There is an increasing fear of skill shortages with UK companies which was reflected by an significant rise in the number of job vacancies that are still not filled throughout Britain which has increased the bargaining power of workers to demand higher wages.
In the three months to January, there was a rise of 16000 in the number of vacancies in the British jobs market to reach a total of 870,000 according to the latest report of the Office for National Statistics. This is the highest number since the Office started keeping records back in 2001.
The biggest deficiencies in h\job vacancy fulfilment was being felt most by the companies in the services industry, the ONS said, even though it said that companies all across the board of the economy were being impacted. Currently, there is an estimated 2.9 job vacancies per 100 employee jobs. The industries in the services sector most hit by the phenomenon include the health and social care, IT and communications businesses and hotels and food services firms.
In 2018 till December, there has been a 3.4 per cent rise in the average weekly wages partly because of the shortfalls, said economists. A similar increase was also noted in regular earnings growth, excluding bonuses.
“With surplus labour extremely scarce and job vacancies rising to a new record high, workers are having more success in obtaining above-inflation pay increases,” said Samuel Tombs, the chief UK economist at the consultancy Pantheon Macroeconomics.
While the economy is going through its lowest level of unemployment since the mid-1970s, firms throughout the UK are plagued by increasing issues in hiring workers. Additionally, since the Brexit vote, there has been a decrease in the numbers of EU workers in the country.
To tackle the situation, the wages have been raised above the rate of inflation by companies to recruit. Access to workers could be further limited because of tougher immigration rules after the imposition of Brexit, warned employers’ groups. This is being viewed as a headwind for the British economy and the increase in consumer prices.
The latest data however did not mention anything about the rising concerns among employers and companies about the possibility of a lack of migrant workers in the future because of immigration rules after Brexit. In the year till December 2018, the data noted a drop of 76,000 in the number of workers employed in the UK who were born in the European Union. However that number was significantly lower than the number of workers in the UK who were not born in the EU which increased by 159,000 in teh same period.
“With fewer EU nationals working in the UK as the same time last year, it’s vital that the government recognises the need for a flexible post-Brexit migration system to avoid worsening skill and labour shortages,” said Jon Boys, the labour market economist for the Chartered Institute of Personnel and Development.
“Employers are still not giving people the pay rises they deserve, leaving them worse-off than a decade ago. Millions don’t have the security of a solid job, because the government won’t crack down on insecure work. And the prime minister’s reckless Brexit strategy is causing employers to take flight,” said Frances O’Grady, the TUC general secretary.
(Adapted from TheGuardian.com)