Peter Linas, EVP of Corporate Development and International, Bullhorn on the dead end of pay rises.
Why Pay More?
The prevailing wisdom for many years now has been that higher salaries are not merely a reward for good performance or long service but a key means of competing with rivals and luring the best candidates.
There’s a very obvious logic to it, especially in markets where workplace culture is very similar across different businesses; if you can’t win them over in the interview, you might be able to win them over with a healthy salary. It’s a view that superficially seems to be supported by the facts: research from CIPD reveals that pay expectations are at a six-year high for private sector businesses, and research from Bullhorn indicates that 77 per cent of recruitment professionals expect clients to accelerate salary increases in order to compete for talent.
But it’s a very one-dimensional way to approach a complex, multi-faceted problem – and in the midst of economic uncertainty and skills shortages (78 per cent of recruiters consider skills shortages a major hiring challenge), it’s a method that could get companies into trouble – if it’s over relied on.
While substantial pay rises can work in certain circumstances, getting the best talent is about more than out-paying the competition: it’s about taking a thorough look at people requirements and developing a comprehensive, skill, and competency-based strategy to meet them.
If you’re a recruiter, here are three ways to help your clients do just that.
Reskilling existing candidates
Bullhorn’s research reveals that 77 per cent of recruiters consider reskilling an effective method for addressing skills shortages. These respondents aren’t wrong.
Reskilling helps recruiters create better candidates for their clients – developing their competencies in such a way that they integrate easily and seamlessly into the workforce. This starts with identifying gaps in these workforces, and figuring out which candidates and existing staff members are ideally placed to fill them. When these candidates are identified, consultants can be brought in to upskill them.
But if you’re a recruiter, you can help fill these skills gaps in other ways. Look at how you write job descriptions, for example: are there certain qualifications you’re asking for that might not be strictly necessary? If so, you might be filtering out candidates who might be perfect. Write the job ad based on what the job requires, not some imaginary essential criteria.
Hiring from more diverse backgrounds and labour pools
Diversity and inclusion should be moral imperatives for all companies and recruiters: one candidate should never be favoured over another on the basis of race, sex, age, orientation, privilege, or disability. But it’s also worth mentioning the commercial benefits of inclusive hiring practices: 60 per cent of recruiters believe diverse organisations are more effective than others.
So how can you help encourage more diverse hiring practices?
A good way to start is by removing gendered language from job postings. Research has shown that words such as ‘challenging’ are considered stereotypically ‘masculine’ – and therefore off-putting to female candidates. Rooting out bias in the screening process can also be effective: using AI-powered tools, any prejudices such as race, gender, or age can be rooted out.
So potentially, if you’re more kindly disposed to an Anglo-Saxon sounding name than an African or French one, or someone who went to a private school vs. someone who didn’t (59 per cent believe there’s a real opportunity divide between affluent and less privileged candidates), this won’t affect your judgment. This benefits the candidates because they’re getting a fair shake, and it’s benefitting you and the client because you won’t let unfamiliarity put you off making a potentially great hire.
Opening yourself up to diverse ways of working can also help. Some 60 per cent of recruiters think demand for new labour pools will increase this year – and that means exploring more contract or ‘gig’ work to fulfil your clients’ shorter-term needs.
Embrace more flexible working policies
Finally, recruiters and employers would do well to look at ways to make their workplace more appealing to potential candidates. This isn’t just about beanbag chairs or ping-pong tables, though they can certainly help improve morale. It’s about creating a workstyle that fits into their lives, rather than forcing lives to fit around work.
Millennials and younger workers prize flexible hours, because the 9-5 makes it hard to fit other commitments around the day-to-day activities of their roles. They also enjoy working from home – and unless you’ve got pressing security or logistical reasons not to, recruiters and clients should trust them to do so.
Even the most absurd pay rises won’t make balancing work and life any easier. Traditional recruitment processes and traditional recruitment methods won’t cut it in the new employment paradigm. Clients want high-skilled candidates, and candidates want environments where they can thrive – and still maintain some semblance of a personal life. As a recruiter, you should do everything you can to give it to them.