BackOne thing is for sure, 2022 is going to cost you so what does that mean for the job market?
As we are all aware, the UK cost of living has increased hugely over the past few months and it is set to keep rising for the foreseeable. House prices remain high, food, petrol, gas and electricty have all seen a significant rise. Across the board prices are on the up; an average household can expect a possible 50% rise in heating costs from April 2022. The official rate of inflation is rising at 7%; it’s fastest for 30 years. In most cases salaries simply aren’t rising at the same rate. All this means Brits are facing the steepest drop in income for the past 50 years.
It’s not surprising that a vast proportion of the working population is considering alternative employment. Businesses and recruiters are being inundated with CVs and this movement of people means the job market is buoyant. If you can, it’s a good time to recruit but employers might be well advised to consider the exponential increase in cost of living when recruiting new people….
General Manager earnings have doubled since 1995 but house prices have risen by more than 4.5 times.
According to steele-dixon data
- Don’t try and get a deal on someone you really want to hire.
- Offer them more than they currently earn
- A small gesture now will go a long way and earn you loyalty and commitment.
- This can work across all roles no matter how senior and the amount can vary.
- Too many offers come in lower or on a par with someone’s current earnings.
- A little extra will gain enthusiasm and a positive start for you and the new employee.
- People are moving jobs and money does talk right now.
At the same time, it’s a good idea to look at how you can ease the burden for your existing employees. According to one report, the current cost of living crisis has pushed more than a 3rd of the UK population to look for a new job. A pay rise is without doubt the best way to take care of your employees in the current climate. However, cost increases aren’t just going to be felt at home, employers will also be stung with huge increases in costs; there are alternatives if pay rises aren’t possible.
Looking back to the most recent economic crisis, we saw a 14% drop in GM salaries between 2007-2010. Between 2019-2021 we saw an 8% drop in GM salaries. By 2012 GM salaries had risen by 18% since 2010. Let’s hope for a similar recovery over the coming years.
according to steele-dixon data
The following ideas are worth considering…..
- The best way to hold on to your staff is giving them a pay rise to reflect cost increases
- Improvements to commission structures/performance based bonuses
- Could you offer a day or more working from home to ease transport/fuel costs
- Some might prefer to come into the office to save on household utility costs.
- Income streaming – allowing staff to draw on earned wages before payday
- Wellbeing support – anxiety in the workplace is one of the most damaging to productivity
- Salary sacrifice schemes; cycle to work, childcare vouchers etc
Hopefully the above is food for thought on how you can employ and keep the best people during these challenging economic times. We are here to help and with 60 years of history we’ve ridden many economic up and down turns – give us a call today to discuss any of your recruitment concerns.
Oh and don’t forget to turn the lights off – at home and work – it’s bright outside and it will save some pennies!
