The jobs market continues to go from strength to strength but more investment in skills is needed to drive productivity and pay growth, according to the Chartered Institute of Personnel and Development.
Official figures out today show unemployment fell by 133,000 between January and March to 2.21 million.
However, CIPD labour market adviser Gerwyn Davies said the recovery is yet to be felt in people’s pay packets, with the average wage increase falling slightly to 1.3%. That is far below the pre-recession average increase of 2.5%.
“Skills shortages, currently concentrated in particular sectors and occupations in the domestic labour market, could soon begin to spread to other parts of the labour market putting upward pressure on pay,” warned Davies.
“Employers need to be developing existing workers, as well as hiring new ones, if they’re to mitigate this risk and ensure they have the skills to grow. Amid predictions that more employers look set to increase business investment this year, now is the time for employers to prioritise training as part of this investment.
“As well as ensuring that future business requirements are sustainably resourced, this also holds the key to boosting UK productivity levels – a pre-requisite for sustainable increases in the pay prospects of employees sustainably, many of whom are still yet to feel the benefits of the recovery. A failure to act will cause come sectors of the labour market to overheat, while also placing a brake on UK productivity and international competitiveness.”
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