The Ever Increasing Challenges of Hiring and Rising Wage Inflation

Published: 21 January 2015

According to the latest Recruitment and Employment Confederation (REC) survey, 93% of UK businesses have little or no spare capacity in their business.  Over a third of UK businesses (36%) claim to have no capacity at all to take on more work, whilst almost three in five (57%) have ‘little capacity’.  Therefore is there any surprise that many growing and expanding employers, who are seeking additional expertise to provide supplementary capacity are increasingly finding it difficult to hire the required talent.

With a high proportion of employers indicating that they would struggle to meet additional demand with current staffing numbers, the survey also reveals that 84% of employers are planning to hire permanent staff in the next three months, and only 7% plan to reduce numbers. Clearly indicating a genuine and real demand for talent, skills and relevant expertise within the market.  But whilst the requirement for additional talent grows and hiring levels increase the UK and International talent pool remains finite.

REC Chief Executive Kevin Green said:

’With employment levels at an all-time high and the economy strengthening, businesses will find it increasingly difficult to recruit new staff to increase their capacity.  The priority now is to ensure that employers are able to recruit the talent they need.’’

In a separate report from the Office of National Statistics, UK abour costs increased across the whole economy in the third quarter of 2014, particularly within commercial sectors and at director level.  Illustrating that perceived wage inflation is now a genuine reality.  Fuelled largely by demand clearly outstripping supply within key commercial talent markets.

Meanwhile the Annual Financial Times Survey published in January 2015 suggests that Britain’s recovery is secure and will continue at a good pace in 2015, even if growth is likely to be a bit weaker than last year. Of 90 economists surveyed, 77 thought that decent expansion rates would endure another year, representing one of their most optimistic assessments since the financial crisis.

Therefore, despite concerns regarding the economy in some quarters, falling oil prices and subsequent fluctuating consumer confidence…..the news is not all bad!  Many organisations and employers are looking for growth rather than further cost cutting.  A number of businesses are in fact growing, being successful and therefore looking to appoint the required high calibre talent to further facilitate such expansion and growth.

Not surprising however in the current and competitive talent market, many such organisations are increasingly finding it tough to appoint the required, high calibre individuals.  Berwick Partners leads the way in recruiting senior leadership positions across both the Private and Public sectors regionally, nationally and internationally, supporting organisations in making key appointments which have a critical impact upon their business.

Simon Walton is a Partner and heads up the Retail & Consumer Practice at Berwick Partners

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