Shortage of European Union Workers Pushing Up UK Pay


On Wednesday, a group representing recruitment firms said that employers in Britain are forced to increase their pay offers in order to hire new staff and counter a increasing shortage of workers in the European Union ahead of Brexit.

The Recruitment and Employment Confederation stated that its monthly survey revealed that starting salaries grew in October at the second-quickest rate since November 2015.

“We already know that EU workers are leaving because of the uncertainties they are facing right now,” said Kevin Green, the REC chief executive.

“We therefore need clarity around what future immigration systems will look like. Otherwise, the situation will get worse and employers will face even more staff shortages.”

The official statistics agency of Britain said in August that net migration dropped to its lowest level in three years with more than half of the drop produced by citizens of the European Union leaving and fewer arriving since the Brexit vote.

REC said that its survey that was conducted with data firm IHS Markit revealed that the availability of temporary and permanent workers continued to decline sharply last month.

So far, there is a small sign that the pressure on salaries that was detected by REC for workers that were hired through recruitment agencies is seeping through into the rest of the labour market, despite unemployment dropping to its lowest level since the 1970s.

Average weekly earnings are growing by just over 2% per year, below the inflation rate which has hit 3%.

Last week, the Bank of England increased interest rates for the first time in ten years, in part because it expects that the plunge in unemployment in the United Kingdom will soon begin to push up wages.