Wage growth set to remain at 1.5% to 2.5% in 2016 – KPMG/REC

The rate of growth in staff placements slowed in December 2015 compared with the previous month’s peak, according to data from KPMG and the Recruitment and Employment Confederation. Temporary and contract staff billings also increased at a slower pace and pay pressures for these types of position eased, with hourly staff pay rates increasing at the slowest pace for 21 months.

Regional and sectoral variations are marked, with the south of England posting the fastest growth in permanent staff placements at the close of 2015 and London the slowest. The growth in short-term appointments was strongest in the Midlands and, again, weakest in London. Demand for staff was consistently stronger in the private rather than public sector in December 2015, with demand for permanent public sector staff actually falling.

Kevin Green, REC chief executive, said:

‘Skill shortages are a real threat to continued growth in many industries. With talent at a premium, employers will try to attract staff by increasing starting salaries. On general wage growth, as many businesses align annual pay rises to the rate of inflation, we anticipate that growth will remain at 1.5% to 2.5%. The other bump on the road for business is the EU referendum, which is likely to create uncertainty which could lead to a reduction in hiring.’
For more information about the KPMG/Rec report please visit: www.rec.uk.com/news-and-policy/press-releases/reckpmg-report-on-jobs-growth-of-staff-appointments-eases-in-december