With a well reported skills shortage and a reduction in overseas workers there is an increasing pressure on the wage bill and staff costs are rising.
The latest reports about the increases in the rate of inflation are not helping either, raising the expectation of at least an inflation matching increase in pay.
A jobs survey which obtained information from 400 UK recruitment and employment consultancies indicated that starting salaries are showing record increases, with the sharpest rise in nearly 24 years of data collection.
The dynamic of low unemployment, shortage of applicants and increased starting salaries is attracting staff away for new more lucrative employment opportunities.
Many businesses are finding themselves in a difficult position with a dilemma caused by a pressure to increase salaries to retain staff at a time where they are operating with lower margins and cost pressures presented by increased material costs, increased energy costs and product demand that is slowly returning to a degree of normality.
And what is the answer?!! There is a rough ride ahead and tight reins and a good understanding of cost and controls will be essential. There is no magic bullet but keeping good staff when replacements are hard to recruit should be top of mind.