Wages rise as 'war for talent' returns, jobs report shows The number of vacancies increased to a 21-month high last month, which was behind the increase in wages, the analysis based on data from recruiters by the Recruitment and Employment Confederation and KPMG showed. Engineering and IT staff are the most in-demand, the survey found, with the North of England seeing the fastest rate of growth in permanent jobs, followed by the Midlands. London and the South posted modest increases. Tom Hadley, REC director of policy, said: "The war for talent has begun. January saw the sharpest rise in starting salaries in well over a year after a nine-month trend of increases. The rise is caused by continued growth in permanent vacancies paired with a reduction in candidate availability. Mr Hadley said the upturn in hiring - and wages - is "good news" for workers. On a scale where anything above 50 represents an increase, the REC/ KPMG permanent salaries index reached 52.5 in January, up from 50.5 six months ago. However, he said the salary rise signalled that employers needed to address the "skills disconnect" between available roles and job hunters, which prevents economic growth. Skills shortages in whole sectors like engineering and IT and for particular roles like chefs, drivers and sales are spurring competition for qualified staff. Employers are realising that to secure the talent they need they have to offer more attractive salaries," he said. Bernard Brown, head of business services at KPMG, said: "Amid the doom and gloom caused by predictions of slow growth, the hiring figures for January should give employers and employees plenty of reasons to be cheerful. We are by no means at a stage where the candidate is king, but perhaps they are moving closer to the throne.