LONDON (Reuters) – A meaningful boost to wage growth still looks elusive for most countries despite a robust global economy over the last year, an annual report on the world’s labour market showed yesterday.
Firms are finding it increasingly hard to hire skilled staff but weak productivity growth is hampering wages, recruitment firm Hays and consultancy Oxford Economics said.
Hays’ gauge of skills shortages across 33 countries hit its highest level in 2018 since the survey started six years ago.
“That talent mismatch has got worse in around half the countries that we’ve surveyed around the world,” Alistair Cox, chief executive officer of Hays, said.
Still, Hays’ index of wage pressure increased only slightly in 2018, and remains below levels seen two years ago.
“In this world of low inflation … it’s very difficult to pass on increased costs (from pay rises) to your consumers and customers. So to pay for wage inflation you really need to get productivity up,” Mr Cox said.
The Organisation for Economic Cooperation and Development predicts economic output per worker in major economies will grow on average by 1.1 percent this year and 1.4 percent in 2019 — still short of its pre-financial crisis average of 1.9 percent.
Japan, the United States and major European economies such as France and Spain showed some of the biggest disparities between the skills that employers need and those available in the workforce, the Hays report showed.
Much of the mismatch reflected strong demand for high-tech jobs but insufficient supply of trained staff.
“The educational systems around the world are not geared up to churn out enough of the people with these sorts of higher level skills,” Mr Cox said.
Britain ranked relatively poorly for overall wage pressure, with only China, Singapore and France faring worse, Hays said.
“There’s been quite a steady increase in government-introduced costs and burdens on all businesses in the UK over the last few years, which is worsening the cost base of British companies, making them less competitive,” Mr Cox said.
For the year ahead, Mr Cox said the fundamentals of the global economy bode well for the world’s labor markets but the growing trade war between the United States and China was a risk.
“That can put consumers and businesses onto the back foot. But that’s the only cloud I see on the horizon,” he said.