LONDON (Reuters) – British employers plan to hire staff at the fastest rate in seven years in the fourth quarter of 2014, but the growth in employment is still unlikely to boost wages, a survey of personnel managers showed on Monday.
The Chartered Institute of Personnel and Development’s (CIPD) quarterly net employment balance, which measures the difference between employers intending to hire staff and those planning to cut, rose to +30 from +23 in its previous report.
Businesses expected pay settlements in the 12 months to September next year to remain at 2 per cent, the same rate as found by each of the three previous reports, CIPD said.
“Predictions of pay growth increasing alongside strong employment growth is the dog that hasn’t barked for some time now, and we are still yet to see any sign of this situation changing in the near-term,” said Gerwyn Davies, public policy adviser at the CIPD.
Pay growth has lagged inflation for most of the period since the financial crisis in 2008, and the Bank of England is watching for signs of a pickup in labour costs as it considers when to start raising interest rates.
Davies said the rising number of job-seekers means employers can afford to keep hiring without paying more, a reflection of how profitability and productivity remain below pre-recession levels.
The finding that businesses expect to hire at a faster rate contrasts with another survey carried out by the Recruitment and Employment Confederation (REC). It said on Friday that hirings via recruitment agencies grew in October at their slowest pace since November 2013.
Official data released in October showed that growth in employment in Britain was its slowest in more than a year in the three months to August, even though the unemployment rate fell more than expected, to 6 per cent.
Average weekly earnings, excluding bonuses, rose to 0.9 per cent, only 0.1 percentage point up from the three months to July, according to the most widely used measure of pay published by the Office for National Statistics.