A worrying combination of high job confidence and low satisfaction with pay is likely to keep driving tightness in the UK labor market and fueling pay growth, according to recruitment firm Robert Half.
(Bloomberg) — A worrying combination of high job confidence and low satisfaction with pay is likely to keep driving tightness in the UK labor market and fueling pay growth, according to recruitment firm Robert Half.
Sixty-two percent of workers felt confident in their job prospects in the first quarter — up from 53% at the end of 2022, Robert Half’s Jobs Confidence Index showed. Job security, one of four gauges that make up the index, climbed to the highest level in data going back to 2009.
Combined with high pay dissatisfaction, as inflation continues to outpace salary increases, the figures suggest that employers could face a “talent exodus” as self-assured workers try their luck changing jobs to gain better pay.
The survey, produced with the Centre for Economics and Business Research think tank, is likely to be troubling for the Bank of England. Officials fear red-hot inflation will be harder to tame if workers continue to bid up wages, as firms will respond by raising prices to protect their profit margins.
Data released earlier this month showed average earnings excluding bonuses rising at their fastest rate outside the pandemic, while the unemployment rate for April undercut economists’ forecasts.
Matt Weston, senior managing director of UK & Ireland at Robert Half, said the index revealed “a complex labor market – one where dissatisfaction with real earnings is leading employees to feel increasingly confident in the value they bring against a skills shortage backdrop.”
He added that increasing numbers of staff seeking better opportunities elsewhere could “fuel a wage spiral, should pay continue to be leveraged to attract the best talent to replace those lost.”
Read more:
- UK Labor Market Tightens, Adding Pressure on Bank of England
- Drop in UK Job Postings Revives Concern of a Recession This Year
- Wages Rise 10% Across England, Finally Catching Up to Inflation
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