Salaries Likely To Rise To Recruit And Retain Talent: Survey

Author

Karsten Strauss

July 12, 2016

The shift to a tighter jobs market has led to fewer choices for companies seeking specific personnel. That’s ultimately led to companies having to work harder to find new employees, and those in charge of staffing and acquiring talent are saying that higher salaries and more expansive searches for new blood are the answer.

That’s according to a recently released survey report conducted by multinational human resources firm Randstad, which reached out to over 2,000 hiring leaders last November at companies of all sizes representing nine different industries. Overall, it’s getting harder to fill positions and taking more time to do so, 75% of respondents said.

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What’s primarily slowing down hiring is the difficulty companies are having finding job candidates who match their requirements, says Randstad group president, Traci Fiatte. “It’s not that there aren’t human beings available,” she explained, “its human beings with the job skills that they’re looking for specifically.” Top candidates with the right skills, oftentimes, are already gainfully employed elsewhere.

The dearth of qualified candidates hits a number of industries, says Fiatte, particularly IT-related companies, engineering and healthcare firms. Plus, hiring difficulties do not just affect skilled positions, but unskilled as well. On average, companies that participated in Randstad’s survey reported being understaffed to the tune of 13%. Says Fiatte: “If you look at a macro-level, companies are expected to do more with less.”

Doing more with less means that new people being hired have to be able to hit the ground running, and finding the right match takes time, especially in a tighter jobs market.

To make personnel searches more effective, 49% of the hiring decision-makers that Randstad surveyed said they were opening up new channels in their hiring strategies—like social media platforms and data analytics products. Also, 30% said that they were offering higher salaries to attract talent, and 29% said they were developing relationships with colleges to source new people.

Paying people more could break the trend of wage stagnation that has settled upon the U.S. workforce in recent years, despite economic recovery and job and GDP growth, says Fiatte. If luring already-employed job candidates with the promise of greater compensation is the only way to grow, and higher salaries the most effective means of hanging on to personnel, companies will shell out more and drive up salaries overall. Indeed, says Fiatte, that is what is happening right now. “We’ve always found that pay-based incentives are the best way to keep your talent and it’s the quickest way to lose it.”

According to Randstad’s survey, 33% of respondents say salaries at their companies are, on average, higher than they were a year before, 63% said there was no change and 6% reported compensation lower than 12 months prior.

Allocating more money to payroll, though, mean companies will have to take money from other areas of their business, or learn to cut costs to make up the difference. “Where we are seeing (new payroll money) come from the most is increases in automation,” Fiatte explained. “Anywhere that you can automate and remove a human being, that’s where (companies) are going first.”

Another avenue for savings is to squeeze more productivity out of existing employees. “It’s this vicious circle,” said Fiatte. “You need to do more with less which causes you to have increased needs for very specific people with job skills because you can’t just have fat lying around. And yet if you need to increase salaries then you have to make sure that people are even more productive.”

 

This article was written by Karsten Strauss from Forbes and was legally licensed through the NewsCred publisher network.

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