Tag: Pay

Starting salaries for permanent candidates rise 

KPMG and the REC’s latest UK Report on Jobs was compiled by IHS Markit and was based on responses to questionnaires completed by approximately 400 UK recruitment and employment consultancies.  

Due to a sharp rise in economic activity in the last few months, along with a solid demand for staff, a considerable increase in permanent placements took place, while the number of temporary placements also rose.  

The report revealed a decrease in candidate availability, which isn’t new news considering skills shortages. The reduction in candidates, according to the report, meant there was a dramatic increase in starting salaries for permanent staff and a large increase in salary for short-term positions.  

 Availability of workers falls  

The availability of candidates dropped to a record low this month and, according to the report, underlying data revealed that unprecedented falls in permanent candidate numbers and temp staff supply had driven the latest deterioration in overall availability. The declines were widely associated with a reluctance among employees to switch roles due to the pandemic, fewer EU workers, furloughed staff and skill shortages. 

The combination of Brexit and COVID-19 and the resultant skills shortages have led to increased competition for staff amid the dwindling labour supply. This placed upward on starting salaries. A notable finding in the report stated that salaries for newly placed permanent staff increased at the fastest rate seen in almost 24 years.  

Increased competition for staff amid shrinking labour supply placed further upward pressure on starting pay. Notably, salaries for newly-placed permanent staff increased at the fastest rate seen in nearly 24 years of data collection, while temp wage inflation was the second-quickest on record. 

Regional and sector changes  

All four regions monitored in England, recorded faster rises in permanent placements when compared to the latest survey period. The increase was led by London. Unprecedented upturns were also seen in the North and South of England. London registered the fastest rise in temp billings during August.  

The private sector continued to record much stronger increases in vacancies than the public sector halfway through the third quarter. The steepest increase in demand was signaled for permanent staff in the private sector.  

Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, commented on the survey results:  

“Candidate shortages continue to plague businesses, who are all recruiting from the same pool of talent and struggling to fill gaps. While record high permanent placements and higher starting salaries mean it remains a job seekers market, recruiters and employers have seen the most severe decline of candidate availability in the survey’s history and will be thinking about how to attract and retain new staff.  

“This crisis isn’t going away, and the winding down of the furlough scheme at the end of September – while potentially bringing more job hunters to the market – could also add fuel to the labour shortage fire. Many businesses will have changed their business model during the pandemic, and so significant numbers of staff returning from furlough may need reskilling to rejoin the workforce in the same or another sector. 

Neil Carberry, Chief Executive of the REC also commented: “Recruiters are working around the clock, placing more people into work than ever as these figures show. Switching the entire economy on over the summer has created a unique demand spike, and a short-term crisis. 

“But it would be a mistake for businesses to think of this as only a short-term issue. A number of factors mean that the UK labour market will remain tight for several years to come. Business leaders should be looking now at how they will build their future workforces, in partnership with recruiters, including the skills and career path development.”

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In the last year, HMRC assisted more than 155,000 workers across the UK recover more than £16m in wages owed to them. They also issued more than £14m in fines to businesses who did not comply with minimum wage requirements.

Whilst most employers do pay their staff the National Minimum Wage,  HMRC has revealed some of the most ridiculous excuses for businesses not paying the legal minimum:

1. “She does not deserve the National Minimum Wage because she only makes the teas and sweeps the floors.”

2. “The employee was not a good worker, so I did not think they deserved to be paid the National Minimum Wage.”
3. “My accountant and I speak a different language – he does not understand me, and that is why he does not pay my workers the correct wages.”
4. “My employee is still learning so they are not entitled to the National Minimum Wage.”
5. “It is part of UK culture not to pay young workers for the first three months as they have to prove their ‘worth’ first.”
6. “The National Minimum Wage does not apply to my business.”
7. “I have got an agreement with my workers that I will not pay them the National Minimum Wage; they understand, and they even signed a contract to this effect.”
8. “I thought it was okay to pay young workers below the National Minimum Wage as they are not British and therefore do not have the right to be paid it.”
9. “My workers like to think of themselves as being self-employed and the National Minimum Wage does not apply to people who work for themselves.”
10. “My workers are often just on standby when there are no customers in the shop; I only pay them for when they are actually serving someone.”
Steve Timewell, Director Individuals and Small Business Compliance, HMRC, said: “This list shows some of the excuses provided to our enforcement officers by less scrupulous businesses. Being underpaid is no joke for workers, so we always apply the law and take action. Workers cannot be asked or told to sign-away their rights. We are making sure that workers are being paid what they are entitled to and, as the economy reopens, reminding employers of the rules and the help that is available to them.”
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Covid outbreaks seem to be deterring jobseekers from applying for new roles, with new data showing employers are having to offer higher salaries to attract applicants in areas where cases of the Delta variant are rising sharply.

According to job board CV-Library, there is a “clear pattern” of pay increases in areas where infection levels are high, such as the North West and the Midlands.

Liverpool topped the table for increases in the average pay offered in June compared with the same period last month, with salaries up 10.3%. Wolverhampton, Derby, Coventry and Nottingham also featured in the top 10, with increases of 4.7%, 4.7%, 4.6% and 2.6%, respectively.

Portsmouth, where Delta variant cases increased sevenfold between June 2 and June 9, recorded the second highest salary increase at 7.5%.

Lee Biggins, CEO and founder of CV-Library, said: “Businesses are fighting harder than ever to make it to the end of lockdown restrictions. Recruitment is the cornerstone of both survival and longevity and it’s clear to see that, in the most competitive areas, businesses are rising to the challenge and stepping up their efforts.

“With news that restrictions will continue for an additional four weeks, offering enhanced salaries and the most competitive packages will do much to entice the many jobseekers that remain hesitant in these uncertain times and give businesses the chance to hit the ground running on 19th July.”

Other factors at play
However, it’s clear that while Covid is one issue leading employers to have to work harder to attract new talent, it’s not the only one.

According to Alex Fourlis, Managing Director at job boards network Broadbean Technology, there are a number of factors at play.

“We’re experiencing a talent drought at the moment that is being impacted by multiple issues. An ongoing reluctance to leave the security of current roles is certainly one factor that’s hitting application numbers, but for industries like retail where job losses were reported during the height of the pandemic, the reality is many people have left for other, more secure, sectors.

“What we’re also seeing is the impact of Brexit really playing out across those industries that have historically relied on international talent. The decline in applications for logistics, for example, will no doubt have been exacerbated by the UK’s exit from the Bloc.”

Broadbean reported a further fall in application numbers in May, despite an increase in job vacancies during the same month. The retail and logistics sectors were especially impacted by  mismatches between supply and demand.

According to the Broadbean data, vacancies across retail increased by 55% in the three months to May, but over the same period the number of applications per vacancy fell by 52%.

The number of openings across logistics, distribution and supply chain were up 79% in May compared to pre-pandemic levels in January 2020, but the number of people applying for these roles fell 76% over the same time frame.

Broadbean said that this reflected a consistent trend seen in 2021 so far, with vacancy numbers more than doubling (up 133%) since January this year, but the number of applicants falling further each month since then.

Young the key to filling ‘vacancies vacuum’?
One solution offered up to alleviate the skills shortages in industries such as logistics and also hospitality – where the dearth of workers has been widely reported in recent months – is to bring more young people into the workforce.

That was the suggestion of West Midlands-based recruitment specialist Pertemps last week, which called on the government to take action to encourage young people into the jobs market.

Carmen Watson, Chair at Pertemps, said there had been a rise in both permanent and contingent vacancies, especially in sectors such as hospitality, food manufacturing and logistics.

However, she added there had been a “sea change in candidates’ career choices as a result of the pandemic” and that a change in strategy was needed.

“An ongoing concern is the economic inactivity rate of young people and we would urge employers to consider greater use of apprenticeships and traineeships to grow our future talent. This will undoubtedly need support from central government if we are going to fill this vacancies vacuum.”

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Finance, farming and transport hit hardest by pay cuts, according to Randstad research

Randstad’s latest analysis of the salaries of over 9,000 UK and Ireland workers, and data from 700 placed jobs, highlights the roles, industries, and demographics with the highest salaries or biggest drops over the last year.

The losers

According to the 2021 Randstad salary guide, Irish finance professionals were hit hardest, with part qualified group accountant seeing salary decline of -8%, followed by finance manager (-6%) and part qualified management accountant (-6%). In terms of sector, those working in agriculture and transportation saw the largest decreases in salary for new roles – reduced by 44% and 43% respectively. The East of England saw the biggest fall in remuneration as a region, with 28% changing jobs with a pay cut compared to just 14% in London.

The older demographic saw the biggest decline, with nearly half (48%) of 55-64-year-olds surveyed reported a decrease in their salary.

The winners

Demand for developers and specialist tech roles pushed their salaries up by 9%, according to Randstad’s Employer Brand Research (REBR), with the East Midlands the best region to find qualified tech workers. Despite the tech boom in the East Midlands, the West saw higher than average vacancies (up 11% overall) while the East fell to 2% below average.

HR assistant salaries rose by 6% in the North East and by an average of 4.5% across the North West, with salaries for other HR-related roles rising by nearly 3% on average across the country. London saw the biggest rise, with 15% of Londoners, across all sectors, received a pay increase of between £2,000 and £5,000 – and a further 15% reporting a pay rise of over £30,000 when switching jobs.

The three highest ranked roles by salary rise were: Software Developer (9%) followed by Marketing Assistant (7%) and HR Manager (5%).

Rise of the marketing assistants

With firms focused on competition, differentiation and positioning themselves for the upturn, marketing is in higher demand. Pay rises for marketing assistant roles now vary from a 1.5% increase to 13% in Yorkshire, to over 18% for newly qualified marketers based in the North-West of England. All marketing function roles in the UK have seen an average 5% increase on 2020 figures.

“With organisations over the past 18 months seeing a long list of changes — from new privacy policies, the accelerated digitalisation of brands, altered consumer behaviour due to the pandemic — marketers are working harder than ever, essentially, being asked to do more and with less,” said Adrian Smith, Senior Director of Operations, Randstad. “Acknowledging the importance of the central marketing function and the role it plays in supporting business objectives, the more junior marketers are getting the recognition they deserve.”

Not all about salaries

A new study by borofree highlights The importance of company benefits to attract and retain talent during a major talent shortage across all sectors has been highlighted in a new study from Borofree, a UK salary advance start-up that helps people avoid debt by providing free access to a proportion of their next pay cheque in advance.

The online survey of 2009 employed adults, conducted by Censuswide between 28th May – 2nd June 2021, found that 68% believe company benefits and perks have an important role in driving staff recruitment and retention. However, one in five of UK employees have had their packages reduced or cut completely in the last 12 months – including 28% of 16-24 year olds and 29% of those aged 25-34 years. As a result, 15% of 16-24 year old’s have considered leaving their job.

The study claims that employers are too focused on the short term and not enough on long term perks, with 25% of employees stating that they don’t think the perks being offered are relevant or tailored to them – such as fertility treatments or sailing trips – and 15% revealing they have never received any perks from the company they currently work for.

Benefits packages that provide financial wellbeing support are in highest demand, with pensions the most popular for a third of respondents but 18% want the option of being paid weekly and 14% want an interest free loan. “Too many companies approach company benefits as a PR exercise, failing to consider what’s going to make a real difference to their employees workplace wellbeing and happiness,” said Minck Hermans, CEO and Co-founder at borofree. “Evidently, the fads and outrageous corporate packages are no longer ticking the boxes for staff, who are looking for perks that are both relevant and useful for them.”

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Work-life balance is now a more critical factor to those changing jobs than the salary and benefits on offer, according to new research.

Specialist recruiter Randstad surveyed 9,000 people in the UK and found that 65% now put work-life balance as their top driver when choosing a new employer.

It was the first time in seven years that an attractive salary and benefits hadn’t topped jobseekers’ wishlists, though pay came in a close second at 64%.

Randstad UK CEO Victoria Short said: “In some respects, the profound changes in many people’s jobs has clearly brought the benefits of flexible working to the surface. Our data suggests there are two groups of workers who want to see a more balanced lifestyle here.

“For many, remote working has increased the number of hours they are connected to their employers, reflecting the need for a better lifestyle balance. At the same time, some have benefited from working at home by being able to carry out tasks or juggle personal responsibilities around a more flexible work schedule.”

Perhaps unsurprisingly given the job losses and widespread use of the furlough scheme since the beginning of the pandemic, job security was still high on the list of priorities at number three (61%).

The final two drivers for those seeking employment were good training at 58% and a pleasant work atmosphere at 55%.

Interestingly, the research revealed there was a disconnect between what employees want and what their employer is offering.

According to Randstad’s evaluation, while employees put work-life balance in the top spot, employers across the UK have it in eighth place.

Short said: “Understanding the gap between what employees want and what they think employers offer provides valuable insight into building a strong employer brand. Benchmarking against what employees perceive being offered by their current employer gives more context to the gaps that need to be bridged in order to create a credible name and the ability to attract the UK’s most sought-after talent.”

Now would seem to be a good time for employers to try to bridge those gaps as the survey also revealed that one-fifth of UK workers were looking to leave their current employment in the next few months.

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Those looking for a career change as a result of the pandemic might wish to consider some of the more specialised areas of finance, healthcare, tech and law if the results of a recent analysis are anything to go by.

Jobs website Indeed sifted through hundreds of thousands of full-time job postings on its platform to come up with a list of jobs that are highly paid but receive little interest from jobseekers compared with other roles.

Topping its list of the 20 jobs with the highest pay and lowest competition was geriatric doctor, which despite having a median salary of £57,349 a year, received 95% fewer clicks from jobseekers than other jobs on Indeed.

The healthcare sector accounted for 40% of the jobs on Indeed’s list (see table below), while the job of tax partner, at number 10 on the list, had the highest salary in the top 20 at £128,750 a year.

Bill Richards, managing director for the UK at Indeed, said: “With hiring resuming in earnest, getting people back into work is vital but these findings show there are still some sectors where there is not an abundance of candidates.

“The roles with the least competition are highly specialised, and employers often find they need to pay a premium to attract qualified candidates. Workers who have, or who are in training to get, these in-demand skills can expect to be wooed by big salaries.”

While admittedly the healthcare roles on the list require an intensive amount of training, there were also three tech jobs on the list.

Those with technical leanings interested in a career change could find it much less time-consuming to obtain relevant skills for these jobs than is the case for medicine. The added bonus is that it’s definitely a growth area, according to Richards.

“The availability of tech jobs, for example, is only going to increase as our world becomes even more digitised – and some workers may benefit from getting qualifications relevant to this sector,” said Richards.

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