The war for talent is back on, and the battleground is salaries
Julia Turney, partner at independent professional advisory consultancy Barnett Waddingham, comments: “The UK’s labour market is in a state of flux. Unemployment figures have escaped largely unscathed from the recession scares of recent months, meaning few people are job-hunting. But more than a quarter of working-age Brits aren’t working or looking for work at all; they are ‘economically inactive’ due to sickness, disability, and caring responsibilities.
“For business, this means the labour market is tight – most people who want jobs have them. This, combined with the cost-of-living pressures facing consumers, means wages are climbing, and are set to surpass inflation altogether later this week. The CIPD has revealed that almost half of UK employers have made counteroffers in the last year to try to keep staff – it’s clear that the war for talent is back on, and the battleground is salaries.
“But this upwards spiral is not sustainable. If wages continue to rise, so will inflation – labour costs will increase, and so in turn will prices. To break the cycle, the responsibility is on businesses to create an environment where staff are both fairly paid and highly valued. Organisations must take a planned holistic approach which goes beyond just cash remuneration – it should include benefits, culture, and wellbeing. Most employees who stay in their role do so because they love the work and the culture, and many who leave dislike the work and team. Employers who tackle this problem head-on will be able to not just compete in the war for talent, but shift the battle entirely.”
Key findings from Barnett Waddingham’s survey of employees:
- At the beginning of this year, almost three quarters (70%) of UK employees expected to still be at their current workplace in 6 months time. But one in seven workers (14%) thought they’d have moved elsewhere, while 15% weren’t sure.
- Of those set to stay, the key reasons were loving the work (37%), valuing the flexibility (30%), and loving the team (25%) – all outranked the financials: 21% stayed for the salary, while 19% stayed for the perks
- Contrastingly, salaries were the main reason those set to leave would do so – 34% would move for money. However, 24% disliked the work, 22% wanted more flexibility, and 16% wanted a better team – all things an employer could help solve.