With inflation at a 40 year high in the UK (9.4%) and a 31 year high in Australia (5.1%), the cost of living crisis is impacting economies around the world. However, it’s clear that wage packets of workers in some countries are under far more pressure than those in others.
Government finance chiefs and economists have been cautioning against employers giving inflation busting pay rises, with a narrative that goes something like this…
Simple, isn’t it? However, some think not! For some, this logic doesn’t stand up in the context of the cost of living crisis that is impacting economies around the world. For many, the background to the cost of living crisis is best described by this narrative:
In the eyes of many, this doesn’t quite add up. And for some, the case for below inflation pay rises is not made. To those who have in-demand skills the current job market situation is nothing short of a golden opportunity.
It’s not only inflation that is at record levels. With vacancies also at a record levels in the UK and Australia, the talent gap is well documented by official figures. And anecdotal evidence from the recruitment industry lays stark how those with in-demand skills may be exploiting the situation by selling their skills at a premium.
Some good candidates are applying for multiple jobs and receiving offers from several. They are then able to pick and choose, with the toughest cookies playing prospective employers off against one another to write their own dream ticket.
Whether it is for contract and freelance, or permanent hires, agencies and employers may have to sharpen up their negotiating skills to prevent budget busting pay packets increasing fixed costs and impacting bottom lines.
Tough negotiation maybe an option, but when the lack of skills is holding a business back by either preventing it servicing existing customers or preventing growth, then playing hard-ball on new hire pay and benefits may be self-defeating.
Conventional objections such as package expectations being unrealistic and that the wage is determined by the pay band that applies to each role are unlikely to put off new hires that are determined to get what they want.
Perhaps the best way to secure the skills your clients need on acceptable terms is to get smarter in the way that increased packages are put together and paid. Some examples of what this might include are:
The challenges of the recruitment market sure are complex! And it’s not just negotiating to secure the talent your clients need. Technology is also something of a minefield. ETZ is the RecTech partner of choice, helping agencies to navigate the pitfalls and obtain excellent value from technology.
ETZ’s leading timesheet, invoicing and payment solution, streamlines the back office processing of your recruitment agency. To find out more, call us on 0800 311 2266 or book a demo.
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