Business confidence in the North East high - but employers face pay pressure in 2016
- Salaries increase by 1.7% in 2015 in the North East with three fifths of employers expecting to raise pay again next year
- 63% of employers in region confident that business activity levels will increase in the next 12 months
- War for talent intensifies as 69% of employers plan to hire additional staff
- Employees in the construction and IT sectors see biggest jumps in salary
According to the Hays UK Salary & Recruiting Trends 2016
report, which includes a survey of over 600 employers and employees in
the North East, increased confidence in the region’s economy and a more
fluid jobs market will not only lead to an increase in hiring next year
but will see employers come under unprecedented pressure to raise pay.
The analysis of data from Hays job listings, job offers and
candidate registrations showed the region’s salaries for qualified,
professional and skilled workers grew on average 1.7% in 2015, lower
than the national growth of 2.3%. The average professional salary for
the region is now £42,458.
The survey shows that pressure over pay is only set to intensify
next year. Three fifths (60%) of employers in the region anticipate
raising pay in 2016 with over one in ten (17%) expecting to award salary
increases of above 2.5%. The construction and IT sectors saw a 3%
average salary increase, the largest in the region.
The report also indicates that confidence in the region’s economy
is high. In the North East over three fifths (63%) of employers expect
business activity to increase next year and 69% also expect to recruit
more staff to meet demand.
Increased economic confidence may have consequences for staff
retention, with more than half of employees in the region expecting to
switch jobs next year. This is also reflected in the region’s biggest
city, as almost three fifths (59%) of employees in Newcastle expect to
move jobs in 2016.
Pam Lindsay-Dunn, Managing Director of Hays Yorkshire Region, said:
“Economic confidence in the North East is high and many businesses
are now turning their thoughts towards next year as they look to
increase their headcount to meet the demands of a busier 2016.
Skill shortages in the region are still of concern and we continue
to see a power shift from employers to candidates. Therefore, businesses
will need to work harder to stand out in a crowded jobs market to
attract and retain the best. With over half of employees in the region
dissatisfied with pay and the most common reasons for wanting to move
jobs being salary and lack of future opportunities, employers will need
to dig deeper into their pockets and provide clear progression paths to
appeal to top talent and retain their skilled workers.
The construction industry saw some of the largest salary increases
in the region this year and retaining and attracting talent will prove a
particular issue for the North East construction sector in 2016. The
industry has high expectations for the year ahead and we are seeing more
construction developments appearing in Newcastle and across the region.
There are multiple large projects in progress all over the region such
as the Newcastle science park and the multi million pound Jesmond Three
Sixty development which reinforce high hopes for 2016.
However, with over half of construction professionals in the North
East set to move jobs in the next year, many businesses will have
difficulty finding the staff numbers required to meet increasing demand.
Employers will need to offer substantial remuneration packages if
they’re to attract and retain the sector’s top talent and continue this
momentum into 2016.”
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