How will the economic climate affect hiring, retention, and salary benchmarks over the next 12 months? As we continue to navigate uncertain times, what can employers do to keep their best talent and gain a competitive edge in the hiring market? Our hiring experts have pulled key themes, trends, and stats from the Robert Half Salary Guide 2024 to give a potential snapshot of things to come.
The guide is based on an online survey of 1,500 respondents across five key sectors and an analysis of thousands of UK job placements made over the past year. Keep reading to uncover the key hiring trends and insights that could inform your talent strategy in 2024.
Download the 2024 Salary Guide now
The uptick in hiring has created a tighter jobs market, underpinned by a historically low unemployment rate, and exacerbated by an ongoing skills shortage. With demand outstripping supply, three-quarters of business leaders have expressed concern about their ability to attract and retain skilled talent over the coming months.
75% of employers are very or somewhat concerned about retention
70% of workers are very or somewhat concerned about retention
“Pressure around the cost-of-living crisis and inflation are front-of-mind for employers and workers. Everyone is on the receiving end in one way or another,” says Phil Boden, Market Director at Robert Half.
“The UK’s skills shortage is pushing the narrative in a direction that no one could have anticipated. The cost-of-living crisis and economic uncertainty combined with skill shortages still gives workers room to request better remuneration packages now that the salary negotiation conversation is piping down. It's not as intense as last year, but workers can still expect something better whether they're moving jobs or being retained.”
Many employers surveyed consider counteroffers more cost-effective than recruitment and an effective way to show workers how valued they are. The latter is corroborated by 36% of workers, who say they'd feel appreciated if presented with a counteroffer.
"Businesses are more inclined to pay a little bit extra to existing employees to retain them so they don't have to go through the hiring cycle repeatedly," says Phil.
“Retention is your best friend because it's bottom-line friendly. The people you retain know the business; they keep you going. If you lose them, you face the prospect of spending time and money recruiting and the additional expense of offering a bigger salary to attract talent.”
Although counteroffers are a popular retention tactic with both employers and workers, research has shown that, without improving the quality of the employee experience overall, the retained employee is likely to leave within 6 months of accepting the offer.
Read: Maximise your counteroffer
Top 5 employer retention concerns
37% – Heavy workloads/increased work pressures
31% – Poor pay
28% – Not being able to offer competitive salaries
25% – High rates of burnout
20% – Limited opportunities for career progression
Employers are firmly focused on talent recruitment for business growth and continuity despite UK economic uncertainty. Over two-thirds (69%) of business leaders feel ‘much more, or somewhat more confident’ about their growth prospects for the next 12 months, with confidence primarily driven by increased demand and expanding business opportunities.
Growth confidence has caused many businesses to focus on maintaining their current workforce, and almost half of employers surveyed (47%) said they were planning to add more permanent roles to their headcount over the next 12 months.
Hiring for contract, freelance or outsourced project support will be maintained as a means of mitigating burnout in core teams. Flexible recruitment strategies are an effective way for businesses to staff projects and transformation initiatives amid the unstable economic situation. Contract talent also represents a new hiring pool for companies to dip into when activity ramps up, or continuity challenges arise. Top talent from the temp hiring market also give businesses a reliable way to fill resource and skills gaps while testing candidates for a potential role in permanent teams.
A lack of competitive pay across industries and job roles is a primary concern for both employers and workers regarding attracting skilled talent. Most employers surveyed (41%) said they intended to increase salaries at a flat rate percentage, but 22% said they couldn't make further increases.
“The main question is: are we moving away from what was an employee-led market? Is it likely that we’re seeing a shift? Possibly, but not to the extent that employers might want,” says Phil. “I think the skills shortage is a problem that will prevail for years — it’s a generational issue, a societal and social mobility issue, and doesn’t have a quick fix.”
The most common employer concern around recruitment is the inability to offer competitive salaries. These fears aren’t unfounded, either — 63% of workers said they’d reject a job offer due to an unsuitable salary. This has led employers to rely on a diverse and unique suite of benefits to attract talent.
Workers have indicated they’d like flexible benefits, stress reduction programmes, and extended parental leave. However, very few employers are offering these perks.
Employers offering employee training and development opportunities stand a strong chance of retaining top performers and attracting new talent. Our survey showed that 35% of workers would like this as a perk, and recent research indicates it’s a powerful tool where talent management is concerned.
“Highlighting training opportunities is the most common strategy to attract talent,” says Phil. “This is also an excellent strategy to improve productivity, as is equipping your employees with the right tools to be efficient in their work. It also helps to mitigate the high rates of burnout that have emerged as a key threat to employee retention.”
Under the stress of a cost-of-living crisis, workers are looking for benefits packages that offer financial support for work-related costs. These include financial allowances for working from home, meal vouchers, and fuel allowances. Bonuses are also a welcome benefit, with 55% of workers surveyed saying they’d like to see this introduced in 2024.
Top 5 benefits workers don’t have but want in 2024
61% – Financial allowance for working from home
60% – Meal vouchers
58% – Paid sabbaticals
57% – Fuel assistance/allowance
55% – Agreed bonus
The employee experience sits as a core focus for talent management in 2024. This includes creating a culture of care, demonstrated through a range of health-related benefits. Pension schemes and life insurance are popular offerings from employers, but dental insurance is the top worker request, with 62% of survey respondents saying they’d like to see this offered in 2024. Other popular care-related requests include insurance for hospitalisation, outpatient, and private healthcare.
To learn more about upcoming hiring and remuneration trends and salary benchmarks for 2024, download the Robert Half 2024 Salary Guide now. For more information on retention strategies and talent management, visit the Robert Half advice blog or contact your local team today.
