Professional salaries in the UK will remain relatively flat throughout 2019, as Britain’s pending departure from the EU impacts employee confidence and business willingness to spend.
The findings come from the annual Salary Survey produced by global recruitment consultancy Robert Walters.
“Uncertainty around Brexit has created a fear of ‘last in first out,’ which in turn has meant that employees are less willing to move roles as swiftly as they would have in previous years,” states Chris Hickey, CEO of the UK, Middle East & Africa at Robert Walters.
“As a result, despite there being high demand for specialist and highly skilled professionals, companies are finding themselves contending with a UK-wide candidate shortage across most disciplines.”
The news will not be met with a warm reception, as almost half (46%) of professionals currently believe that companies do not offer a competitive enough salary – according to recent Robert Walters survey.
Exceptions to the trend
However in-spite of Brexit, there will be pockets of intense hiring activity and salary increases within banking and financial services - driven by demand for skills such as compliance, risk and audit.
In fact, salaries in Internal Audit are expected to rise by as much as 20% across all levels. For those in the Risk sector, starting salaries (1-3 yrs’ exp) will see a 5% growth, with this increasing at each level to 8-10% for those with 7-10 yrs’ exp.
Daniel Connors, Director of Financial Services at Robert Walters, said: “When it comes to Brexit, banks we are talking to have a variety of different contingency plans and they will implement whichever one is necessary. The biggest worry for them is a no deal Brexit.
“We are seeing a decrease in candidate confidence in terms of people actually wanting to move in light of relative uncertainty. We have also seen some hiring pauses and we have seen longer timescales in terms of new hires being signed off.
“Nonetheless there is still a lot of recruitment activity for technology jobs in the banking and financial sector, particularly around information security, machine learning, natural language processing and data engineering.”
Robert Walters analysis shows that the UK continues to be the leading country in Europe in terms of candidates with IT skills, and the number of roles advertised in the tech sector increased by 11 per cent from 2016 to 2018.
In fact, tech hubs in the regions are growing at three times the rate of London, with job creation in Manchester up 29 per cent from 2016 to 2018, 22 per cent in Leeds and 20 per cent in Birmingham. The demand was also reflected in salaries, where IT talent in hubs outside of London could expect a pay increase of 20% this year.
Last year, the UK gained more IT talent from abroad than it lost by a margin of ten per cent. Analysts at Robert Walters expect job creation in the sector to increase by a further 11 per cent across the UK this year.
James Perry, Associate Director of IT at Robert Walters, said: “The UK tech sector is continuing to grow strongly and we expect that to continue. It is not one that is overly dependent on supply chains and is a genuinely global sector, so it appears to be largely unaffected by Brexit.
“Companies that are going to be successful in the future are those that are investing in tech – AI, robotics, e-commerce and fintech.
“London has what is probably the best pool of talent in the world in terms of tech and will continue to thrive and lead in this area. However, we are seeing a rebalancing in terms of regional centres such as Manchester, Birmingham and Leeds growing even more strongly in terms of tech jobs, which is a good thing for the economy.
“There is definitely a candidate shortage in certain areas of tech in London which is helping to drive this trend. But it’s also about costs and new ways of working.”
Companies bulk-out benefits packages
Despite employees becoming risk averse, Robert Walters data shows that it has been ‘business as usual’ for companies – with the number of jobs being advertised remaining unchanged.
“Whilst trade may be consistent, freezes on spending have been commonplace for most companies – making it difficult for hiring managers to lure candidates into job offers without an increase in pay,” states Chris.
“To counter this, businesses have been investing in themselves and their own infrastructure, in order to become a more all-round appealing place to work.”
According to Robert Walters research, 75% of Millennials consider an engaging and fun workplace an important part of their job.
Chris Hickey adds: “It will continue to be a competitive market in 2019 and so in order to attract top talent and high-performing millennials, companies should invest in their employer brand and improve softer benefits including flexi-hours and the workplace environment.”
Career progression (91%), brand personality & cultural fit (58%), rate at which company adopts new technologies (42%), a sociable team culture (30%), and job satisfaction (25%) are considered the most valuable to the Millennial workforce – outside of pay.
“Our advice to businesses facing candidate shortages is to be flexible and consider hiring professionals with transferrable skills. Companies should consider taking on candidates who are ambitious and fast learners, even if they are not an exact fit for the job description, in order to support areas of growth within the business,” states Chris.
Setting sights on Europe
A number of companies have already started to gear up for a post-Brexit market by setting up offices in major cities around Europe. Robert Walters analysis shows that headcount at the world’s biggest investment and corporate banks grew more strongly last year in Frankfurt (+ ten per cent), Milan (+ eight per cent), Paris (+ six per cent) and Ireland (+ three per cent) than in London (+ two per cent).
Daniel Connors, Director of Financial Services at Robert Walters, said: ‘Financial services is busy in centres such as Frankfurt and Dublin. In terms of the numbers of jobs that have moved, it is still extremely low when compared to the overall London financial services market.”
Download the Robert Walters 2019 Salary Survey here.