Are firms handing out bigger salaries as skills shortage deepens?
UK unemployment is at a 46-year low, but many Brits are still feeling the pinch because of a drop in real income.
However, there may be good news on the horizon, with recent research suggesting that businesses are beginning to pump up starting salaries as the country’s skills shortage deepens.
Last month, the Recruitment and Employment Confederation (REC) revealed that permanent starting salaries increased at their sharpest rate in 19 months. Hourly rates also enjoyed a healthy performance, rising more quickly than at any other time in the last six months.
The REC said skills shortages are a key driver behind the change; the talent pool for full- and part-time jobs is shrinking rapidly, leaving employers scrambling for the best candidates.
Is it time for a change of scenery?
Kevin Green, REC chief executive, argued now is the perfect time for highly skilled employees to consider making the jump to a different firm.
“As competition for talent intensifies, REC data shows that employers are increasing starting salaries to tempt candidates to move jobs. However for their existing staff, wage increases are not keeping up with inflation,” he said.
“The conclusion is that talking to a recruiter and finding a new job is the best way to get a bigger pay packet.”
Mr Green’s comments probably ring true for many of the UK’s workers, who have seen real incomes drop because inflation is rising at a faster pace than wage increases. Real pay slumped 0.6 per cent in the three months to April, having already dropped 0.4 per cent in the preceding quarter.
“Right now, people with the right skills can take their pick of jobs as the number of vacancies keeps growing,” said REC director of policy Tom Hadley.
But are the same trends apparent in the corporate governance sector?
Making a move means better pay
Barclay Simpson research followed hot on the heels of the REC analysis and provides a comprehensive overview of compensation and market trends across five corporate governance functions.
Our reports supported the REC’s assertion that professionals will need to switch jobs if they want to significantly increase their remuneration.
For example, non-movers in compliance departments saw their pay packets rise by 5 per cent in 2017, while those who took on a new role could expect a 17 per cent increase. The gap between movers and non-movers was broadly similar across all functions.
However, it appears organisations aren’t necessarily handing out bigger starting salaries. This is likely to depend on a variety of factors, including the industry, the role and the company.
We found that salary increases are slipping; compliance professionals who stayed loyal to their firm saw an 8 per cent increase to their salaries last year, which is three percentage points higher than in 2017.
Security and resilience roles bucked the trend, but only for people who changed companies. Professionals recently reported a 19 per cent boost to their salaries at a new firm – up from 12 per cent last year – with ongoing skills shortages a likely cause.
Salary gripes rising among many professionals
Satisfaction with salaries tumbled across the risk management, internal audit and compliance functions.
Risk managers were particularly perturbed, with the proportion of respondents who feel adequately compensated for their work plummeting from 69 to 41 per cent.
Meanwhile, in-house lawyers and security professionals were largely content with their take-home pay.
The results were therefore a mixed bag across the multiple functions and roles in corporate governance. Nevertheless, a consistent trend is that the biggest salary increases go hand in hand with a change of employer.
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Our 2017 Compensation and Market Trends Report combines our review of the prevailing conditions in the corporate governance recruitment market together with the results of our latest employer survey.
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