More signs of skills shortages as demand for staff rises

2004

Robust growth in demand for staff by UK employers during December has seen the number of people placed in permanent jobs rise at the fastest rate since July 2000. But with skills shortages already appearing, it is clear that training is becoming a critical issue for the UK economy.

December’s Deloitte and Touche / Recruitment and Employment Confederation (REC) Report on Jobs provides further evidence of an upturn in the UK jobs market.

With a greater number of people being placed in new jobs and with fewer redundancies in both the manufacturing and services sectors, candidate availability fell slightly for the second successive month.

Recruitment consultancies reported a shortage of candidates with suitable experience, a situation reflected in rises in both average salaries awarded to people placed in permanent jobs and temp hourly pay rates. Indeed permanent salaries rose at their fastest rate since May 2001.

Deloitte’s Brett Walsh said that with demand for staff remaining buoyant and fewer candidates available to fill vacant positions at employers, skills shortages are set to become more prominent during 2004.

“Employers will come under increased pressure to offer higher salaries in order to attract the right candidates," he said.

The survey also highlighted a pick-up in the manufacturing, IT and executive sectors, all of which have been very particularly badly hit in the last few of years.

Overall, growth in permanent placements rose to 62.8, a jump of 3.1 on November’s figure and 10.3 higher than July 2003. The figures are calculated from the percentages of respondents reporting an improvement, no change or decline. These indices vary between 0 and 100 with reading of exactly 50.0 signalling no change on the previous month.

The Deloitte / REC figures come just days after the Chartered Institute of Personnel and Development (CIPD) predicted that employment levels will rise by 250,000 during the next year, sparking major recruitment and retention problems for organisations as staff availability dries up.

Compounding this expansion in the workforce, the pick-up in the jobs market is also likely to spark the mass movement of staff as other figures suggest that more than one in four of the workforce - some six and a half million – will take advantage of better economic conditions to look for new jobs.

Many employees are overworked, stressed out, fed up and eager to quit their jobs. And with memories of downsizing, ever-increasing workloads and aggressive management still very fresh, 2004 looks set to be a bad year for they type of dinosaur employers whose attitude is ‘you’re lucky to have a job at all.’