Salary increases and optimism prevail over Brexit uncertainty

Scottish businesses remain optimistic despite Brexit but say they are still challenged by skills shortages in IT, construction and property

A new report published by Hays shows that businesses in Scotland have an optimistic outlook, with 59% expecting their business activity to increase over the coming year and 63% planning to recruit over the next 12 months.
However, the survey also reveals that 69% of employers state that skills shortages are negatively impacting on productivity, and that they don’t have the talent needed to achieve business objectives over the coming year. This is also impacting on productivity, employee morale and plans for growth.
The Hays UK Salary & Recruiting Trends 2018 guide was compiled in a survey of almost 17,500 employers and employees across the UK, and shows that many organisations are being challenged by skills shortages, causing significant salary inflation in some sectors, including IT and construction and property.
  • 63% of organisations in Scotland will continue with their recruitment plans this year
  • However skills shortages are impacting on productivity, employee morale and plans for growth
  • Salaries across Scotland have increased by an average of 2.2% (UK average, 1.8%), with more significant increases fuelled by skills shortages
Akash Marwaha, Managing Director of Hays Scotland, said: “On the whole, organisations believe their activity levels will either increase or stay the same – that’s 94% pre-referendum, 93% post-referendum, and 95% in 2017. This shows hardly any change overall, which is a very positive indicator about the overall health of the economy. In addition, the average salary increase in Scotland is 2.2%, better than the UK average of 1.8%.
“However, there are still skill shortages in a number of different areas. This is leading to increased pressure on existing employees, low morale, and hindered productivity and growth. The survey also found that 54% of employees expect to move jobs in the next 12 months, so workforce planning should be an important priority for employers.”
Construction and property professionals have enjoyed the highest average salary increases, 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.
As employees are feeling the pressure, salary dissatisfaction is fuelling the discontent and careers are being stifled, employers are naturally concerned about the impact this could have on their ability to capitalise on their plans for growth.
The survey also showed that leadership and managerial skills are most in demand by employers, followed by technical skillsets, project and change management, and administrative experience.
Marwaha added: “For those employers looking for skillsets that typically come with experience, looking to other approaches to hiring may be pertinent during skills-short times. “For example, hiring temporary, contract or interim workers may hold the answer to filling skills gaps in the short term in order to meet peaks in demand.
“Greater investment in development and training in order to hire and consequently upskill more junior candidates or apprentices should also be considered. Employers need to ensure they can attract the best people and alleviate some of the pressure on their existing workforce.”
In Scotland, 44% of organisations are using temporary staff to fill the skills gaps, compared to 39% across the UK.
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