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A consistent rise in new vacancies, increased confidence amongst workers, skills shortages in key sectors, and a rising cost of living will put pressure on employers to increase pay, according to the latest Reed Job Index.
Data released for January by recruitment firm reed.co.uk founds that, whilst the number of new jobs available has increased across all industry sectors, average salaries have remained largely stagnant. In 2014, this situation looks likely to change.
The Reed Job Index, which is compiled every month using data from over 160,000 vacancies advertised on reed.co.uk, now stands +29% higher in January 2014 compared with the same month last year. The construction and property sector saw the largest increase, with job opportunities up +74%, year-on-year.
Overall, the Reed Job Index for January 2014 stands at 178, up from 138 in January last year.
Despite this growth, average salaries have remained static and in some regions have fallen over the past year. The overall Salary Index figure for January 2014 was only +1% higher than the figure for January 2010 and +1% above the 2013 average. Recent figures from the ONS show average weekly earnings are growing annually at just +0.9%.
More than 6.2 million jobseekers visited reed.co.uk during January, making over four million job applications, as the continued increase in the availability of new jobs and a recovering economy gives workers more confidence to consider new opportunities.
James Reed, chairman of reed.co.uk, commented: “The latest Reed Job Index data shows another encouraging increase in new jobs, but salaries continue to lag. While employers have gone out of their way to hold on to valued staff during the downturn, the improving economic situation is creating a new set of pressures on pay.”
“A wider choice of opportunities is giving candidates a renewed confidence, whilst skills shortages are becoming ever more apparent in key industries, such as engineering. These factors are combining to give employees the upper hand when it comes to negotiating salaries and adding pressure on employers to increase their rates of pay.”
"It will be the employers who are fastest off the starting blocks who will win the new race for talent,” Mr Reed concluded.