It is now over two years since the recruitment industry declared we are in a candidate-short market. Unemployment is at all-time lows and even with talks of recession, it will still be some time before the supply of quality, skilled candidates improves.
Over the same period of time we have seen housing, transport, petrol, food, and most other costs rise, and the increase in wages and salaries have generally not kept pace.
In the past the remuneration package has not been one of the key deciding factors in the motivation to change or accept jobs. We are currently experiencing a shift in the candidate market due to economic factors; money is taking on greater significance. You do not need to exceed the market but you must be able to pay market rates.
Competitiveness has meant that companies have actively worked at maintaining tight wage structures but it would appear that the bubble is at the point of bursting. The belt-tightening has gone on too long and people need an adjustment in their basic wage structure to maintain their standard of living.
The increased expectations of cheap airfares, exotic holidays, electrical appliances, and bigger and better “toys”, have incited a frustration in an increasing number of employees. They perceive the lifestyle they would like to have and now want. It is only possible if their wages and salaries provide sufficient disposable income.
People are getting the message that they cannot live on credit, nor keep misusing their credit cards. If this is the case then they must, by default, seek a pay increase whether within their existing company or in a new position with another company.
There is no one single answer but there is a problem that needs to be addressed.
If management does not become proactive and plan accordingly then they can expect to face the dilemma of being reactive as they adjust to losing good, experienced key staff.
Offering the same wage or salary as the departing staff-member will generally attract a candidate of lesser skill and experience. Job-seekers are all looking for increased remuneration, and their desire is to move up the ladder, irrespective of skill base.
Candidates need to be realistic of their abilities and skills, although they are not yet in the company so they cannot be expected to fully understand the adjustments to make the step up to the new role. They may require training, tools, equipment or computers that they have been used to elsewhere. To risk taking on a new position and failing, could put a person in a more difficult financial position. Candidates will be aware of this when considering job offers.
There is no need to panic but there is a considerable need for open, honest, dialogue between management and personnel to ensure the ongoing success and profitability of the company. Also make sure the person joining the company understands fully the role, company culture, and expectations of their performance in the short and long-term.