Salaries are rising – have you reaped the benefit?
Wages are on the rise. The office for national statistics reports that the annual growth rate for average total pay increased by 4.3% in the 3 months to December 2021. The financial and business sector saw an even bigger increase of 8.1% in the same period.
Job vacancies also hit a new high in January, and this is a trend that we at Brewer Morris have seen steadily increasing since the beginning of 2022.
Salaries have risen sharply throughout the year as the battle for talent has continued to intensify. Employers faced with a shortage of candidates have been increasingly determined to retain staff and there is many a recruiter with their own stories of extraordinary buy backs, in some cases with salary increases of up to 50%.
Pre-pandemic there was movement from candidates looking for improved flexibility and the chance to work from home. With the new way of flexible working, a lot of these candidates are no longer as active.
Additionally, a combination of recruitment freezes during the pandemic and increased candidate caution on moving together with the levels of work either remaining at the same level or increasing has further added to the candidate shortage with the resultant salary increases.
However, these pay rises are not happening in isolation. We have spoken to Professional services businesses and many are increasing their fees which are then being passed on to their clients with the inevitable dangers of inflation.
In real terms (adjusted for inflation), in October to December 2021, total and regular pay fell on the year at negative 0.1% for total pay and negative 0.8% for regular pay. This fall on the year was the first time since June to August 2020 for total pay and May to July 2020 for regular pay.
Therefore despite the recent salary rises it would appear that the increases may not be that generous. With recent tragic events in Ukraine we are likely to see inflation and costs further rise further eroding any increases.
So what has been your experience? Have your wages risen sharply in the last 12 months? Employers, are you having to increase your wages across the board to attract the best talent?
If you would like to find out your worth in the market, please ghttps://www.brewermorris.com/consultants/et in touch with one of our specialist consultants for a confidential conversation.