Return of the Candidate Job Market: Salary Negotiations on the Rise
As the UK rapidly enters a candidate’s job market, the war for talent is heating up and companies are increasingly willing to enter into salary negotiations in order to secure top talent. 67% of HR Directors are more willing to negotiate salary rates with top candidates than they were a year ago – signalling to applicants that they are now in a strong position to push for higher salaries and benefits packages. It has been revealed that the attitude of hiring managers is changing – historically, candidates have been discouraged from proactively discussing their potential salary, especially within the early stages of the recruitment process. However, 7% of HR Directors now feel the company should always be the first to initiate remuneration discussions.
HR Professionals are now actively encouraging candidates to be upfront about prospective salaries, with 21% believing that it is appropriate for candidates to initiate remuneration discussions when they apply for a role or during a first interview. A further 46% of HR Directors feel it is appropriate to raise questions regarding salary and benefits packages in a second interview, whereas only 28% of HR Directors feel candidates should wait until the final interview or offer stage before raising the issue of remuneration.
This research comes during a time when HR Directors are witnessing a return of salary inflation, for existing employees and when seeking to recruit new candidates. 49% of HR Directors say they are operating in a job market where salaries are increasing, with no HR Directors reporting a deflationary wage environment. On average, HR Directors predict salaries for exiting employees with increase by 5.6% in the next 12 months, with 22% of companies anticipating an average wage increase of over 10%.
The job market has definitely changed, with the top performing candidates being in a position to negotiate and command higher salaries. As the market continues to improve, we will witness an increasingly inflationary wage environment, where companies will need to pay higher salaries to attract and retain top talent. Companies need to be aware that the best candidates are actively job seeking and receiving multiple offers, so movement needs to be quick in offering the job in order to secure the candidate.
It has been highlighted that employees demonstrating willingness to learn and advance (41%) would be most likely to secure a pay rise. Other reasons influencing the decision to offer exiting employees a pay rise include the time period since their last raise (32%), their technical competency and measurable output (31%) followed closely by tenure in the organisation (30%).
Top 5 Factors that would make companies inclined to offer a pay rise to an existing employee:
- Willingness to learn and advance
- Time period since last pay rise
- Technical competency/measurable results
- Tenure/company loyalty
- Professional conduct/collaboration /teamwork