Hays sees skills shortages push up wages as hiring bounces back

Recruitment company Hays has warned over “clear signs” of skills shortages worldwide and said the hiring woes are pushing up wages by as much as a quarter in some sectors.

The firm’s chief executive Alistair Cox said salaries are “easily” rising by between 20% and 25% in certain industries as employers seek to attract and retain staff, particularly in the technology and life sciences sectors.

It comes as businesses in the UK are resorting to offering large cash bonuses to attract recruits, with it emerging earlier this week that Amazon is paying £1,000 “golden hellos” to new warehouse workers.

The shortage of lorry drivers in the UK is also seeing firms pay hefty joining bonuses.

Rival recruitment firm Robert Walters recently said salary hikes of up to 30% are “commonplace” for some hard-to-source roles across the UK.

Mr Cox said: “Across all our regions there are clear signs of skill shortages and wage inflation in certain industries, particularly technology and life sciences.”

He told the PA news agency that workers are seeing real wage inflation for the first time in a decade.

“There’s an intense war for talent and firms are paying for it,” he said.

In the UK, workers are in high demand across sectors such as technology, life sciences – including diagnostics and vaccine work – as well the legal, banking and construction sectors.

The hiring spree is providing a boost to the recruiting sector, with Hays seeing the “sharpest recovery we’ve ever seen”, according to Mr Cox.

The group’s results showed a marked rebound in recruitment demand in the first half of the year, with the group saying it expects to recover to pre-pandemic profits faster than previously thought.

It posted a 2% rise in pre-tax profits to £88.1 million for the year to June 30, with growth ramping up in the second half.

Underlying operating profits sunk 31% to £95.1 million, but it said £70 million of this was earned in the second half.

Group fees fell 8%, but after a 24% fall in the first six months, they rebounded by 13% in the final six months – up 39% in the fourth quarter.

The group said it has made a “good start” to the new financial year and will resume dividends with a 10.15p a share payout for shareholders in November.

Mr Cox said: “The strength of the recovery has been dramatic.

“We now see a clear route back to, and then exceeding, pre-pandemic levels of profit, faster than we envisaged even six months ago.

“With such confidence in our future, we are proposing to resume core and special dividends.”