West Midlands employees enjoy strong salary increases in 2017

Despite this, only half (51%) of the region’s employees rate their work-life balance as positive, lower than the UK average of 56%, with this dropping to 46% in Birmingham

Nationwide, skills shortages are impacting on productivity, employee morale and plans for growth

A new report from recruitment agency Hays shows that businesses across the West Midlands are optimistic about the year ahead, with 60% expecting their business activity to increase over the coming year and 70% planning to recruit over the next 12 months. However, the survey also reveals that 76% are finding a shortage of suitable applicants a big challenge, with 38% turning to temporary professionals as a solution.

In Birmingham, businesses are confident in their workforce with 75% saying they have the talent needed to meet current objectives. However, recruitment for the year ahead is likely to be challenged by skills shortages with 59% of firms in the city stating that they expect to encounter a lack of suitable applicants.

In a survey of almost 17,500 employers and employees, including 773 in the West Midlands, the Hays UK Salary & Recruiting Trends 2018 guide shows that organisations in the UK are being challenged by skills shortages. 70% of employers nationwide stated that they have experienced moderate to extreme skills shortages and only 6% say that they haven’t experienced any skills shortages in the past year.

It is these skills shortages which have supported an average salary increase of 1.8% across the UK and 2.1% in the West Midlands. Construction and property professionals have enjoyed the highest average salary increases in the UK, with an average of 2.7%, followed by IT, with an average increase of 2.3%, and engineering at 2.2%. Skills shortages are also fuelling some significant salary increases. For example, cyber security information security analysts and engineers have enjoyed some of the greatest rises at 10.5% and 8.4% respectively.

Not only are the skills shortages leading to wage pressure in these areas, but they are impacting on organisations’ productivity. 59% stated that skills shortages are impacting on productivity, while 30% of organisations stated that it was impacting on growth and 27% stated that it was impacting on business development plans.

Skills shortages are putting pressure on employees in the West Midlands, with just 51% rating their work-life balance as positive and 45% stating that they see no scope for progression in their organisation. In Birmingham, employees said that commuting time made the biggest impact on their work-life balance.

This situation is likely to be exacerbated further with 55% of employees in the region planning to move jobs in the next 12 months and high salary dissatisfaction for 61% of employees. Almost a third (28%) cite salary and benefits as their main reason for wanting to leave.

Mark Staniland, regional managing director of Hays in the Midlands, said: “Despite the economic and political uncertainty and challenges faced by UK organisations, it’s encouraging to see that businesses in the West Midlands are planning to continue with their recruitment plans and salary increases are strong here.

“However, skills shortages have the potential to severely limit companies’ growth, hinder productivity and damage employee morale at a critical time. Employees are feeling the pressure, salary dissatisfaction is fuelling the discontent and careers are being stifled. Employers are concerned about the impact this could have on their ability to capitalise on their plans for growth.

“We therefore suggest that organisations look to make workforce planning a key strategic priority, invest in their employer brand, and use contingent workers for more than just projects. Employers need to ensure they can attract the best people and alleviate some of the pressure on their existing workforce.”