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Employers struggling to hire staff as migrants turn their back on UK

By Abigail Townsend

Date: Monday 12 Nov 2018

Employers struggling to hire staff as migrants turn their back on UK

(Sharecast News) - Employers are battling to hire enough staff after a sudden decline in the number of migrants coming to the UK, putting salaries under increasing pressure.
The latest quarterly Labour Market Outlook by the Chartered Institute of Personnel and Development and Adecco found that the short-term outlook for employment was strong - but that labour and skills shortages were accelerating.

The survey of 1,002 employers had a net employment balance of +22, as a majority of firms said they expected to increase staff levels.

But 70% said that at least some of their current vacancies were proving harder to fill, an increase on the previous quarter's survey, when 66% of employers said they were struggling.

The CIPD said: "This situation is being exacerbated by a relatively significant drop in the number of both EU and non-EU migrants that are employment in the UK. Looking ahead, labour supply looks set to be further constrained from 2021, when migration restrictions for EU citizens are introduced, especially for lower-skilled workers."

Official data showed that the number of non-UK born workers in the UK deceased by 58,000 year-on-year in the second quarter. In the second quarter of 2017, there was a year-on-year increase of 263,000.

The CIPD survey found that employers were reporting median basic pay increase expectations for the 12 months to September 2019 of just 2%, but the skills squeeze was increasingly influencing their decisions on pay.

Around half - 48% - who said they had struggled to recruit in the last year reported that they had increased starting salaries in response. Firms who said they were struggling to retain staff also increased wages, with 51% upping salaries in the past 12 months.

Alex Fleming, country head and president of staffing and solutions at Adecco, a recruitment firm, said: "While the data is not showing wages rising across the board we are regularly seeing this pressure being exerted in the recruitment space. Our clients are often surprised at the market rates when they are making talent-attraction decisions.

"This supply shock and other pressures will only serve to increase these difficulties, which could easily flow out into the rest of the workforce. In turn, this could cause a wider upward movement on wages."

Gerwyn Davies, senior labour market analyst at CIPD, added: "The data implies that the pendulum has swung away from the UK as an attractive place to live and work for non-UK born citizens, especially non-EU citizens, during a period of strong employment growth and low unemployment. This has heightened recruitment difficulties."

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