Salary Inflation Continues To Rise Albeit More Slowly

Salary Inflation Continues To Rise Albeit More SlowlyJune, 2024A note on our ‘Industry Moves Trends Reports’ and ‘Salary Surveys’. These two pieces of market intelligence are designed to be used together.The salary survey provides detailed information about lower, average and upper quartile salaries for a range of procurement and supply chain roles in the construction industries along with detail into other elements of financial and non-financial packages.The Industry Moves Trends Reports focus on the uplift in salary achieved by candidates (in the same roles as the Salary Survey) who have successfully moved company in the last six months.Combining the uplifts achieved in the Industry Moves Trends Report with the Salary Survey salary bands will provide hiring managers with a good indication of the salary they will need to offer to attract their preferred candidates.Industry Moves Trends Summary – April 2024According to our recently published Industry Moves Trends Report, employers are continuing to offer very healthy (double digit) increases on basic salary to tempt upper quartile employees to risk moving to a new role. This is hardly surprising given our Salary Survey at the start of the year highlighted that across the construction industries 73% of procurement and buying employees benefitted from a pay rise last year (averaging 5.3%). Exactly how much of an uplift employers need to offer depends on location and on the role - for example, procurement and supply chain managers and senior managers are no longer enjoying quite the same uplifts in salary as buyers and senior buyers. So, what percentage uplift do you need to offer to secure your preferred candidate? And what are the main forces determining these uplifts?While it was widely anticipated that recruitment was going to slow significantly during Q1 2024, the volume of roles that need backfilling (i.e. an employee has moved on and needs replacing) has resulted in the market remaining pleasantly busy. In part this is because activity levels in northern England have matched the traditionally high activity levels of recruitment in the southeast. That said, the average salary uplift we’ve seen from candidates moving roles in the south-eastern England has been noticeably higher than those in the north east and north west (average uplift of 20% in the south east compared with an average of 12% across the north).Demand for mid level procurement and supply chain management skills (relative to candidate availability) has reduced compared with twelve months ago as we would expect in a contracting market and this is noticeable in the uplift on basic salary needed to attract upper quartile candidates. Employers have been able to secure their preferred candidate with an average uplift on basic of 13%. That compares with 16% only nine months ago and 21% 18 months ago. In other words, salaries are continuing to rise but at their lowest rate since pre-COVID.In contrast the demand for buyers and senior buyers remains consistently high and that is reflected in the continued premium employers are having to offer to secure better candidates. Our most recent survey highlights the need to offer in increase on basic salary of 17%, compared with 16% six months ago and 17% a year and a half earlier.So what does all this mean for hiring managers?If the market continues to cool then the uplift needed to attract procurement and supply chain managers may drop further. With UK elections in July followed by US elections in November, and indications that interest rates may start to drop in the coming months, it is quite possible the market will start to pick up again.Irrespective of the macro forces driving the industry, demand for good buyers and senior buyers shows no sign of slowing as operational procurement for live projects remains so important. However, most companies’ salary bands can’t match the inflated salaries proven senior buyers are demanding to persuade them to move.While a few hiring managers are successfully attracting proven senior buyers by focusing on the softer elements of their hiring packages such as flexible working, career development and bonuses, many companies are taking a punt fast tracking competent and ambitious buyers, giving them opportunities to accelerate their careers.To view the full results, please visit our website.About the author: Adam has over 20 years’ experience recruiting procurement and commercial professionals across the construction sector.Recruitment isn’t just about filling vacancies. The people you bring into your team shape culture, performance, and ultimately long-term success. #J-18808-Ljbffr