Wage inflation in the UK will take off due to limited skill shortages

November 07, 2015
According to the research report from The Chartered Institute of Personnel and Development (CIPD), it has been revealed that the inflation of wage will likely to take off in next year because of limited shortages of skills and the limited and restrained pay settlements that has been forecasted by the employers.

The survey made on over 1000 employers has revealed that around all the sectors, only 15% of the recent job vacancies has been filled that too with much difficulty. It has also been revealed that the employers in the UK are recruiting the workers without importantly raising their wages and the basic pay hike will just be around 2% in a year till September 2016 as predicted by the employers.
Wage inflation in the UK will take off due to limited skill shortages

According to the analyst of labour market, UK is facing the shortage of skills minimizing the employers ability to ease their problem of recruitment. Many employers are providing many job offers for the young generation through some apprenticeships and many other employers are using the foreign migrant workers for increasing their defence against the tightening labour market.

The Labour Market Outlook discover that the applicant numbers for each vacancy has remained stable over the previous year with average count of applications which was 25 for low skilled, 15 for medium skilled and 8 for the high skilled jobs.

Many businesses are witnessing the stable flow of potential candidates despite of unemployment rate dropping to seven-year low in the month of October, and despite of yearly increase in the number of employers (44-49%) that are reporting any vacancies which are hard to fill. 

The employers response to the hard filling vacancies were around 48% for up skilled current staff, hiring additional apprentices which was at 27%, recruitment of foreign migrant workers at 23% and hiking the starting salaries for hard-filled positions was stood at 22%.

According to the labour market analysis, in some areas, shortage of skills remains much acute, and those employers who are struggling to fill up the vacancies shall think creatively about up-skilling the workforce.

They also said that the government has an distinct role to play for ensuring that the policy do not compound any of the shortage of skills, especially when it is related to immigration where more limitations on the foreign migrant workers are set to be introduced.

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