As confidence in the economy returns, more organisations are looking to expand and recruit new people. Our annual salary survey has shown that this positive upward trend has also resulted in a noticeable increase in salaries across many different sectors.
Why are salaries increasing?
The increase in salaries could be partly attributed to the introduction of the national living wage. However, as the job market is becoming more buoyant, competition for talented employees has increased. The confidence of knowing there are more jobs available has also empowered candidates to negotiate better pay. Employers need to be prepared for this and should look to review how competitive their salary offering is.
What sectors are most affected?
Our salary survey looks at our core recruitment sectors of Accountancy, Financial Services, Human Resources, Office Support, Marketing and IT across the East of England. Using data from our Compare my Salary tool, we’ve seen increases in the sectors which are facing a particularly candidate short market. In the accountancy sector, salaries have remained reasonably consistent for higher level managerial positions but have significantly increased for the part-qualified market where demand is much higher. Marketing and HR positions are showing solid wage growth and salaries are increasing for both temporary and permanent office roles. The demand for skilled IT professionals has also seen pay rises across all levels and roles.
How can you check if you are paying enough?
Because salaries have remained fairly consistent over the past few years it is important for employers to review whether their pay remains competitive as confidence in the job market increases.
1. Benchmark your salaries
There are a number of tools out there which provide a breakdown of typical salaries. For example, our Compare my Salary tool is not just there for candidates to see how their pay compares against others in like-for-like roles, it also works well for employers to benchmark the salaries they offer.
2. Ask your employees
Gauge employee opinion on salaries, and associated packages, by including relevant questions within staff surveys. When any employees do leave the organisation, make sure you use the exit interview to try and understand if pay was one of the deciding factors.
3. Ask a recruitment consultant
A good recruitment consultant will have their finger on the pulse of the industry they specialise in, acting as an employer’s eyes and ears in the market place. They can provide an understanding of the jobs being advertised by competitors, any areas facing a shortage of high calibre candidates and updates on any shifting trends in salaries or benefits. This valuable insight will help make sure that your organisation offers the right package to attract the best talent.
Why consider paying more?
Regularly reviewing salaries is an important element when it comes to ensuring that you are able to both attract and retain talented people, a key factor to achieving business growth.
Attract more talent
Recruiting high calibre employees is as top priority for many businesses at the moment and a competitive salary offering is one of the key factors potential employees will take into account. This doesn’t necessarily mean your salary has to be the highest offered in the industry, there are many other factors, such as geographical location, which need to be taken into account. The focus is about ensuring it is competitive and doesn’t put talented professionals off from the outset.
Retain more talent
Not only do employers need to consider how attractive their salaries are when looking to recruit new people, they also need to review whether they are at the right level to keep hold of existing employees. With the job market improving, talented professionals may find themselves in greater demand. Losing good employees can have a big impact on organisations. It impacts on morale and productivity and also costs money to recruit a replacement. Employers may even find themselves having to increase the salary offered to be able to attract someone suitable enough to take over the role.
Should employers compete on salary alone?
It’s important to note that while job market confidence has made employees more likely to negotiate their pay, candidates are still reluctant to move on salary alone. Businesses should also look for other ways to reward and incentivise employees and to keep them engaged. There is also a growing trend for businesses to be offering more attractive benefits packages to help attract and retain top talent. We’ve also noticed that more organisations are beginning to increase their involvement in CSR for the first time since the recession. Companies which can show a commitment to their local communities are particularly attractive to the millennial generation, as they are looking to work for ethical companies with responsible values.
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