Pay, pressure and politics! What’s the outlook for hiring in 2019?

With 2019 just around the corner it is clear that there is a shortage of skilled workers and that these gaps are likely to be made worse by Brexit. The good news for employees is that some roles are in high demand, these people are enjoying multiple job offers and receiving double digit pay rises. The bad news for anyone hiring is that these professionals can be harder to track down, difficult to secure and can be very choosy about their employers.

The challenge for employers is escalated by organisations having to adapt ever more quickly to the world around them. Employers are under pressure to move fast to capitalise on new opportunities in an ever-changing world. Digitalisation, automation and investment in technology combined with the political challenges served up by Brexit mean an unprecedented level of uncertainty and the expectation of yet more change to come.

Perhaps the biggest threat to being able to tackle this change in 2019 is the competition for talent. The thousands of employers we speak to every day are optimistic about the years ahead, but many are already citing skills shortages as threatening their productivity and project delivery. It is clear that whatever the post-Brexit world looks like, employers will need a competitive approach to attracting and retaining talent.

We’ve recently launched our new salary guide with a series of events and webinars and here is just a small selection of questions that I’m most frequently asked about what employers can expect for the year ahead.

What level of pay rises were there in 2018?

We surveyed almost 23,000 people for the Hays UK Salary & Recruiting Trends 2019 guide and this year we have seen salaries rise by an average of 1.9%. This is comparable to last year when it was 1.8% and is being fuelled by skills shortages.

Technology roles are taking the spotlight in securing salary increases. In our guide, eight of the top 10 pay increases were for technology increases. Data architects saw an average increase of 6.2%, whilst database developers also saw a higher than average rise of 5.6%.

Other areas which saw high salary increases include tax managers in financial services at 6.7%, as a result of an increased focus on compliance in the City. The competition for staff has also increased demand for HR professionals, with reward specialists seeing an increase of 3% and in construction, site managers saw an increase of 3.4%.

Will employees expect a pay rise in 2019?

Overall, employers appear to have responded to employees’ demands for higher salaries. In the past year, employers increased salaries at a greater rate than they predicted and pay rises were larger than anticipated, which has helped to boost salary satisfaction.

Last year 67% of employers expected to increase salaries, while this year 73% actually did so. These increases were larger than expected, as 30% of employers increased salaries by over 2.5%, compared to 19% who planned to do so when asked in 2017.

61% of employees say they are happy with their salaries, compared to 43% last year. There has also been a drop in the number of requests for pay rises as only just over a quarter (26%) asked for a pay rise in the past 12 months. But, in areas where there is a shortage of candidates for roles, salary alone shouldn’t be relied on - a competitive salary is no longer enough to attract the best people to your organisation.

Are employees moving roles?

Almost half of employees (56%) say they expect to move jobs within a year. Salary remains the biggest motivator to look for a new job, but professionals are also looking to move for career progression. 40% of employees feel there is no scope for career progression, which is likely to be a significant driver of employee movement in 2019. This is particularly the case because over half (53%) of employees said that they feel uncertain or negative about their career prospects.

Work-life balance is also a key reason that employees are looking for new jobs. Many employers continue to underestimate how important it is to offer – and promote – a positive work-life balance. Only 18% of employers in our survey thought that work-life balance is important to attract staff, yet 30% of employees prioritise this when considering a new role.

How difficult will it be to hire in 2019?

Our survey, showed that 92% of employers were faced with skills shortages and that over a quarter (28%) don’t believe they have the talent needed to achieve business objectives. Yet, hiring plans are continuing, with over three-quarters (76%) stating that they intend to recruit staff over the next 12 months. This has jumped from 71% last year and is at a five-year high since the survey launched.

So, it certainly isn’t getting any easier to recruit staff and is leading to concerns about the impact these gaps are having on productivity. Almost half (49%) say skills shortages are already impacting on productivity, 46% say it is having a negative impact on employee morale and 41% of employers say it is impacting on the ability to deliver projects.

What’s the good news for anyone looking for staff?

Whilst there are undoubtedly challenges for anyone hiring in 2019, it is by far a picture of doom and gloom. Good people are out there and in face of all the changes and challenges, these people can add even more value and can be a tremendous asset to your team. Employers do however need to be creative and look for new approaches to attracting and retaining their team. Showing employees evidence of career opportunities and listening to the call for greater flexibility over working hours is part of the solution. The other element is looking to untapped talent pools and working with recruiters like Hays to find people who might not actively be looking for work but would be open to the idea – for the right employer of course!

To request a copy of the Hays UK Salary & Recruiting Trends 2019 guide click here.