South East: Business confidence to fuel recruitment drive and salary increases in 2016, says Hays

According to the 'Hays UK Salary & Recruiting Trends 2016' report, which includes a survey of over 3,500 employers and employees in the South East, increased confidence in the region’s economy will not only lead to an increase in hiring next year but will see employers come under unprecedented pressure to raise pay.

The report, launched in Oxford last month at the Said Business School, compiles analysis of salary data from Hays job listings, job offers and candidate registrations and shows salaries in the region grew by 3.3% in 2015, slightly higher than the national average of 2.3%. The average professional salary for the region is now £48,970 with employees in the construction, IT and marketing sectors seeing some of the biggest salary increases.

The annual survey shows that pressure over pay is only set to increase next year. Over three fifths (70%) of employers in the region expect to increase salaries in 2016 and 16% expect to increase salaries above 2.5%.

The report indicates that confidence in the region’s economy is high with 67% of employers in the region expecting business activity to increase next year, while 70% plan to recruit more staff.

Increased economic confidence has consequences for staff retention too, with over half (57%) of employees in the South East planning to switch jobs next year.

With over half the region’s workforce (54%) saying they are dissatisfied with their current salary and nearly a third (30%) moving jobs for this reason, it would appear that employers will need to dig deeper into their pockets to retain their best talent and take on additional work next year.

Dan Rogers, director of Hays in Oxford, said: “The highest salary increases for professionals in the South East were in construction, marketing, IT and finance. The latest ONS figures show unemployment in Oxfordshire is less than 0.5%, and with increasing confidence in the regional economy, many businesses are preparing to hire in anticipation of a busier 2016. However, companies should brace themselves for staff departures as candidates wield further power in the jobs market and look to move in search of better pay and opportunities.

“The region’s skills shortage remains a key concern and employers who can’t offer competitive remuneration packages will find it increasingly difficult to attract top talent, which could stifle growth for many Oxford businesses in 2016. For example, the demand for qualified finance professionals has rocketed as organisations are looking for people with technical knowledge to enhance their business growth and implement change.”

“2016’s war for talent will be particularly aggressive in the South East’s construction sector, which is currently riding high on a wave of property and infrastructure projects. The industry faces a formidable skills shortage and elite construction professionals are becoming steadily harder to find and more valuable for employers. Those construction businesses that can’t offer high salaries may need to compensate by providing alternative incentives such as robust training opportunities and clear paths for career development.”