A third of businesses are set to increase salaries at the start of 2024 as they seek to retain talent, research by a leading job search website has revealed, following the release of statistics finding wage growth has slowed sharply in the UK.
Totaljobs’ latest Hiring Trends Index also found that securing another job with higher pay was the leading factor causing staff resignations in the third quarter last year – making retention and engagement the number one workplace priority for businesses this year.
The index, incorporating the views of 1,000 HR decision makers in the UK, found that the start of the year has seen businesses prioritising wage reviews as workers continue to demand pay increases in line with inflation, with a third (33%) planning on increasing salaries and bonuses. Securing another job with higher pay was the leading factor causing staff resignations between October-December 2023 (29%).
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While nearly three in five (58%) businesses were confident they would recruit the people they needed this quarter, 30% still admitted meeting candidate salary expectations would be a challenge.
Totaljobs reported that the top workforce priority for businesses in 2024 was improving staff retention and engagement (46%), including reviewing benefits and rewards, assessing training opportunities, investing in innovative technologies and offering flexible working.
This was followed by training staff to close skills gaps (37%) and improving talent attraction (27%).
However, with businesses facing increasing pressure amidst rising living and property costs (36%), meeting these expectations was proving challenging. As such, staff retention has become the top concern heading into 2024 (29%), overtaking filling vacancies for the first time (21%).
Despite news of layoffs across sectors, 78% recruited in the fourth quarter of 2023, a figure consistent with the same period in 2022. Of those that recruited, 29% increased their hiring down from 36% in the third quarter of 2023, while 18% paused and 7% decreased their hiring.
Of those that did recruit, 26% hired roles in operations, 24% in IT and Tech, and 21% in sales.
Property was the sector that increased recruitment the most in this period (46%), followed by construction, medical and health services, and education (39%).
At 6.2 weeks in the fourth quarter of 2023, time to hire has remained fairly consistent across the past year. Amid a stalling job market, 27% plan to increase their recruitment efforts at the start of this year.
Julius Probst, European labour market economist at Totaljobs, said inflation, despite falling, was continuing “to drive shifts in both wages and the labour market”.
He said it was “essential to recognise that money isn’t the sole factor. Keeping workers engaged and motivated is equally crucial. Amid broader uncertainty, employees seek roles that offer progression and opportunities for skill development. This not only enhances staff retention but also strengthens a business’s brand proposition, making it easier to hire.
“Recruitment and retention should go hand in hand, necessitating a review of engagement strategies and benchmarking salaries to achieve successful recruitment objectives this year.”
Growing redundancy fears
Meanwhile another study, by recruitment agency Randstad UK, has found that an increasing number of employees fear losing their jobs this year because of the challenging economic environment.
More than four in every 10 UK workers (42%) told Randstad they now feared losing their jobs, compared with 28% a year ago.
The growing fear of job cuts in the UK contrasted with the confidence of workers in North America, where only 28% were worried about redundancies. Elsewhere in Europe, only 36% and 37% of workers in Portugal and Poland were worried by the threat of job losses respectively.
Randstad researched the views of 27,000 workers from 34 markets across Europe, Asia Pacific, and the Americas.
Victoria Short, Randstad’s chief executive in the UK & Ireland, said: “The concerns of workers are not entirely unjustified. It’s clear the jobs market is cooling with softer than expected UK wage data out this week. This on top of news that inflation in the UK rose in December. This is playing a part in the growing anxiety among workers here amid the continued cost of living crisis and pressures on employers.”
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