Starting salaries are rising at a record rate as companies fight over a shrinking number of potential employees looking for a permanent job.
Data released be REC/KPMG has shown that 38.3% of employers have had to pay more in June than the previous month.
58.2% said their pay offers hadn’t changed and 3.5% said that they were offering less money.
The survey’s indexed scale, where 50 means no change, gave a reading of 67.4 – the highest result since the survey launched in 1997.
Bernard Brown, head of business services at KPMG, said:
“[Consumers] may be facing rising house prices and struggling to build financial reserves because of low interest rates, but the desire for extra disposable income is not yet translating into a generation of employees who are only loyal to their monthly pay cheque.
“It’s a message employers would do well to take to heart as, although many might argue that by offering higher pay packets, they are showing market confidence, the truth is that continued starting salary growth is unrealistic and unsustainable over the long term.”
The survey also revealed a large fall in the amount of staff available to take up permanent positions, with a reading of 27.5.
This is the fifth month in a row that the labour market has tightened, and further worsens the biggest drop in candidate availability in 17 years.
Mr Brown continued:
“Perhaps this means that the productivity gap is being replaced with another chasm – a vacancy vacuum – and one that is unlikely to be resolved until employers recognise that, for staff, remuneration is about much more than take home pay.”
Image by EpSos.de