Low unemployment puts upward pressure on wages

Falling
unemployment levels, combined with growing economic confidence and the
intention of employers to recruit more staff during the current quarter could
increase pressure for wage rises, according to the Chartered Institute of
Personnel and Development (CIPD).

Its
quarterly HR Trends and Indicators survey revealed that 53 per cent of
employers planned to recruit in the current quarter. 

Duncan
Brown, CIPD assistant director-general, said: "This further reduction in
the unemployment figures [announced last week] will place even greater pressure
on organisations trying to recruit staff, and could potentially fuel wage
inflation.

"With
officially recorded unemployment at record low levels, and employers planning
to step up recruitment in the coming quarter, organisations are going to find
it increasingly difficult to recruit suitably skilled staff. This could lead to
upwards pressure on wages," he said.

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"The
challenge for employers will be to retain existing staff and invest in training
to boost the skill levels of existing employees, or ultimately to find ways of
offering the most attractive packages to fill vacancies in an increasingly
competitive jobs market," he added.

By Mike Berry