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Salaries set to rise in 2022 – but it's not all about the money!

Kate Allen, Managing Director, Allen Associates

Employers will be looking to significantly raise salaries in 2022 in a bid to address growing staff retention and recruitment challenges, according to the latest Labour Market Outlook report from the CIPD. Employers will also be looking at new ways to address the demand for flexible working and provide more training and development opportunities. Kate Allen, managing director at Allen Associates, explores the latest trends and suggests practical ways that Oxfordshire businesses can make themselves more attractive to existing staff as well as potential new recruits.

The professional body for HR and people development, the CIPD, is predicting average pay increases of 3% in 2022 as employers try to address growing retention and recruitment challenges. However with rising inflation, spiralling energy prices and other increases in the cost of living, there are concerns that these salary rises may not go far enough.

Over two-thirds (70%) of the 1,000 UK employers surveyed for the CIPD's Labour Market Outlook  say they plan to recruit in the next three months to March 2022 - but they don't expect it to be plain sailing:

  • 46% say their vacancies are hard-to-fill
  • 64% expect it will be difficult to fill vacancies in the next six months
  • 33% believe their hiring challenges will be ‘significant’

Almost half (48%) of employers with hard-to-fill vacancies said they had increased wages to try and address some of these issues.

This is reassuring for us as recruiters because we know that in the current market, most jobseekers are motivated by pay above all other incentives.

This has also been borne out by a recent survey by the world's biggest jobs site, Indeed. Pawel Adrjan, Head of EMEA Research at Indeed and a previous guest speaker at Allen Associates' HR Hub, said: "The jobs market is extremely competitive and looks to remain that way for quite some time, so the more employers are able to increase salaries for existing staff and new recruits, the better their chances of retaining and attracting the best people. In December 2021, year-on-year wage growth ticked up to 4.1% across all job postings, which is an encouraging sign. However, it is not enough to offset cost of living rises of 4.8% so employers will need to dig deeper and do more if they want to recruit well."

Pay is only part of the picture

We know that salary is the number one attraction for jobseekers and a major reason why people leave their current employment in search of a new opportunity.

We also know that the upward pressure on salaries may not be sustainable for many businesses, particularly those that don't have large cash reserves or external sources of funding. The good news is that recent surveys together with our own conversations with hundreds of jobseekers show that today's employees also place huge value on flexible working, learning and development opportunities, career progression, culture and wellbeing.

We're advising all our clients to scrutinise the following areas if they want to succeed at both recruitment and retention:

  • Benchmark salaries

Make sure your salaries are competitive and go the extra mile if you can; don’t be shy about advertising your salaries. The more open you are, the more likely you are to attract candidates at the right level, saving you time and effort in the long run

  • Review your benefits package

Revisit your benefits to make sure they are valued by your workforce; you may want to consider running an internal survey to assess which benefits are prized, which are no longer relevant and whether anything else could be introduced that would make a meaningful difference and give you a competitive advantage

  • Offer flexible working

There has been lots of talk about the ongoing demand for home working, particularly by office-based employees who have proved they can work well remotely. Many businesses have embraced this in some form or another, but not all. In our experience, employers that do not offer a flexible approach to where, when and how their staff work, will lose out to those that do.

  • Recruit from within

Research shows that employers that invest in their current workforce, re-shuffle roles and responsibilities within teams and promote internally, will retain their staff for longer; this approach may result in different or fewer vacancies needing to be filled externally

  • Learning and development

The pandemic has increased people's appetite for learning. A robust learning and development programme may be very attractive to existing and prospective employees, particularly if it is accompanied by a clear career pathway

  • Culture

This is still a key consideration for many employees and jobseekers. After what has been a very difficult couple of years,people are increasingly clear that they want to work for caring and empathetic employers that put their people before profit and have a clear sense of corporate social responsibility. It's an ongoing challenge to demonstrate this in a remote working environment, particularly as virtual recruitment and onboarding has become entrenched in many businesses. Nevertheless, solutions have to be found as it is can be a deal breaker

  • Employer brand

Look closely at your offering from an employee's perspective. It might be worth conducting internal focus groups with a cross-section of staff at all levels to challenge your understanding of your greatest selling points and the reasons why people want to work for you, rather than a competitor. Be very clear about what makes you special and then shout about it.

  • Make the right match

Choose people who match the requirements of the role and your company values and culture – rather than focusing solely on people with experience of working in your industry sector. This approach is not only likely to help you to make a better match, but it will also attract a more diverse pool of applicants and enrich your business by introducing new approaches and different ways of looking at things.

Surge in quality candidates

We recognise that this continues to be a challenging time for many employers as retention becomes a greater priority and the ongoing shortage and quality of job applicants hampers growth.

Fortunately, we have seen a surge in the number of great quality jobseekers registering with us who are interested in Oxfordshire-based roles at all levels in PA and Administration, HR, Marketing and Finance.

If you'd like to know more about the current market, then these resources may be of interest to you:

Oxfordshire Recruitment Market Overview (January 2022)

Press release on the CIPD Labour Market Outlook (February 2022)

For advice or support with your job vacancy, please contact me and I will be happy to help.

About the Author

Kate Allen is the founder and Managing Director of Oxfordshire and London-based recruitment agency Allen Associates and can be contacted at

Read Kate's bio and meet the rest of the team, here.

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