Recruitment activity in the regional residential development sector was high, fuelled by the return of lending and new job creation from market growth and emergence of client side in-house teams. In contrast, Central London growth was sluggish and London based teams began to broaden their territories.
Modest growth in the Capital helped mitigate overall salary increases, but regional cities and the South East still encountered high levels of increase up to 15%. The ability for hiring managers to fill positions effectively was suppressed by skills shortages, particularly for the mid career level land buyers with proven transaction history and experienced delivery professionals. Employers had to adopt reactive hiring strategies, including salary increases, signing on bonuses and counter offers to overcome critical gaps in their teams, which was a catalyst for candidate movement and salary uplifts. There was also a notable trend from many developers for employing agile work forces through interim and contract hires on a project by project basis, and we expect this to increase as market uncertainty continues, which will help firms avoid risk and stay flexible.
Most significantly, there was a record high for job opening to applicant ratio for mid to senior level Land Buyers outside Central London, which peaked at 7:1 in the second quarter of 2018. This was fuelled by pressure from the lack of site availability and planning challenges coupled with market growth. Investment and Pension Funds as well as large corporate institutions were creating new opportunities and putting further strain on the acute skills gap for qualified and proven land and delivery professionals.
The considerable pipeline for delivery over the next 24 months will accelerate demand for development professionals. We anticipate candidates that have delivered from inception to completion will continue to be highly sought after and challenging to source. This will put further upward pressure on salaries and candidate movement.
The sector has been facing skills shortages and consequential salary increases in the last two years placing strain on profit margins. In reaction to this, a notable trend from hiring managers is a shift to accepting international candidates, and within the Greater London market, candidates with regional experience. Additionally, for the first time we are seeing hiring activity for skill sets from different asset classes and significantly more candidate movement from commercial into residential. Time to hire is improving for some organisations, who are simplifying processes to make quicker decisions. Furthermore, employers are more astute to competing in a candidate-led market and are bolstering candidate attraction with increased pensions schemes, work life balance, extra holidays and flexible working.
Another key trend this year has been the creation of public sector development companies within Councils. Whilst salaries are not as competitive as the public sector, their land portfolios and access to funds is helping to attract candidates seeking stability and exposure to development opportunities and new Build To Rent led housing strategies. Where Councils and Housing Associations are not able to compete for senior professionals through salaries, they are continuing to take advantage of a flexible interim workforce.
As the employer you must sell yourselves just as a candidate needs to sell to you.
Time to hire is one of the biggest threats to an employer in a competitive candidate market and it is one of easiest is to avoid. Ensure all stakeholders are available for interview and streamline your decision making process.
Flexible skill sets must be considered to overcome skill shortages. Allocate more resources and budget to on boarding and training.
One size does not fit all. To maintain a competitive advantage in the hiring market consider offering tailored packages.