Nottingham business confidence high - but employers face pay pressure in 2016
- East Midlands salaries increase by 1.7% in 2015, yet growth lags behind national average
- 64% of employers in region confident that business activity levels will increase in next 12 months
- War for talent intensifies as 75% of employers looking to hire additional staff but 61% of employees expect to move jobs in 2016
- Employees in the construction sector see biggest jump in salary but over half of workforce expect to quit next year
According to the Hays UK Salary & Recruiting Trends 2016
report, which includes a survey of over 1,000 employers and employees in
the East Midlands, 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, slower
than the national growth of 2.3%. The average professional salary for
the region is now £43,549, with employees in the construction sector
seeing the biggest growth of 3%.
However, the survey shows that pressure over pay is only set to
intensify next year. Three quarters (75%) of Nottingham employers
anticipate raising pay in 2016 and nearly one in three (31%) expect to
award salary increases of above 2.5%.
The report also indicates that confidence in the region’s economy
is high. In Nottingham alone, 74% of employers expect business activity
to increase next year and 83% expect to recruit more staff.
However, it appears that the combination of increased economic
confidence and slower salary growth may have consequences for staff
retention, with three fifths (64%) of employees in Nottingham expecting
to move jobs in 2016.
With almost three in five East Midlands employees (57%)
dissatisfied with their current salary and nearly a third (32%)
expecting to move jobs over pay, it would appear that employers will
need to dig deeper into their pockets to retain their best talent and
take on additional work next year.
[1]Findings based on responses from 158 construction employers and employees in the East Midlands
Region’s skills shortage continues
A more fluid jobs market and dissatisfaction with pay will be
compounded by the region’s skills shortage, putting further pressure on
employers to pay even more for the talent they need. Over three quarters
(78%) of East Midlands employers say they are already concerned that
they will encounter a shortage of suitable candidates and almost a third
(29%) say they currently don’t have the talent they need to achieve
their business objectives.
Challenges ahead for construction sector
Despite enjoying the region’s largest salary increases this year
with rise of 3%, the construction sector faces a significant exodus of
staff with over half (57%) of employees expecting to change jobs within
the next 12 months. Confidence in the East Midlands’ construction sector
is clearly high, with four fifths (79%) of construction companies
expecting business activity to increase next year and a similar number
(81%) expecting to recruit, and employers will need to work harder to
retain and attract staff in order to take on additional work. It appears
construction firms are attempting to address this migration, with four
fifths (78%) expecting to increase salaries in 2016.
[2] Findings based on responses from 158 construction employers and employees in the East Midlands
Mark Staniland, Managing Director of Hays Midlands Region, said:
“We are noticing an increased confidence in the East Midlands
economy, particularly in the construction sector, and many businesses
expect to increase their headcount to meet demand in 2016. However,
while many companies raised pay, salaries in the East Midlands have
grown at a slower rate than in many other regions and employees are
becoming increasingly frustrated. Candidates’ power in the jobs market
is growing and many intend to move on next year in search of better
pay.”
“A startling number of businesses across the Midlands have grave
concerns about the region’s skills shortage and employers who can’t
offer competitive remuneration packages will find it increasingly
difficult to attract top talent. This could prevent many East Midlands
businesses from growing to their full potential in 2016.”
“Retaining and attracting talent will prove a particular issue for
the East Midlands construction sector in 2016. The industry’s
expectations for 2016 are high, buoyed by large regeneration projects
such as the multimillion-pound redevelopment of Nottingham’s Broadmarsh
Centre. However, with most of the region’s construction professionals
set to move jobs in 2016, many businesses will find it difficult to
field the staff numbers required to meet increasing demand. The most
skilled workers will command premium salaries and employers will need to
dig deep into their pockets if they’re to attract and retain the
sector’s top talent.”
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