Many professionals are set for pay increases of up to 25 per cent in the first quarter of 2022 as companies fight to hold on to their staff following the Covid-19 crisis, according to a new report.
Professional services firms are planning to increase their budget for pay rises by 10-15 per cent this year, which would be the largest increase seen since 2008, according to findings of a salary guide from the Robert Walters recruitment firm.
Whilst the biggest pay rises will be reserved for new starters, at least 5 per cent of the increase in payroll budgets will be reserved for existing employees in 2022. The pay rises are expected to be for workers across all seniority levels.
Almost half of companies (43 per cent) surveyed said they are planning salary increases for current employees to keep pace with higher pay they have awarded new hires. Over half (59 per cent) of workers said they are expecting a pay rise this year following a two-year freeze.
Furthermore, two-thirds said they will leave their job if they are not rewarded fairly, with 82 per cent feeling “very confident” about job opportunities in their sector this year.
In the past year wages for new starters grew by 6-8 per cent, and for those professionals who moved into “hero industries” such as technology or healthcare, saw pay hikes as high as 15-20 per cent.
Suzanne Feeney, country manager for Robert Walters Ireland, said: “Wage increases above market value for in-demand hires was a recurring theme of the past year. As a result we saw new starter salaries outstrip those of existing employees.
“The consequences of this will result in wage compression – where existing employees feel their additional experience at the company over new starters is no longer valued or has not grown in value over the past two years.
“Looking at the year ahead we will see more companies raise the pay of their existing employees to sit in line with new starter salaries.”
In addition, good work-life balance (65 per cent), excellent compensation and benefits (53 per cent), and job security (40 per cent) are the top three values of a post-pandemic professional.
Flexi-hours (29 per cent), remote working (22 per cent), and holiday entitlement (20 per cent) all rank much lower in importance for professionals.
More than a third of businesses (39 per cent) said they’re increasing pay to keep up with rising inflation.
“Many companies decided on their 2022 raises a few months ago before we had a clear picture of how much rising wages for new hires, as well as inflation, would impact the labour market,” said Ms Feeney.
“There is little point in companies offering a pay rise as a morale booster if the impact of that increase isn’t really felt in the real world – and so we are increasingly seeing more companies consider the cost of living when determining the average pay rise.
“Businesses will have to decide how much to raise their salaries to keep their employees, whilst also deciding how much to pass on those costs to their clients and consumers.”