Senior professionals can expect pay increases of up to 25% in the first quarter of 2022, as the economy begins to open up following the lifting of Omicron-related restrictions and companies fight to hold on to their best staff.
Experienced staff with salaries of £80,000 and above across a wide range of disciplines from marketing to finance and IT are already beginning to enjoy rises of £20,000 a year or more, according to recruitment firm Robert Walters.
The hunt for talent also extends further down the pay scales as professional services companies budget for an increase in their wage bill of between 10% and 15% – the largest increase seen since 2008 and almost three times the inflation rate, the recruiter said in its 2022 UK Salary Guide.
Chris Poole, the firm’s managing director, said that after a year of double-digit pay increases for new joiners, firms were under pressure to ramp up pay rates for existing staff to prevent them quitting for a rival.
Business lobby groups have reported many of their members complaining of lengthening backlogs of work made worse by a shortage of staff. The situation has been made worse by many over-50s suffering from long Covid while experienced, skilled workers have quit their jobs in search of a new challenge, dubbed the great resignation.
A switch to digital commerce during the pandemic has also created a dislocation in the jobs market, stranding many people in jobs that are no longer in demand.
The report found that in the past year, wages for new starters grew on average by 6% to 8%, while those professionals who moved into industries at the forefront of fighting the pandemic or meeting pandemic-related demands, such as technology or healthcare, saw pay hikes as high as 15% to 20%.
“Looking at the year ahead we will see more companies raise the pay of their existing employees to sit in line with new starter salaries,” he said.
Over a third of businesses (39%) said they were increasing pay to keep up with rising inflation, he added.
Many companies, unable to recruit from the wider jobs market, are looking to recruit and train existing staff, which often means promoting senior executives from regional offices who refuse to move to London.
“There is a lot of compromise and flexibility in the search for talent,” a spokesperson said. “So boards are allowing people to work from quite far away and making commitments that executives only need attend a proportion of meetings in person.”
She said the acceleration of digital services meant that tech savvy executives who could interpret large amounts of data were “head and shoulders above the rest”.
However, many workers, including some of those with in-demand skills, are starting from a low base in their search for higher wages. More than half (54%) of workers said they were expecting a pay rise this year after a two-year salary freeze.
The survey also unearthed a large degree of staff dissatisfaction from their treatment by employers during the pandemic, with two-thirds saying they will leave their job if they are not rewarded fairly. Three-quarters said they were “very confident” about job opportunities in their sector this year.
The report said the majority of professionals gave top priority to “excellent compensation and benefits and a bonus scheme,” while 40% put job security as their most important requirement.
“In fact, flexi-hours (29%), remote working (22%), and holiday entitlement (20%) all rank much lower in importance for professionals – perhaps because over half of white-collar workers stated that they ‘wouldn’t bother’ asking about flexi-working in a job interview in the coming year because they naturally assume ‘it is a given now’,” it said.