The short answer is emerging as no. salary is no longer king when recruiting talent and this trend has only been pointing in one direction, up since the pandemic changed the working landscape.
Businesses are facing an increase in costs across all areas including, rising energy prices, wholesale increases, rental and business tax rises which means relying on increasing salary rates as a mean to attract and retain talent is an unsustainable business strategy. There are rumours that cost of living will only increase and impending recession is around the corner.
Many employers may find themselves in an economic tight spot going forward if they are not carefully considering the long-term impact of overinflating market rate salaries.
Not only does this strategy affect the general market, but it is also likely to be unsustainable for the employer from an economic perspective in the long term. In addition, it may also negatively impact existing staff by skewing their perception of their own salary entitlement and expectation.
According to recruitment outsourcer Omni, a staggering 54% of businesses are using salary inflation to retain talent and be the driving factor within recruitment campaigns. The statistics show that this is the primary go to method to attract and retain new employees to the business without considering other practises that could be much more effective, less expensive and part of a long-term strategy.
Many studies have suggested flexibility, the ability to work remotely and clear career development are all very important factors for candidates when considering roles. An inflated salary may only go so far and not necessarily retain talent if such factors are off the table. Therefore, offering an inflated salary is appearing as a short-term fix to an immediate problem but may in fact be a more costly strategy long term when taking into considering the time involved in recruiting along with any professional recruiting fees.
A huge 68% of employers that incorporated hybrid and remote working strategies into the workplace had a much higher retention rate of staff and found attracting talent easier.
The survey also highlighted that upskilling existing staff was the main reason for outsourcing for other talent, therefore employers should utilise all their options including looking at career development pathways to include upskilling staff early on in the employment relationship; this not only gives employees a sense of job security; it provides them with a structured route via career development planning.
A whopping 30% of employers found the most effective method of attracting talent when recruiting was offering flexible and remote working.
To conclude, the survey indicates that candidate perception of what is attractive within a role is not necessarily salary. Those that are driven by salary are likely to jump ship in the short term when the next higher paying role comes along.
What should employers be considering for candidates?
Employers should be looking at what else they can offer to widen the ambit of candidates and these strategies include:
- Remote working
- Hybrid/ flexible working
- Career progression
- Job security
We would encourage employers to speak to us about succession planning and career development pathways at least 6-12 months before the need to recruit to fully understand future recruitment needs. In addition, we can assist with developing clear performance and development strategies to enhance existing staff skillsets and promote investment and job security within the existing workforce.