Pay growth forecasted to stay weak

15th August 2017

Finance
Pay growth forecasted to stay weak

Pressure on incomes looks set to continue, with pay rises forecast at 1% over the next year, a survey predicts.

Despite falling unemployment, wage growth is weak because the supply of labour has also gone up, says the Chartered Institute of Personnel and Development (CIPD).

The CIPD said for every low-skilled job, there were 24 applicants.

There were also 19 candidates for every medium-skilled job and eight for every high-skilled vacancy.

The CIPD’s quarterly Labour Market Survey of employers, carried out in association with the Adecco Group, said the workforce had been boosted by more workers from other EU countries, as well as by older workers and former welfare claimants.

Not all recent surveys back up the CIPD’s view. Last week,¬†a survey of employment agencies¬†found that the UK labour market was tightening, with employers finding it harder to recruit staff.

The survey, carried out by market research firm Markit for the Recruitment and Employment Confederation (REC), said that pay rates for both permanent and temporary staff were rising quickly because of a continuing fall in the number of job applicants.

Markit said last year’s Brexit vote was also driving some EU nationals home, making it harder to fill a wide variety of jobs.

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