1.8 per cent average salary increase across UK yet skills gaps affect productivity

According to a new report

A new report published today by Hays shows that businesses have an optimistic outlook, with 59 per cent expecting their business activity to increase over the coming year and 71 per cent planning to recruit over the next 12 months.

  • Over two-thirds (71 per cent) of organisations will continue with their recruitment plans this year
  • Salaries across the UK have increased by an average of 1.8 per cent, with more significant increases fuelled by skills shortages
  • Skills shortages are impacting on productivity, employee morale and plans for growth

However, the survey also reveals that 59 per cent of employer’s state that skills shortages are negatively impacting on productivity and 76 per cent state that they don’t have the talent needed to achieve business objectives over the coming year.

In a survey of almost 17,500 employers and employees, the Hays UK Salary & Recruiting Trends 2018 guide, shows that it is evident that organisations are being challenged by skills shortages. 70 per cent of employers stated that they have experienced moderate to extreme skills shortages and only 6 per cent say that they haven’t experienced any skills shortages in the past year.

It is these skills shortages, which have supported an average salary increase of 1.8 per cent across the UK. Construction and property professionals have enjoyed the highest average salary increases, with an average of 2.7 per cent, followed by IT, with an average increase of 2.3 per cent, and engineering at 2.2 per cent. Skills shortages are also fuelling some significant salary increases.

For example, cyber security information security analysts and engineers have enjoyed some of the greatest rises at 10.5 per cent and 8.4 per cent respectively.

Not only are the skills shortages leading to wage pressure in these areas, but they are impacting on organisations’ productivity.

59 per cent stated that skills shortages are impacting on productivity, while 30 per cent of organisations stated that it was impacting on growth and 27 per cent stated that it was impacting on business development plans.

Skills shortages are also putting pressure on employees, with 41 per cent of employers stating that skills shortages are negatively impacting employee morale. 16 per cent state that there has been an increase in absenteeism due to workplace stress. This correlates to the employee findings, with 44 per cent rating their work-life balance as very poor to average.

This situation is likely to be exacerbated further with 55 per cent of employees planning to move jobs in the next 12 months and high salary dissatisfaction for 43 per cent of employees. Almost a quarter (24 per cent) state that they intend to leave their current jobs due to a lack of future opportunities.

Nigel Heap, Managing Director of Hays UK & Ireland, said: “Despite the economic and political uncertainty and challenges faced by UK organisations, employers are confident about the opportunities that lie ahead and are continuing with their recruitment plans.

“The average 1.8 per cent salary increase masks some far higher salary increases across the UK, which are being enjoyed by professionals in areas of niche skills shortages.

“However, skills shortages have the potential to severely limit companies’ growth, hinder productivity and damage employee morale at a critical time.

“Employees are feeling the pressure; salary dissatisfaction is fuelling the discontent and careers are being stifled. Employers are concerned about the impact this could have on their ability to capitalise on their plans for growth.

“We therefore suggest that organisations look to make workforce planning a key strategic priority, invest in their employer brand, and use contingent workers for more than just projects.

“Employers need to ensure they can attract the best people and alleviate some of the pressure on their existing workforce.”

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