(qlmbusinessnews.com via telegraph.co.uk – – Fri, 28th Dec 2018) London, Uk – –
Britons are switching jobs in record numbers, analysis of official figures shows, as the tight labour market helps workers secure higher pay.
More than one in every 40 workers moved to a new job in the three months to September, amounting to 860,000 people giving up one position to take another role.
The highest number in the Office for National Statistics’ records going back to 2004, it signals how employers are struggling to find and keep staff.
The number of people in work overall has climbed over that period to a record high of more than 32m, but even as a proportion of those in employment the number of job-switchers is at its highest since before the financial crisis.
This is an important indicator of the strength of the economy as it shows workers are prepared to take a risk by moving to a new job.
Such big steps are typically rewarded with a bigger pay packet. Job movers receive an average pay rise of 7pc, which is similar to the amount gained in a promotion. Even those who do not move are starting to see faster pay growth as employers have to offer higher wages to keep them in post.
Unemployment is at just 4.1pc, one of the lowest rates in decades, which is forcing employers to increase pay offers. The average pay settlement across a company’s workforce is 2.5pc to 3.5pc, according to the Bank of England’s agents around the country, up from 2pc to 3pc in 2017.
It is starting to affect pay across the economy as a whole. Economist George Buckley at Nomura expects average earnings to rise by 3.5pc in 2019, up from 2.9pc in 2018.
At the same time he predicts inflation will fall from 2.5pc to 2pc as oil prices and so fuel and energy costs fall, so real wages will rise by 1.5pc.
“The wage numbers have already been quite strong,” he said, which gave workers a boost in the run-up to Christmas.
Falling inflation could knock workers’ ability to ask for more money in cash terms, however, moderating the improvement.
“Inflation is slowing down so there will be less ability for workers to claim for higher wages,” he said. “Even so we have real wages going up quite strongly.”
Employers are also trying to find ways to keep staff without offering more cash.
“Despite the tightening labour market, many contacts managed to contain pay-bill growth by targeting pay awards at key skills or staff,” the Bank of England’s agents found.
Recruiters are reporting a similar pattern. “One of the big shifts is that more employers are making it very, very clear that from day one they are happy to discuss flexible working arrangements,” said Tom Hadley at the Recruitment & Employment Confederation.
“Candidates are looking for pay, but it is not often top of the list. It is more often about the workplace culture and flexible working which is definitely coming to the fore. It creates a real ‘stickiness’ for people not leaving organisations.”
By Tim Wallace