Compared to Q1 of the 22/23 Financial Year, the number of job vacancies registered online has fallen marginally throughout Q2 which is demonstrated in the graph below. However, it’s clear that hiring is still a prevalent topic within UK companies.
Source: Office of National Statistics
As the unemployment rates fall below pandemic levels, the number of people employed is at an all-time high, sitting at 29.7 million. Whilst this can undoubtedly be seen as progress for society, it leaves businesses across the UK struggling to recruit talent at all levels.
According to the ONS, the number of pay-rolled employees has seen an increase of 649,000 employees since February 2020 (just before the nation went into lockdown), and September 2022 increased by a further 73,000 from August 2022.
Real average weekly earnings, which is the average amount of pay adjusted for inflation using consumer price inflation (CPIH), have fallen due to rising inflation. This has wiped out the increase in earnings from the post COVID tight labour market. Though figures are still above the decrease in earnings during COVID itself.
Source: Office of National Statistics
Even though employees might not have had an actual salary reduction, their purchasing power has dropped which has stimulated not just a desire, but a need for more personal stability/income.
I believe four key themes will shape how businesses need to approach hiring and people management for the remainder of 2022 and into 2023.
· Attrition – where your business is most vulnerable
· Attraction – engage with the people we want
· Connectivity – diversification of talent and skills
· Productivity – how to address ‘quiet quitting’
Throughout this report I’ll cover each trend and how leaders can positively address issues, challenges and opportunities which might arise.
Attrition – where your business is most vulnerable
The lower-level, more junior employees (around the £25k - £30k mark) are likely to be seeking a salary increase in response to societal changes, but it’s unlikely that a Development Manager who has an annual salary of £130k will be doing the same.
A senior and highly skilled professional is looking for a better opportunity; one that better suits their lifestyle, brings a new challenge or offers more responsibility. Senior personnel are more commercially astute, therefore will have an understanding that everyone is feeling the pinch, including businesses. The top of organisations should have a much steadier rate of attrition.
In comparison, those who sit within the lower salary bands are far more likely to be initially and, in some cases, solely attracted to a higher salary. Attrition towards the bottom of an organisation is likely to increase (when are cleaning companies ever not hiring?), as bills continue to rise, and personal pressures continue to mount.
According to deverellsmith’s own data, graduate salaries have seen no major increase in the past 20 years. Once the recent cohort of graduates gain relevant experience within their field, I expect they’ll be seeking out alternative employment that can offer a bigger pay packet and perhaps greater flexibility rather than remaining loyal to their employer, unlike how it was 10 or 20 years ago.
Glassdoor reported that the average graduate salary within the technology industry is £36,665, the average graduate salary in finance is £31,617 and in sales it's £27,000. According to Hintel's Building Tomorrow Together report 2022, the average junior salary in real estate is £24,642. The basic salary for an agency role is significantly lower than this, sitting at an £18,000-£22,000 basic and £28,000-£32,000 OTE.
Many of these competing industries offer greater flexibility, progressive benefits and modern working environments - what can the industry do as a collective to appeal to future talent?
Wage inflation at the close of 2021 and start of 2022 was unlike anything I had experienced in my 20 years as an executive search consultant and recruitment firm owner. Mid-senior level professionals were receiving 25-30% pay increases; however, this has certainly slowed down and balanced out.
Demands are less aggressive, and I think that’s down to lower confidence levels as the economic landscape stimulates uncertainty amongst individuals.
Following the unfamiliar wage activity which took place in the first half of the year, knowing what to pay your employees is now critical. It’s one of the most common questions we hear from employers across the property sector – what is the market paying for X role?
I’d strongly advise gaining the knowledge on what other organisations within your market are paying, to ensure you don’t pay too low (lose people) or too high (lose profit and set a salary trajectory/culture which is unsustainable). This knowledge can be gained through case studies or benchmarking projects (link to product offering).
To combat inflationary attrition with your lower-level junior employees, consider one-off payments to support them through the tougher financial times. It’s something we’ve offered at deverellsmith and I know many other large corporations (Marks and Spencer as an example) have also followed suit.
Attraction – engage with the people we want
The rise of social media has now firmly made its mark on recruitment. The platforms offer a free and effective way of communicating your employer brand to all levels of seniority. LinkedIn is highly effective for connecting with C-Suites, senior personnel, management, and mid-level talent.
However, we find the platform to be a lot less successful in attracting graduates and those early on in their career who are generally less receptive. Gen Z’s are now likely to turn to influencers for career advice, how to handle workplace situations and tips on progressing, rather than reading a blog post or help!
As I mentioned in my first point, this talent pool is where you’ll suffer the most with attrition and will need an ever-evolving strategy for talent attraction or your bottom line could seriously suffer.
This leads me to TikTok… now, I’m by no means an expert on the platform but I do know that it’s the future. There are a number of employer brands who do an exceptional job of showcasing what life is like as an employee, and its all-around subtle employer brand building.
Nailing your Employee Value Proposition is where this all begins. What can you offer employees that your competitors can’t? What makes your culture unique to you? What makes your business inclusive?
Consistent and transparent messaging is key. You can find a helpful guide on building your EVP here.
Every new employee wants a place to feel comfortable and demonstrating this through real life example videos should be a way of pulling employees into your business. The most attractive employer brands have a massive presence on social media, and it’s usually the people driven content that has a real impact.
Connectivity – diversification of talent and skills
At the beginning of October, I polled my network and asked if they would accept a job which was fully remote. 61% of participants responded ‘Yes’, 31% responded ‘No’ and 8% responded ‘Depends on…’ which I like to think translates to ‘yes depending on salary, brand and/or opportunity’.
Source: Building Tomorrow Together 2022/23 Report - Hintel
The working landscape has changed; remote working and video calls are now the norm which has produced one major counter inflationary opportunity, and that’s to hire from further afield.
A question business leaders can ask themselves is: does a credit controller need to be hired into headquarters?
I say this after deverellsmith has seen an uprise in remote only opportunities. One example being, a real estate firm we partnered with hired a credit controller who was 30% cheaper than those who were based in London, and the employee received a significant pay rise. Their outgoings were significantly less than their London counterparts and the opportunity suited their lifestyle.
We now have this opportunity to increase connectivity across the UK and internationally. Traditionally, the globalisation of recruitment has been for low skilled labour, so I encourage all business leaders to consider the format for high skilled opportunities too. It’s a cost-effective way to scale your business and address expansion challenges.
There are many sectors under much more distress than real estate, ones that underpay or low-ball employees. This is a golden opportunity to hire (assuming it becomes a better hiring opportunity), and to bring in more diverse cognitive skills.
As a collective, we have an opportunity to try and attract employees outside of offering a bigger package. I believe this is one solution to keeping wages at a manageable level whilst attracting a consistent pipeline of talent.
There are a plethora of cost saving exercises; earlier this year the deverellsmith group launched our sister company, Hintel. Having closely observed the many talent dynamics over the past 20 years, we believed this was the right time to launch a bespoke outsourcing solution to respond better to our clients’ needs. You can learn more about how recruitment outsourcing saves you time, money and maximise visibility here.
Productivity – how to address ‘quiet quitting’
I’ve seen and heard a lot about ‘quiet quitting’ over the past few weeks.
Most mid-level professionals within real estate (especially the transaction side) change jobs and/or employer every 2-5 years. Our recent report, Building Tomorrow Together – which shared results from our survey that was sent to 80,000 property professionals at all levels of seniority, asking them to provide an insight about their career to date and future plans – highlighted that the average tenure for a junior employee is 1.7 years.
When junior employees were asked ‘Would you be happy doing the same role in 5 years?’ 65% of respondents answered yes, and 96% of respondents stated that they would look for a new job if they didn’t receive the right support to progress their career. My advice is to always have a clear development programme in place to avoid quiet quitting and maintain motivation amongst all levels of employees.
Source: Building Tomorrow Together 2022/23 Report - Hintel
A change of attitude towards work (especially for younger generations in the Western World) has been highlighted as an area of concern. The World Economic Forum listed ‘Youth disillusionment’ as its 8of 10 of the biggest risks to the world economy in 2021.
During times of constraint, pressures on a business rise which leads to leadership feeling stressed. This then tends to be fed downstream and a level of dissatisfaction infiltrates amongst the workforces.
How do you balance underperformance, financial pressures, and sentiment? It is really hard to get this right and one that is different for every organisation.
One piece of advice I would give every business is to be honest and communicate. The pull factors for your employees from competing businesses are likely to decrease over the next few months, but push factors created internally is likely to increase, which needs to be managed.
Communicate performance metrics to achieve promotions, ask employees if they are being challenged and create forums for employees to be honest too. At deverellsmith, we send regular employee surveys and host town halls to ensure our employees feel like they have a voice.
If you'd like to receive Hintel's Building Tomorrow Together report which shares results from a survey which was sent to 80,000 property professionals at all levels, asking them to provide insight about their career to date and future plans, complete the form below.