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Skills shortage 'sees pay going up'

Skills shortages are driving increases in pay, with almost a third of recruitment agencies reporting higher starting salaries, according to a new study.

Pay growth was especially strong in the Midlands and the South, said the Recruitment and Employment Confederation (Rec) and KPMG report.

The rate of pay growth was the strongest since last September, while the availability of candidates continued to fall.

Skills shortages were a particular problem in teaching, while for temporary staff the problem was worse in nursing and healthcare, it was reported.

Kevin Green, Rec's chief executive, said: " Almost a third of recruiters say that starting salaries have increased in comparison to last month, and we've seen another increase in the number of people that have found a new job via a recruiter.

"This suggests that labour market fluidity is returning. Candidates are more confident about looking for work, and there are opportunities to earn more for those that do.

"Employers need to realise that people are deciding to change jobs because they can earn more than in their current job.

"Increases in starting salary offers are being driven by skills and talent shortages across the economy, and businesses are going to have to think hard about retaining scarce resources.

"We have acute shortages in the public sector, with recruiters reporting that teachers and healthcare workers are hard to find both for permanent and temporary vacancies.

"As politicians debate skills, education and immigration in the run up to the election, we hope they recognise the potential impact of this skills crisis, because a lack of workers to meet demand threatens the sustainability of our economic growth."

Bernard Brown, of KPMG, said: " Recruiters are struggling with industry-wide skills shortages, as demand for talent continues to outstrip the number of candidates seeking work. This pervasive skills shortage could put the brakes on economic growth if it continues unabated."

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