Pay Growth Quickens As Employers Compete for Staff – REC

 

Today’s labour market statistics published by the Office for National Statistics (ONS), based on data from December 2017 – February 2018, show that the inactivity rate is the lowest on record, and the unemployment rate is the lowest since 1975. After being negative for a year, real pay growth (excluding bonuses) has rebounded to 0.2 per cent.  

 

Recruitment & Employment Confederation (REC) director of policy Tom Hadley comments:

“After a year-long wait, it’s a relief to see pay growth at its highest since summer 2015 and inflation coming down. Our data shows employers have been increasing starting salaries to compete for talent for years but it hasn’t been translating into pay rises for the wider workforce. Today’s data is a sign that employers are beginning to think seriously about how to keep existing staff, who could otherwise be lured away by companies with better pay offers.

“Businesses are still worried about filling vacancies. The low inactivity and unemployment rates mean employers have to attract candidates away from competitors. We already know employers are working hard to reach out to underrepresented groups and to make hiring practices as inclusive as possible, but they still can’t find enough candidates. That’s why it’s essential the government allows businesses to continue to recruit EU workers post-Brexit, without extra cost, time and bureaucracy. We simply don’t have the number of people in this country to fill vacancies, and if the government doesn’t recognise this it will hinder further growth of our economy.”

 

Ends

 

Notes to editors:  

 

1. For more information, contact the REC Press Office on 0207 009 2157/2192 or pressoffice@rec.uk.com. An ISDN line is available for interviews on 0207 021 0584.

 

2. Average weekly earnings (excluding bonuses) increased by 2.8 per cent. In real terms (adjusted for price inflation) they increased by 0.2 per cent. This is the highest regular pay increase since June – August 2015 (2.9 per cent, excluding bonuses). 

The inactivity rate (the proportion of people aged from 16 to 64 years who were economically inactive) was 21.2 per cent, lower than for a year earlier (21.6 per cent) and the joint lowest since comparable records began in 1971.  

The unemployment rate (the proportion of those in work plus those unemployed, that were unemployed) was 4.2 per cent, down from 4.7 per cent for a year earlier and the lowest since 1975.

 

The full ONS statistical release is available at: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/april2018

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