Shortages drive job confidence
 

The challenging economic climate is creating a tight labour market where ‘cash-strapped’ employees are in the driving seat and we could see another mass exodus of staff, warns leading talent solution specialists, Robert Half (www.roberthalf.co.uk).

According to the June edition of Robert Half’s Job Confidence Index (JCI), the level of dissatisfaction with remuneration (the pay confidence pillar of the JCI) remains in negative territory falling a further 29.1 points quarter-on-quarter.  The Index shows that significant contractions in real employee earnings continued to weigh on the pay confidence indicator so far this year.  While average total pay was up by 5.8% annually in nominal terms, it was down by 3.0% after adjusting for inflation in Q1 2023.

“The latest Jobs Confidence Index reveals a complex labour market – one where dissatisfaction with real earnings is leading employees to feel increasingly confident in the value they bring against a skills shortage backdrop, all in the midst of a cost-of-living crisis.  With wage rises on the scale that some are demanding, potentially unrealistic for several firms, the concern is that another en masse talent exodus is on the horizon,” says Matt Weston, Senior Managing Director UK & Ireland, Robert Half.

“The risk of employees seeking better opportunities and remuneration elsewhere would not only pose challenges for businesses that need to deal with such talent losses but could also fuel a wage spiral should pay continue to be leveraged to attract the best talent to replace those lost. In this environment, retention strategies that look at the entire remit of employment benefits will be key.”

According to the JCI, almost two-thirds of workers (62%) feel confident about their job prospects for the next six months, compared to 53% in the previous JCI.  This is largely influenced by improvements in macroeconomic confidence, which rose 23.1 points quarter-on-quarter at the beginning of 2023, though it remains in negative territory.  The JCI predicts that the economy will grow by around 0.2% year-on-year in 2023, and although skills shortages are set to remain prevalent, job confidence is likely to continue an upward trajectory.