Salary expectations have risen as the battle for skilled talent continues
Pay trends are impacting the talent pool
A recent article from the World Economic Forum finds that although CEO pay has recovered to pre-pandemic levels and some workers in high-paid jobs have enjoyed larger bonuses and pay rises, high price inflation is now impacting the real value of what most people earn.
As the battle to attract skilled talent continues, many employers are struggling to fill roles. Chief Executive of the Recruitment and Employment Confederation acknowledged that the record number of roles available is triggering strong pay growth as companies seek to attract people to work for them. Whilst overall wage growth may have slowed, KPMG recorded a seven year high in starting salaries in all regions of the UK. This rapid increase is a result of a demand and supply imbalance across the talent pool following the COVID-19 lockdown.
Companies face growing pressure to increase wages in the fight to find and retain talent and competition for candidates remains strong. For example, the 'LinkedIn Global Talent Trends' reported that the number of HR professionals with data analysis skills has increased by almost 250% over the last six years.
The High Pay Centre's research shows a rebound in executive pay and the gap between executive pay and that of average employees looks set to widen. Fast Company explored a new executive paywatch report by the AFL-CIO which has tracked CEO-to-worker pay ratios for over 20 years. They believe the significant pay gap indicates a focus for businesses, stating that “A higher pay ratio could be a sign that companies suffer from a winner-take-all philosophy,” but “a lower pay ratio could indicate the companies that are dedicated to creating high-wage jobs and investing in their employees for the company’s long-term health.”
CEO today explored the concerns around motivating employees when there is no budget to increase salaries. They looked at competition for talent, questioning the way in which a company can retain and attract skilled employees. A Pew Research Center study released earlier this year, found that 63% of those who left a job said low pay was one of the reasons why they quit, alongside a lack of advancement opportunities and feeling disrespected at work.
Salary and compensation will always be a key driver in talent acquisition, attraction and retention but other motivators have become important. The recruitment landscape continues to change, and agility, transparency and adaptability remain essential in ensuring that the best candidates are sourced and retained.