Results from the June 2023 Robert Half Jobs Confidence Index (JCI) paint a turbulent picture of a highly dynamic jobs market. Employees are feeling increasingly confident in their position against a backdrop of ongoing skills shortages, a cost-of-living crisis and inflationary pressures. The JCI - the most authoritative report on the key economic and cultural factors influencing confidence in the UK labour market, produced quarterly in partnership with the Centre for Economics and Business Research (Cebr) - also found that, despite this confidence, professionals are feeling dissatisfied with their levels of remuneration. But with these complex factors in mind, what can firms do to secure the talent they need in an unpredictable market in the coming months and years?
Findings from the June 2023 Jobs Confidence Index
While the overall Jobs Confidence Index has reported an increase of 9.5 points on the previous study, suggesting positivity is abound, digging deeper into the data reveals a more unpredictable landscape. The Job Security Confidence pillar is the largest growth area with a jump of 35.3 points to 140.3, and shows that employees and job seekers are holding the power and are feeling increasingly confident in the value and importance they bring to their employers. This high degree of confidence has been largely driven by ongoing skills shortages, with professionals recognising the challenges that businesses face in finding new talent in the current climate. They clearly also anticipate that these difficulties will remain in place for some time, with 62% of employees saying they feel confident about their job over the next six months. Equally, the job search and career progression pillar rose by 8.6 on the previous quarter with 45% saying they felt confident or very confident in future career prospects over the next five years and just 19% feeling unconfident. However, at the same time, the data reveals that confidence in pay has declined by 29.1 points and currently sits at -36.6. This drop is largely down to inflationary and other macroeconomic pressures; in fact, total pay has risen by 5.8% annually but is down by 3% when adjusted for inflation in Q1 2023, highlighting the impact that external forces are having.
Retaining talent is key
Clearly, in this challenging climate and with the level of wage rises being demanded by some candidates out of the reach of most employers, businesses are not feasibly going to be able to pay more to attract and retain the staff they need to continue to grow. They, therefore, need to be more creative if they aren’t to lose out on these individuals and, ultimately, the war for talent. In such a competitive market, the focus must be on retention and a robust strategy will benefit firms in terms of business continuity and cost efficiency at scale. Employers should look at the full breadth of possible retention tactics including aspects such as perks, benefits and holiday arrangements amongst others. In addition, showing a degree of commitment from the executive level and, crucially, providing tailored and personalised career and skills development benefits can go a long way. Employers should listen to their staff and understand what motivates and matters to each individual. By appreciating that their workforces will be formed of different types of people with varying needs, and tailoring offers rather than providing a one-size-fits-all package, employers are likely to benefit from increased loyalty when alternative employment offers start to land. In fact, according to data from the latest Robert Half Candidate Sentiment Survey, respondents ranked flexible working arrangements, progression opportunities and access to training in the top five most valued perks after salary, with 35% of employees willing to take a pay cut in exchange for remote or flexible working arrangements. Having values that align with staff is also key; the survey also found that over half wouldn’t work for an organisation with different values to their own.
Long term focus
Ultimately, a holistic, personalised retention strategy can benefit an organisation’s finances whilst also avoiding the cycle of having to attract new talent. Although the outlook for the performance of the UK economy is broadly underwhelming, vacancies are likely to remain at a higher level for some time yet, with forecasts anticipating these to stay at around the one million mark for the remainder of 2023, meaning that the labour market will undoubtedly continue to be tight and the most prepared will win the war for talent. With this backdrop in mind, it’s clear that the power will remain with employees for some time yet – and with skills shortages making recruitment challenging and finances tight, boosting pay dramatically will only fuel a wage spiral leaving firms battling to attract new staff. This means that businesses need to prioritise retention; frankly, most employers can’t afford not to.
Read the latest Jobs Confidence Index report in full here.
