Salaries Continue To Rise
12th May 2023
A strong recruitment market has led to a surge in salary levels according to north-east recruitment experts, TMM Recruitment.
There has been realignment across many of the recruitment agency’s specialisms, averaging between five to ten percent. The highest salary increases of up to as much as 15% since the start of the year have been observed for specialist roles in corporate finance, IT, and technical disciplines.
Colin McKay of TMM Recruitment, said: “The recruitment market has been in a strong position for some time now.
What's driving the change in salaries?
“From the employers’ perspective, higher salaries are a result of several factors. For instance, employers may be playing “catch-up” in situations where rates of pay were not reviewed during the pandemic.
There’s no doubt that salary and counteroffers are being used as retention tactics and that’s inflating rates, but the protracted cost-of-living crisis is too with employers responding to this by offering higher rates or making one-off cost-of-living payments.”
The impact on recruitment decisions
While increasing salary levels has obvious advantages for candidates, there are secondary considerations for the employer.
Colin continues: “The current market conditions have implications for employers of all sizes. Consider the scenario where a larger employer has a team of software engineers and needs to grow the team. If the only way you can attract candidates is to offer an inflated rate of pay, then you risk destabilising the entire team or bumping up everyone’s remuneration.
“Conversely, smaller employers may lose out on experienced candidates because they can’t compete on salary levels.
“In IT, where there is a well-reported skills shortage, wherever possible we would encourage employers to consider employing a more junior person.
If you get the right person, someone you believe can deliver value down the line then invest in them.
Take the time to nurture them and train them up rather than waiting for a candidate that doesn’t currently exist.
Fueling unrealistic expectations
On the flip side, market conditions are creating unrealistic expectations from candidates.
“We are also finding that candidates’ salary expectations have increased. In general terms, candidates know that the employment market is tight and that employers might therefore be pressured to pay higher salaries to secure their desired candidate.
“The knock-on effect of this approach is that it can lead to candidates expecting to achieve higher salary levels. Even when they do not have the skills or experience to warrant the higher rates, such as graduates or newly qualified professionals.
It is important for candidates to understand their own value in terms of their skills and experience because, once in post, they will be expected to deliver at a level which is in line with their remuneration.
“We also caution candidates in circumstances where the allure of a higher salary blinkers them from other aspects of the offer as they may find themselves in a job that doesn’t have the development or progression potential they thought, and in fact leaves them stagnating professionally.”