Salary inflation hits 53-month high in London as shortage of EU candidates bites
Salary inflation is at a 53 month high in London because of a shortage of EU candidates due to Brexit and an uncertain economic background leading to reluctance among workers to switch jobs.
According to a survey published today by audit firm KPMG and the Recruitment & Employment Confederation (REC) and compiled by IHS Markit, the rate of salary inflation accelerated to its strongest for just under four-and-a-half year in London in December.
By comparison starting salary inflation across the UK slipped to a four-month low.
Recruitment consultants in London placed more workers in permanent roles for the fifth month running in December.
However, the increase was modest and was the weakest in the sequence.
Growth was slowed by a hesitancy among those with jobs to move to a new opportunity and a shortage of EU candidates, according to survey participants.
Demand for permanent workers in London continued to expand. Although the growth of demand was at a six-month low, it remained above the UK-wide average.
While demand grew the pool of potential candidates shrank with the number of jobseekers looking for full-time work declining in December.
KPMG UK partner Bina Mehta, said: “Although December is always a bit of lean period in the jobs market, the impact of Brexit has amplified that effect, particularly in London. Employers are having to offer increasingly attractive and creative packages to tempt new talent on board. With salary inflation at a 53-month high, this is an unsustainable situation for many employers, particularly at an SME level where profitability drives growth.
“As a business services hub it is people who drive the capital’s productivity and with employers facing the prospect of being unable to fill their vacancies – it could have a negative impact on our productivity levels and London’s economy as a whole.
“There is good news for experienced staff however, and if you aren’t looking forward to another year in your current job, now is a good time to go job hunting.”