• 5.4

    2019

0.3

Up

Key drivers

Wage Pressure in High-Skill Industries (5.1)

Driven by strong wage growth in the information and communication sector, the wage gap between high- and low-skilled industries has increased.

Overall Wage Pressure (4.4)

Real wage growth is forecast to pick up slowly this year, increasing pressure on employers’ wage bills.

Talent Mismatch (7.3)

Last year just under 26% of the unemployed had been without a job for over a year. This is well below the recent peak of 36% in 2013.

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Education Flexibility

4.6
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Labour Market Participation

6.5
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Labour Market Flexibility

5.1
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Talent Mismatch

7.3
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Overall Wage Pressure

4.4
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Wage Pressure in High-Skill Industries

5.1
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Wage Pressure in High-Skill Occupation

4.9

View from the Ground

Employers are continuing to take a cautious approach to hiring because of ongoing uncertainty surrounding the economy. However, skills shortages persist across several industries and employers are hiring for essential roles. Access to skilled labour continues to be problematic for employers as unemployment falls further and there is some hesitancy from candidates to move roles. Employers are having to work hard to secure the talent they need due to skills shortages in areas such as technology, construction and in some areas of finance. As a result, wage pressure has increased, more so in skill-short areas and highly skilled occupations. Skills shortages are also impacting employers’ pursuit of digital transformation. As many organisations are capitalising on opportunities available through investment into new technology, the pace of transformation is being hampered by a lack of skilled and available talent.

Simon Winfield, Managing Director, Hays UK & Ireland

Key Skills in Demand

  • Cyber Security Analysts
  • Part-qualified Accountants
  • Site Managers
  • Data Scientists
  • Java Developers

Market Insight

In 2018, UK GDP rose by 1.6%. This was below its average growth rate of 2.2% in the previous five years. Business investment has been reduced by uncertainty over the future trading relationship with the EU and expectations of higher future trade costs. Partly offsetting this has been the growth in net exports from the depreciation of sterling.

There is not a lot of slack in the labour market. The unemployment rate averaged 4.1% in 2018, down from 4.4% in 2017. The labour force participation rate for 16-year-olds and over reached 63.8%, its highest level since 1991.

Since the end of 2016, net migration into the UK has remained broadly stable. But this masks different patterns for EU and non-EU migration. By the end of September 2018, non-EU net migration was at its highest level since 2004, reflecting a gradual increase in immigration over the past five years for both work and study. In contrast, EU net migration has fallen to a level last seen in 2009, due mainly to a decrease in immigration.