in 2017


Key drivers

Talent mismatch (7.6)

A fall in the UK’s long-term unemployment rate suggests that skills mismatches are becoming less of a problem in the country.

Overall wage pressure (3.4)

Real wage growth is set to recover in 2018, following a year of decline, although it remains below normal levels by historical standards.

Labour market participation (6.4)

The UK’s participation rate is expected to continue to decline, but at a slower rate, this year. Participation amongst those aged between 55 and 64 is increasing.


Education flexibility


Labour market participation


Labour market flexibility


Talent mismatch


Overall wage pressure


Wage pressure in high-skill industries


Wage pressure in high-skill occupation


View from the Ground

Against a backdrop of ongoing economic uncertainty around the outcome of the Brexit negotiations, the UK labour market remains healthy with record levels of employment. Regardless of the outcome of the EU negotiations, the availability of skilled labour is, and will remain, a critical issue for employers. Shortages are particularly acute in the construction industry and in technology, particularly for specialists in areas such as data and cyber security. The potential extension of IR35 reforms to the private sector also threatens to put pressure on employers’ access to the flexible contractor workforce. Most sectors remain candidate-led, with candidates receiving multiple offers and putting pressure on employers to make quick recruitment decisions. Wage pressure has cooled but candidates in skill shortage areas are still receiving significant salary and day rate increases.

Simon Winfield, Managing Director, Hays UK

COUNTRY profile

The UK’s economic growth slowed to 1.9% in 2017, dampened by the impact of Sterling’s depreciation on consumption and uncertainty over Brexit. It is forecast to remain at about this rate over the next two years.

Business surveys point to the availability of skilled staff being a constraint on growth. In 2017, the CBI’s Service Sector survey found that an average of 38% of business and professional firms, and 22% of consumer services firms, thought the availability of professional staff would limit their ability to increase the size of their business over the next year. The CBI’s Industrial Trends Survey also found a net balance of +23% of firms thought the lack of availability of skilled labour would limit output over the next three months, in Q3 of 2018.

Key skills in demand

  • Data Scientists
  • Front-end Developers
  • Cyber Security Analysts
  • Part Qualified Accountants
  • Building Surveyors