A war for talent is raging in the UK's job market, stoking the fires of wage inflation and buoying recruiters.
Recruiter Robert Walters (RWA.L) said in its half-yearly financial results that activity in its business had jumped across all professional disciplines in the first half of 2021, with growth strongest in the permanent and interim recruitment sectors as candidate and client confidence levels improved.
Permanent recruitment now represents 67% (2020: 62%) of the Group's net fee income, it said.
The firm put the shortages down to the impact of COVID-19 and the lack of mobility of talent due to the impact it was having on immigration.
Candidate and client confidence increased progressively through the first half with a noticeable acceleration in quarter two, Robert Walters said. Activity levels were highest in London and across commerce finance, legal and technology.
The results back up reports of wage inflation across banking, legal and finance which have seen junior and newly qualified (NQ) talent paid in the region of £150,000 ($207,228).
A "pay war" in legal pushed one firm's salary for NQs — Houston-based Vinson & Elkins — to £153,400, representing a 4% hike in a year.
American firms dominate the upper echelons of legal pay in London, with none of the top five UK firms, the so-called Magic Circle, featuring in the top 20 for pay.
Quinn Emanuel Urquhart & Sullivan, another US shop, also said in July that NQs would see a pay bump of £11,000, bringing its their pay to £146,000.
Investment banks are in a similar position. This month it was reported that Goldman Sachs (GS) was in the process of deciding whether to pay its juniors more after young bankers complained that they were suffering from burnout.
Banks have tended to try to avoid inflating base-line wages as these are hard to cut when margins are squeezed, instead rewarding employees with bonuses which vary from year-to-year.
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