Shortage of skilled workers drags down UK jobs market, driving up pay inflation

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Engineers, nurses and construction workers are in short supply, depressing the growth in the UK labour market.

The UK jobs market stagnated in June, fuelling fears of a major skills shortage that could limit the economy’s ability to grow and flourish.

Hiring activity is being constrained by a lack of candidates. A new report on the UK labour market found, with the number of permanent positions filled by jobseekers slowing to the lowest rate for two years.

Recruiters have warned of ongoing shortages of certain professionals. Engineers, nurses, doctors, IT professionals, construction workers and accountants are in short supply across both temporary and permanent roles.

The shortage of skilled workers drove up pay inflation last month, well above the survey’s historical trend in June. “The construction industry’s weekly earnings jumped up month on month,” said Ingrid Waterfield, a director at KPMG. “You have your pick of jobs if you’re skilled in a high-demand profession.”

Most sought-after roles in June 2015

Engineering 
2 Executive/Professional
3 Nursing/Medical/Care
4 IT & Computing
5 Accounting/Financial
6 Secretarial/Clerical
7 Blue Collar
8 Construction
9 Hotel & Catering

The Recruitment and Employment Confederation and KPMG, warned that the current “unwanted pause in recruitment” could hamper the UK economy’s ability to grow, and drag on the nation’s productivity.

“This could be the start of something worrying,” said Ms Waterfield. “It will – without a doubt – start impacting upon the ability of organisations to grow.”

According to Ms Waterfield, the lethargy in the job market has been caused by a number of contributing factors. “Organisations realise that there are skills shortages so they are looking to retain their employees and stop them going elsewhere,” . “They are looking beyond salary and bonus and finding new and innovative ways to make them stay.”

The job market also tends to slow down during the summer months because people presume that hiring will be put on pause until after summer holidays.

 

The impact of the fresh crop of graduates on the labour market is also unlikely to be felt for another month, Ms Waterfield said.

“Many of those graduates who have yet to secure a job only have their results now and won’t start looking for another month.”

A separate survey from Accenture said that 72pc of 2015 graduates expect to find a full-time job and the majority believe they will earn more than £19,000 a year in their first placement.

Ms Waterfield said that there was a need for greater communication between the recruitment and education sectors to try to encourage more young people to learn sought-after skills.

“I don’t see education picking up on these issues and sharing the top opportunities with kids at an early enough age to redress the skills balance,” she said.

“If I had young kids, I know what subjects I would be recommending they consider.”

 

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Source: The telegraph

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