when recruiters across the country are reporting serious skills shortages alongside buoyant jobs growth. The introduction of the national living wage on 1 April 2016, closely followed by tax changes on 6 April 2016, will disrupt hiring strategies for many businesses.
“Employers will seek to offset rising wage bills, for example by scaling back recruitment and increasing automation. This could weaken future demand for staff. In June, the EU referendum carries a very real risk that business confidence will be curtailed and investment in hiring could falter.”
Responding to the REC report, employment minister Priti Patel said:
“This country’s jobs market is in excellent shape, with the employment rate at its highest ever level, a record 776,000 vacancies available across the country and pay continuing to rise.
“Next month the national living wage will give Britons a well-deserved pay rise, and by increasing childcare support, and creating three million more apprenticeships, our commitment to giving everyone a chance to benefit from our growing economy is plain for all to see.”
