How employee skills shortage is leading to an increase in wages
In recent months we have heard employers in many growing sectors of the Northern Ireland economy openly stating that they are facing skills shortages. It's a theme that was reflected in Hays' annual salary and recruiting trends guide which found that over 80% of Northern Irish employers plan to hire additional staff in the next year, but 95% of the same group have experienced some form of skills shortage in the past year.
The challenge of finding suitable candidates for roles contributed to salaries in NI rising by 2% in the past year, slightly above the UK average of 1.9%.
It's further proof of a tightening labour market where people with in-demand skills are starting to demand a premium to join or stay with an employer. We surveyed 23,000 employers and professionals across the UK, including 650 in NI, and 73% of employers said they'd increased salaries in the last 12 months.
It's no surprise that salary is still the first thing most professionals will look at before considering moving role and so it makes sense that employers think that getting the best people only comes down to the pay package they are prepared to offer.
But our survey confirmed that it is not the only consideration, just one of a growing list of factors that includes non-monetary benefits, career progression opportunities, the organisation's culture and the importance it places on work-life balance.
The survey suggests employers need to do more to sell those additional benefits to make themselves attractive to high calibre candidates. For example, only 17% of the employers we surveyed saw work-life balance as a top priority, compared with 43% of NI employees, who ranked their work-life balance as poor to average. That indicates there are a lot of dissatisfied workers out there and creates a huge opportunity for employers who are proactive in using policies on work-life balance to differentiate themselves.
Achieving the right balance should help create an environment which feels rewarding and encourages greater productivity among employees. People are most engaged in their jobs when they have both purpose in and take pleasure from the role, and culture plays a big part in that. The commitment to work-life balance might involve introducing a full wellness programme and offering staff incentives to be more active - such as gym membership or yoga classes - or initiatives that foster strong mental health.
But it could be as simple as making people take a lunch break, having a clear policy on taking out of hours calls and emails so people know they can switch off, allowing people time off to volunteer, offering flexible working or allowing employees to occasionally work from home.
Tuning into what candidates want can help immensely in what is essentially a 'buyers' market'. There has been strong job creation throughout 2018 and unemployment locally is at an all-time low.
With opportunities out there, we know that the turn of the year is a time when people with attractive skills may start to consider moves to pastures new - so thinking about how you can improve work-life balance in your organisation now might prove useful for retention of your existing high achievers.
Given the intense competition, and at times, unrealistic salary requirements from candidates, Hays is seeing an increase in the number of employers who are prepared to consider 'hiring for potential' rather than the skills a candidate already has.
Hiring a candidate who can grow and develop into a more complex, challenging role is one way that businesses can avoid paying over the odds for the smaller group who already have the right skills. It still costs money to train that person, but if they are coming into an organisation with the right culture and progression opportunities, the chances of them being invested in their employer are much higher.
The survey shows hiring intentions remain high for 2019, which is welcome news. But if intentions are to become reality, some will have to think a little differently about how they can attract the brightest and best.