Recent official employment figures from Her Majesty’s Government are rather impressive.
According to the Department for Work and Pensions (DWP) press release issued on the 18th May:
- The employment rate in the UK has hit a record high of 74.2%
- The unemployment rate remains at 5.1% (the lowest in a decade and below recession levels)
So with fewer benefit claimants and more people paying taxes this is clearly a good news story for the national finances.
Yet the same statistics can pose a problem for employers. Low levels of unemployment suggest a restriction in the available (and suitable) talent for employers who wish to increase head count. The laws of supply and demand therefore dictate that the cost of recruiting and retaining staff is liable to increase for many – perhaps most – UK employers if this success story continues. This may be the start of yet another war for talent in the UK jobs market.
So what can employers do to combat this dynamic? The most obvious answer is (as ever) to pay higher wages to employees, and the DWP release confirms that average wages before bonuses grew by 2.1% over the last year. Given current levels of inflation such an increase does indicate a genuine improvement in take home pay. Yet such relatively minor increases may not be enough to attract and retain key employees, and most organisations will struggle to find greater reserves to increase pay awards across the board.
So a more pragmatic solution for many is likely to be getting better value from their existing employment spend, and ensuring employees fully understand and value all the components of the employment package is one of the most cost-effective ways of achieving this. However, and as we covered last month here, less than half of employers regularly communicate benefits to employees, with 14% of those questioned* admitting that they don’t undertake any benefit communications.
These figures suggest that many employers are currently content to fund and/or provide an employee benefits package, but without seeking to maximise the return on that investment. Such an approach may have been acceptable and understandable during the recent global downturn, but perhaps needs to be reviewed in light of these recent employment statistics.
The stats suggest that the war for talent may be about to begin afresh, and we would therefore encourage employers to undertake a review of their benefit communications before the battle-lines are established.
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