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Offering higher salaries to secure talent


A lack of skilled candidates is increasing companies’ costs by around £2.2 billion in higher salaries and recruitment charges, according to 'The £2.2 Billion cost of skills gap' report from the Open University. Companies are spending around £500+ million on higher salaries to tempt skilled workers, and £1.7 billion on temporary staff and recruitment fees to fill gaps, the report said.

The survey of 400 businesses found 90% had faced difficulties recruiting workers with the required skills in the last 12 months. The findings will add to concerns that UK employers are already struggling to fill key jobs even before the expected revisions in immigration policy once Britain leaves the EU.

The Open University researchers noted that unemployment was low, having earlier this year fallen to lowest level since 1975 and with employment rising to a new high of 31.85m. This was compounded with potential job seekers reluctant to move roles due to continued Brexit uncertainty and that a lack of clarity about future immigration rules was deterring some EU nationals from taking up roles in Britain.

As a result, the recruitment process was taking longer for three quarters of employers surveyed – an average of one month and 24 days which was far more than previously experienced.

The survey, conducted in April and May 2017, found 56% of businesses had to increase the salary on offer for a role ‘well above’ the previous market rate to hire the skills they required compared with the previous 12 months. The average increase was £4,150 per hire for small and medium-sized firms and £5,575 per hire for larger organisations.

Kristian Barnard, Redline Group’s R&D and Engineering Manager comments: “This data shows similar finding to other surveys such as the REC Report on Jobs in June which reported the sharpest drop in permanent candidate availability since August 2015 and starting salaries for permanent roles had increased for the sixty-first month in May.”

“We have witnessed an increase in salaries for many jobs in the engineering, r&d, manufacturing,  sales and marketing within the high technology sectors. In 2016-2017, Redline’s average permanent salary for engineering jobs increased by 2.0% and with an average increase of 1.9% in manufacturing jobs. Since Feb this year, the average salary for permanent engineering placements has already increased by 10.5%. This is positive news for talented workers with excellent skill sets in the engineering and technical sectors as they’re in high demand, and are now able to command a higher salary.” says Kristian.

Kristian continues: “With the ever-growing challenge to find skilled and talented candidates, businesses need to focus on their recruitment plans, development initiatives and engagements with specialist recruitment partners whilst rewarding their current employees. At Redline, we continue to have conversations with our clients to ensure the correct salary is being offered at the beginning of the recruitment process.  Redline’s regularly updated salary and contractor rate  survey helps us to provide accurate advice on the average salary and package being offered in the specific discipline for a range of engineering and technology jobs in locations across the UK and Europe. Businesses are now faced with a shrinking talent pool, exacerbated by the uncertainties of Brexit and it is more important that employers invest in developing their workforce. Our advice to clients is if you are unable to find the right candidates with the required skills, then they should hire candidates with less experience and provide training to bring those new employees’ skills up to the required level.”

“Training is becoming a winner in the war on talent. Organisations in the high technology sector need an agile workforce which can embrace change and meet new challenges. The cost of the skills gap to the UK economy shows it must become a business and government priority to build the skills and capabilities of each individual through investing in talent at all levels. Ultimately, organisations need to future-proof their businesses and enable lifelong learning.”

To find out more about engineering and R&D jobs, or to speak with our R&D and Engineering Division, please contact Kristian Barnard on 01582 878810 or email