We were delighted to attend the Hays Salary Guide Breakfast Seminar which detailed the findings of the Hays UK Salary & Recruiting Trends Survey.
There were some very positive messages for employers, demonstrating the opportunities for growth and positivity – particularly in a number of key sectors. There were however reminders of complacency to employers in relation to their employees and hints as to how to retain key staff and potentially, for the more Machiavellian, how to do so whilst paying them less salary.
First – the good news for business – 66% of businesses surveyed expected their activity levels to increase in the next 12 months. Only 4% expected a decrease. This meant that 70% of businesses expected to recruit staff over the next 12 months. Great news for skilled recruiters like Hays.
Additionally, the CBI – represented by Assistant Regional Director Beckie Hart predicted continued strong growth over the next 12 months with improved productivity performance, albeit that this is still low in the UK – potentially hindered by the long hours culture.
The good news continued for employees. Increased confidence combined with skill shortages in certain sectors, in particular IT, construction and accountancy, has led to significant salary growth -much of it double digit growth – in a number of areas. Additionally 72% of businesses expected to be giving pay rises this year, albeit over half of that number were rises at or below the level of inflation.
The bad news for businesses (and bear in mind that this is a survey by a recruitment business) is that 61% of employees (that is 6 in 10 of your staff) plan to move jobs within the next year, 38% plan to move within the next six months. Employee mobility is at an all-time high. However, all is not lost for businesses. Only 27% of those employees would be moving for increased salary or benefits. So why are they looking to move?
26% of employees want to move due to lack of opportunity, 18% due to job security, 10% want to move due to location. Of those looking to move, 60% said that home-working would be important to them in a new role, 69% said that flexitime was important. In terms of benefits – 36% of employees would rate more than 25 days holiday as important, 23% rate a greater pension contribution as important.
So where does this leave businesses? How should businesses stave off this threat of employees leaving particularly when they are gearing up for growth? It appears that the most efficient ways of doing so are to make clear to employees whom you wish to retain that their positions are secure and that they have opportunity to advance within your business. Offer employees whom you trust the opportunity to work more flexibly (net cost zero – and statistically likely to increase productivity and loyalty), with the offer of more annual leave (net cost zero in many environments – if output is rewarded rather than input) and use tax efficient additional pension contributions (increases loyalty).
These small changes will likely have a minimal cost to your business and may help you in retaining those key staff without having to pay inflation busting salary increases or recruiting new, and apparently higher paid, staff.