Cash (base salary) is super important in this market – here is why..

Everyone knows that the market is both strong and challenging (depending on what side of the fence you fall) right now.

If you are looking for a role, then, generally speaking, there is opportunity.

If you are hiring, then it is tough. Candidates have lots of choice and often end up with multiple offers.

To help employers in this blog, I want to discuss why, in today’s market, cash (in  the context of a competitive base salary) is everything.

You see, employers could be forgiven for thinking that there were other factors, outside of salary at play if you are a person seeking a new role right now:

If you have a business located in a great area, out of a city, surely you can attract local talent?

If you offer flexibility, hybrid working, then that will appeal to those who have reflected and want this balance after enjoying more balance with lock downs?

Well, the harsh reality is that pretty much all workplaces offer hybrid and flexible working now, so that is no longer a differentiator. And, thanks to that flexibility, people are actually more open to a commute. Job seekers have widened their search areas geographically, as they only need to commute  to a location a few days a week. In the mind of the job seeker, locality is no longer a differentiator either.

Ah yes, but there are loads of people who are looking for roles, ‘thanks to the great resignation’? Well – sadly, there is not.

You see, ‘the great re think’ is prevalent, but people who are making significant changes to their work and life post pandemic, typically, are doing so because they can afford to financially. Yes there are people changing careers, retiring early and enjoying a less affluent life style, but that is actually sucking experienced people away from the professions we serve and it is leaving a gap.

So what pool is left to hire from, particularly after Brexit and the reduction in immigration?

The job seeker who is wanting (or needing) to move is today very mindful of  two things – salary improvement and career development.

The profile of this job seeker is that they are typically not in the situation where they can make drastic changes. They have commitments, but also, it is likely that they still harbour aspirations and dreams which have not yet been fulfilled. Indeed, the talented people who you would want to hire right now are pushing for more, both in terms of earning potential and career development.

To compound the problem, this population is very concerned about the cost of living crisis and it is having an impact on them. Their costs are going up and their standard of living going down; their focus on salary improvement is sharpened!

To further complicate the problem, motivated by all the talk of a candidate driven crisis, many are entering the market with extreme confidence and have the expectation of improving their earnings drastically.

So where does that leave the employer looking to hire? If they are serious and want to hire well, then they need to make sure that they are competitive with their salary offer. Trying to hire with a low market benchmark will just not work. Salaries that were benchmarked before the pandemic will be 10-20% off the mark today, that is just how it is. There is of course the other aspect of development and improvement to consider. Just as much as financial improvement should  be planned for and expected to be offered, the best way to  hire right now is to offer to someone who will be gaining a lot of development and career learning from your opportunity ….. more on that another day!