Bidding wars and salary dissatisfaction are set to cause mayhem in the coming seasonal staffing drive, according to experts.
September is traditionally a significant month of recruitment for UK employers as staff return from summer holidays – but this year is expected to see a turbulent mixture of bidding wars, as companies fight to retain talent, and dissatisfaction with pay hits a peak.
According to recent reports*, 40 per cent of employers have had to resort to counteroffers to hold onto employees, and the majority reported having to use this more and more frequently.
Whilst at the same time, more than 41 per cent of the UK workforce believe their rate of pay is unfair**.
Thea Watson, Chief International Growth Officer at BrightHR, said: “Since inflation breached the Government’s two per cent target in May 2021, it has run rampant, driving up the cost of living considerably, coupled with the fact UK interest rates have been cranked up to 5.25 per cent, from 0.1% in the same time period.
“This comes at a time when disposable household income has fallen by 3.7 per cent. That’s biggest fall in living standards for almost 70 years when data was first collected…
“As employees feel the pinch of rising prices and rent and mortgage payments, they naturally weigh job satisfaction against the perceived ‘fairness’ of their wages. If either one does not balance the ‘satisfaction scales’, then they will likely look elsewhere.
“Yet it’s important to remember that businesses are also feeling the pinch. And the pressure of looking to hire, or hold onto key personnel, is particularly daunting when small businesses are fighting for talent against larger corporations with fewer financial restrictions.
“When employees are not satisfied with the remuneration they’re receiving from their employee, this often manifests in low morale, which is a catalyst for a decline in productivity, and ultimately, high staff turnover.
“And the fact that a colossal 96 per cent of workers were reported to be looking for a new position in 2023 in a report by Monster.com which attributed the reasons largely to being in search of better pay, will surely be disturbing for the vast majority of employers to hear.
“Yet the talent pool is being heavily fished with employers battling against each other in the war for talent. And understandably, SMEs that may not have the resources to offer top dollar for roles will be concerned about missing out attracting staff, or retaining them—especially when 40 per cent of employers are reporting to have made a counter-offer to employees or prospective employees within the last year.
“In fact, nine in 10 businesses are reportedly struggling to recruit right now. And with the power shifting over more so to the employee, employers must make themselves look extra appealing to retain staff and also to attract staff.
“Salary will always come up trumps for jobseekers, with three-quarters prioritising it when looking for a role. But smaller teams may not have the capacity to carry out such extensive research as to what the going-rates are—particularly in a constantly shifting market. That’s why utilising a salary benchmarking service is essential to ensure job ads stack up against competitors and at least are in the right ballpark. This useful comparison tool can also be used to check existing salaries are in line with the market to prevent undue attrition.
“But it’s not just about salary, and SMEs needn’t necessarily worry about automatically losing out on key talent to the bigger corporations with higher budgets if they are unable to offer top rates—that’s if they can piece together an attractive benefits package that takes heed of other employee priorities.
“Take this for example: Almost all (92 per cent) employees see learning and development opportunities as a non-negotiable in their roles. In fact, they would go as far as to describe it a ‘deal-breaker’ should a prospective employer neglect this, so ensuring that your organisation offers comprehensive L&D opportunities is vital to be seen an employer of choice.
“Plus, in light of the current economic landscape, employees and job seekers are increasingly reliant on discounts and offers provided through their employer’s benefits platforms to maintain a good standard of quality of life.
“And additionally, 84 per cent of employees say that improving their mental, physical and financial health is a “top priority” this year, with three-quarters of those saying it’s “more important than advancing their career”. So, offering an employee assistance programme and other wellbeing initiatives can help shape your benefits package and appeal to those who would otherwise be at risk of taking a role at another organisation—whilst getting the most out of your people.”