Return of the candidate job market: Salary negotiations on the rise

• Two thirds (67%) of HR directors are more willing to negotiate salaries with leading job candidates than 12 months ago
• Upfront negotiation – a fifth (21%) of HR directors think it is appropriate for candidates to initiate remuneration discussions during the application process or first interview
• 5% wage increases for existing employees expected in the next 12 months

London, 29 April 2015 – As the war for talent heats up and the UK rapidly enters a candidate’s jobs market, new research¹ from leading recruitment specialist Robert Half UK reveals companies are increasingly willing to enter into salary negotiations to secure top talent.  Two-thirds (67%) of HR directors are more willing to negotiate salary rates with top candidates than a year ago, signalling to applicants that they are now in a strong position to push for higher salaries and benefits packages.

The study also reveals the changing attitude of hiring managers to discussing remuneration packages with would-be employees.  Historically candidates have been dissuaded from proactively discussing their potential salary, especially early in the recruitment process.  However, the research reveals that less than one in 10 (7%) of HR directors now feel the company should always be the first to initiate remuneration discussions.

Being upfront about the prospective salary for a post is increasingly welcomed by HR professionals with 21% believing it is appropriate for candidates to initiate remuneration discussions when they apply for a role or during the first interview.  A further 46% of HR directors believe it is appropriate to raise questions about salary levels in a second or subsequent interview.  Only 28% of HR directors feel candidates should wait to the final interview or offer stage before raising the issue of remuneration.

The research comes at a time when HR directors are witnessing a return of salary inflation, for existing employees and when seeking to recruit new candidates.  Half (49%) of HR directors say they are operating in a job market where salaries are increasing, with no HR directors surveyed reporting a deflationary wage environment.   On average HR directors predict salaries for existing employees will increase by 5.6% in the next 12 months, with almost a quarter (22%) of companies anticipating an average wage increase of over 10%. 

Phil Sheridan, UK Managing Director of Robert Half, commented: “The tables have turned in the job market and top performing candidates are now in a position to negotiate and command higher salaries.  As the market continues to improve we will witness an increasingly inflationary wage environment, where companies will need to pay higher salaries to attract and retain top talent.  Companies need to be aware that the best candidates are actively job seeking and receiving multiple offers, so working with a specialised recruiter can help manage salary expectations early in the process.”

HR directors highlighted that employees demonstrating willingness to learn and advance (41%) would be most likely to secure a pay rise. Other reasons influencing the decision to offer existing employees a pay rise  include the time period since their last raise (32%), their technical competency and measurable output (31%) followed closely by tenure in the organisation (30%).

Top five factors that would make companies inclined to offer a pay rise to an existing employee

Willingness to learn and advance

Time period since last pay rise

Technical competency/measurable results

Tenure/company loyalty

Professional conduct/collaboration /teamwork

To keep their best employees, companies should ensure they are paying their staff a competitive salary, benefits and bonus structure. The best way to do this is to consult industry publications, like the Robert Half Salary Guide.

ENDS

Notes to editors

¹ The bi-annual study was developed by Robert Half UK and is conducted by an independent research firm.  The study is based on more than 200 interviews with senior HR executives from companies across the UK, with the results segmented by size, sector and geographic location.