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News & Views
Pay inflation crisis looms
New data from recruitment specialists Robert Half (www.roberthalf.co.uk) shows certain skilled staff are commanding salary inflation of over 37% in 2024 with 63% of workers set to reject a lowball pay offer.
As the UK’s skills crisis intensifies, almost a third of employers are finding themselves in the middle of a wage spiral, having to inflate salaries to maintain a competitive edge in the war for talent, according to Robert Half’s 2024 Salary Guide (www.roberthalf.com/gb/en/insights/salary-guide), with a further 26% of companies saying they are needing to offer additional one-off bonuses just to keep hold of their staff.
While over a quarter (27%) of firms say they are planning pay increases in line with inflation, 63% of applicants are citing insufficient salary as the top reason for rejecting a job offer. With the continuing skills shortage, many hirers have little opportunity but to meet skilled employees’ increasing demands.
“Many employers may be shocked next year at the salaries that some of their most in demand roles will command. Without careful planning this will weigh heavily on company profitability at a time when businesses are struggling with costs,” says Matt Weston, Senior Managing Director UK & Ireland, Robert Half.
“It is no surprise to see financial incentives are perceived to be a top solution. However, continuous pay rises aren’t sustainable, and firms need to consider how else they can boost hiring prospects and reduce attrition. With the UK continuing to face significant skills shortages and 75% of employers concerned about the attraction and retention of staff in 2024 according to our research, firms will find themselves with little option but to listen to the employee voice.”
“Yet, pay is not the ‘be-all and end-all’. A robust corporate culture and a tailored retention programme can be a cost friendly strategy,” continues Weston. “Our research shows, for example, that almost half (47%) of the workforce would reject a new job if the company didn’t offer flexible working, yet news reports continue to highlight brands that are enforcing office returns. In many instances employees leaving a business do so due to deep-rooted talent attrition causes such as heavy workloads and a lack of development opportunities. Business leaders must address all aspects of the employee experience and must do so fast since an increase in pay is the inevitable by-product of ‘jumping ship’.”
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