Is salary the only way to compete in a booming job market?

Job vacancies are literally at record levels in the UK at the moment. In July, the number of vacancies was just under 1 million for the first time on record. As the economy recovers from the effects of the pandemic, businesses are desperate to find new talent and to rebuild as they emerge from an incredibly challenging period.

So in this climate, how do you attract the top talent you’re so desperate for? Let’s look at some of the things you should consider – and pitfalls to avoid.

 

The salary spiral

When you’re up against a busy marketplace of businesses similar to yours who are looking to attract the same talent, many organisations. Upping your salaries to stand out in the job market is a dangerous tactic. This can lead to something called “wage compression” – where the salaries for new hires begin to reach that of longer-term and senior staff. This can cause widespread problems across your business – leading to disengaged and even disgruntled current employees, and even turnover.

 

Salary benchmarking

If you’re finding yourself being constantly outbid in the job market for salary, it might be time to ask – “are we paying our staff enough?” If your starting salary for a new hire isn’t on par with the rest of the market, there’s a good chance that your salaries need a review across the board.

An experienced people consultant can help you with a salary benchmarking project – gathering vital information on pay and benefits for roles in your industry and comparing them to what you currently offer. This will help you ensure a number of things:

  1. your current employees won’t be tempted away by better offers
  2. you can pitch salaries for new hires at the right point for your industry/market
  3. you reduce the risk of wage compression.

That being said, when it comes to attracting talent, you might have guessed by now – it can’t just be all about salary. And the data suggests that it isn’t.

get to grips with your salaries

Get in touch to find out how we can help review salaries in your business

What do employees want?

A study by IBM found that compensation and benefits was third on employees’ lists of priorities – topped by work-life balance and career advancement opportunities. According to a 2018 report, 46% of job seekers thought that organisational culture was very important, and 32% were willing to take a pay cut for a job they were passionate about or an organisation they really wanted to work for.

 

1. Work-life balance

Post-pandemic, more and more employees are experiencing burnout, and are looking for more flexibility in their jobs to achieve a healthy work-life balance. In 2020, 32% of people who changed roles did so because they needed more flexibility. This can look like flexibility in terms of time as well location. As we’ve covered previously, assessing how your current employees want to approach their role going forward – working remotely, a hybrid approach, or otherwise – should be top priority at the moment. Looking at your current landscape and how your employees want to fulfil their roles will help you to assess how you will be able to accommodate new hires.

 

2. Career pathways

The best talent for your business is often the most ambitious – the people who drive you forward with their willingness to progress and learn. Holding those people back by not giving them ample opportunity to develop means you risk losing them to your competition. 80% of workers planning to switch jobs in a post-pandemic world are doing so because they’re concerned about career advancement. So it’s vital that you ensure you have the structure in place to support ongoing development prior to going out to attract new talent. That’s why it’s useful to ask – are your current employees happy with their opportunities? Have they been encouraged to progress?

 

3. Organisational culture

15% of people have turned down a job offer because of company culture. “Great culture” is not something you can just write on a job advert – it’s something you have to live and breathe every day, because if you’re not, prospective new hires can pick up on it immediately. Defining your culture is tricky, but starts with reflecting on what it means to work for your business, on your values and your purpose.

Culture can be a broad topic, but common values include:

  • Outcomes-focused – emphasising achievements and results
  • People-first – prioritising fairness, tolerance and respect
  • Innovation – encouraging and empowering employees to experiment and take risks
  • Teamwork – emphasising collaboration

It’s important to ask yourself – do you know what your values are? Do your employees? Without engaging current employees, you can’t promote having a great culture and attract and keep new talent.

 

Seeing the bigger picture with employee engagement

To get a sense of what makes (and what could make) your organisation stand out and be competitive in a busy job market, a good place to start is assessing where you are now, what your employees like about working for your business, and what could be improved.

Undertaking an initial employee engagement survey and asking for regular feedback can help you get a handle on those three employee priority areas we identified above:

  • Work-life balance (or what we like to call a ‘Life-Work Balance’)
  • Career advancement opportunities
  • Organisational culture

Engage your employees

Talk Staff can support you with redefining how you and your employees live your company’s values and translate this into a strategy to attract the best talent. The foundation of your organisation is your people – so asking them what it means to work for you is a vital starting point.

As an Authorised Partner of one of the world’s leading employee engagement platforms, we’re offering your first employee engagement survey completely free of charge.

Actions for Today

  1. Upping salaries for new hires can lead to wage compression and wider problems and disengaged existing employees
  2. Attracting the best possible talent and people who will be the best fit for your business in a busy job market is about more than just salary
  3. Prospective employees value flexibility, advancement opportunities and culture more than compensation
  4. Salary benchmarking can be a useful exercise just to sense-check you’re where you need to be
  5. Employee engagement gives you a feel for why people enjoy working for your business – and what could be improved on
  6. You can use learnings from employee engagement to stand out to new talent
how can we help you?

Contact us at the Talk Staff office nearest to you or submit a business enquiry online.