Employers 'face wage increase push'

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Embargoed to 0001 Thursday December 12File photo dated 18/03/13 of money as the UK downturn is finally expected to be left behind next year as the size of the economy surpasses its pre-recession peak, according to a new forecast upgrading prospects for growth. PRESS ASSOCIATION Photo. Issue date: Thursday December 12, 2013. The prediction from the British Chambers of Commerce (BCC) brings forward the likely date to the third quarter of 2014. It would mark the first time that UK gross domestic product (GDP) has climbed back to the peak it reached in the first quarter of 2008. See PA story ECONOMY GDP. Photo credit should read: Lynne Cameron/PA Wire

Employers will be pressed to increase pay this year amid a rise in vacancies, coupled with skills shortages, according to a new report.

Employment firm Reed said vacancies on its website have increased by almost a third over the past year to stand at over 160,000.

Wage rates have remained "largely stagnant" and have fallen in some regions, but Reed said this was likely to change.

Chairman James Reed said: "While employers have gone out of their way to hold on to valued staff during the downturn, the improving economic situation is creating a new set of pressures on pay.

"A wider choice of opportunities is giving candidates a renewed confidence, whilst skills shortages are becoming ever more apparent in key industries, such as engineering.

"These factors are combining to give employees the upper hand when it comes to negotiating salaries and adding pressure on employers to increase their rates of pay.

"It will be the employers who are fastest off the starting blocks who will win the new race for talent."

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