[UK] Salaries will skyrocket in 2022 in the name of staff retention

[UK] Salaries will skyrocket in 2022 in the name of staff retention
14 Jan 2022

A study has revealed that salaries for the UK’s white-collar professionals seem to be on the rise in the first quarter of 2022 as companies battle to hang on to their best staff, People Management reports.

Analysis of more than 100,000 jobs posted over the last 12 months was carried out for Robert Walters’ 2022 UK Salary Guide, it showed that professional services firms intend to increase their budget for pay rises by 10 to 15 per cent this year.

This will be the largest increase since 2008 and almost three times the inflation rate, with at least 5 per cent of wage increases in payroll budgets being reserved for existing employees, according to Robert Walters

The past year has seen wages for new starters grow by 6 to 8 per cent, while those who moved into ‘hero’ industries such as technology or healthcare saw pay jumps as high as 15 to 20 per cent.

More than two in five (43 per cent) of firms reportedly said they were planning salary increases for current employees to align with the higher pay awarded to new hires.

Chris Poole - managing director of Robert Walters UK - said that wage increases above market value for in-demand hires were a recurring theme of the past year and often meant new starter salaries outstripped those of existing employees.

However, he warned that this could lead to existing employees feeling their additional experience at a company is no longer valued or has not grown in value over the past few years, and projected that over the next year more companies would raise the pay of existing employees to keep them in line with new starter salaries.

The guide found that more than half (54 per cent) of staff were expecting a pay rise this year following a two-year salary freeze, while two-thirds of surveyed employees said they would leave their job if they were not rewarded fairly.

Three-quarters (75 per cent) of employees surveyed said they were ‘very confident’ about job opportunities in their sector this year.

The 2022 UK Salary Guide also looked at the top three values among post-pandemic professionals, which included excellent compensation and benefits (65 per cent); a desirable bonus scheme (53 per cent); and job security (40 per cent).

Almost two in five workers (37 per cent) also said that “inspiring colleagues and company culture” was an important factor in staying or taking on a new role.

Lower-ranking values for employees included flexible hours (29 per cent); remote working (22 per cent); and holiday entitlement (20 per cent).

The report suggested this might be because more than half (53 per cent) of workers stated they wouldn’t ask about flexible-working arrangements in a job interview in the coming year because they would just assume it would be offered.

However, with two in five (39 per cent) businesses saying that they were increasing pay to keep up with rising inflation, Mr Poole warned that companies may find themselves in a ‘wage-price’ spiral in the coming year; where higher prices and rising pay feed into each other and accelerate even more.

“There is little point in companies offering a pay rise as a morale booster if the impact of that increase isn’t really felt in the real world,” Mr Poole said, adding that they are increasingly seeing more companies consider the cost of living when determining the average pay rise an individual gets.

“Businesses will have to decide how much to raise their salaries to keep their employees, while also deciding how much to pass on those costs to their clients and consumers,” he said.

Jon Boys - labour market economist at the CIPD - told People Management that while employers were using a variety of tactics to attract and retain staff in a tight labour market, they needed to carefully consider their employment offer as a whole. 

“They should offer a range of benefits such as training, development and progression opportunities and ensure flexible working options are widely available and advertised during the recruitment process,” he said.


Source: People Management

(Link and quotes via original reporting)

A study has revealed that salaries for the UK’s white-collar professionals seem to be on the rise in the first quarter of 2022 as companies battle to hang on to their best staff, People Management reports.

Analysis of more than 100,000 jobs posted over the last 12 months was carried out for Robert Walters’ 2022 UK Salary Guide, it showed that professional services firms intend to increase their budget for pay rises by 10 to 15 per cent this year.

This will be the largest increase since 2008 and almost three times the inflation rate, with at least 5 per cent of wage increases in payroll budgets being reserved for existing employees, according to Robert Walters

The past year has seen wages for new starters grow by 6 to 8 per cent, while those who moved into ‘hero’ industries such as technology or healthcare saw pay jumps as high as 15 to 20 per cent.

More than two in five (43 per cent) of firms reportedly said they were planning salary increases for current employees to align with the higher pay awarded to new hires.

Chris Poole - managing director of Robert Walters UK - said that wage increases above market value for in-demand hires were a recurring theme of the past year and often meant new starter salaries outstripped those of existing employees.

However, he warned that this could lead to existing employees feeling their additional experience at a company is no longer valued or has not grown in value over the past few years, and projected that over the next year more companies would raise the pay of existing employees to keep them in line with new starter salaries.

The guide found that more than half (54 per cent) of staff were expecting a pay rise this year following a two-year salary freeze, while two-thirds of surveyed employees said they would leave their job if they were not rewarded fairly.

Three-quarters (75 per cent) of employees surveyed said they were ‘very confident’ about job opportunities in their sector this year.

The 2022 UK Salary Guide also looked at the top three values among post-pandemic professionals, which included excellent compensation and benefits (65 per cent); a desirable bonus scheme (53 per cent); and job security (40 per cent).

Almost two in five workers (37 per cent) also said that “inspiring colleagues and company culture” was an important factor in staying or taking on a new role.

Lower-ranking values for employees included flexible hours (29 per cent); remote working (22 per cent); and holiday entitlement (20 per cent).

The report suggested this might be because more than half (53 per cent) of workers stated they wouldn’t ask about flexible-working arrangements in a job interview in the coming year because they would just assume it would be offered.

However, with two in five (39 per cent) businesses saying that they were increasing pay to keep up with rising inflation, Mr Poole warned that companies may find themselves in a ‘wage-price’ spiral in the coming year; where higher prices and rising pay feed into each other and accelerate even more.

“There is little point in companies offering a pay rise as a morale booster if the impact of that increase isn’t really felt in the real world,” Mr Poole said, adding that they are increasingly seeing more companies consider the cost of living when determining the average pay rise an individual gets.

“Businesses will have to decide how much to raise their salaries to keep their employees, while also deciding how much to pass on those costs to their clients and consumers,” he said.

Jon Boys - labour market economist at the CIPD - told People Management that while employers were using a variety of tactics to attract and retain staff in a tight labour market, they needed to carefully consider their employment offer as a whole. 

“They should offer a range of benefits such as training, development and progression opportunities and ensure flexible working options are widely available and advertised during the recruitment process,” he said.


Source: People Management

(Link and quotes via original reporting)

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