Salaries Are Projected To Surge Due To Global Talent Shortages

Salaries Are Projected To Surge Due To Global Talent Shortages

Compensation for highly skilled workers could rise sharply in response to global talent shortages, which could jeopardize the profitability of companies and threaten their business models, a new study conducted by executive recruitment firm Korn Ferry has warned.

The study, released on June 20, examined the impact of the global talent shortage on payrolls in 20 major global economies at three milestones: 2020, 2025, and 2030; and across three sectors: financial and business services; technology, media, and telecommunications (TMT); and manufacturing. The aim of the study was to measure how much more employers might be forced to pay workers above normal inflation increases.

The results of the analysis showed that if salaries continue to increase at their current rate, $2.5 trillion could be added to annual payrolls globally by 2030. Broken down by sector, the study found that financial and business services face a potential wage increase of more than $440 billion by 2030; or more than double the wage premium of the other sectors examined. The findings also indicated, however, that the wage premium for TMT could almost triple within the next decade, jumping from more than $59 billion in 2020 to $160 billion by 2030; while manufacturing could face additional salary increases of more than $197 billion by 2030.

The study also found that surging salaries will have a huge impact at the country level, with U.S. and Japanese companies seeing the largest increases: according to the analysis, the U.S. is projected to face a wage premium of more than $531 billion by 2030, while Japan is on course to pay an additional $468 billion in compensation by 2030.

The results further showed that the average pay premium (i.e., the amount employers have to pay above the amount salaries would have risen over time due to normal inflation) per highly skilled worker by 2030 across the 20 economies studied is $11,164 per year. The countries projected to face the largest wage premiums per year per highly skilled worker by 2030 are Hong Kong ($40,539), Singapore ($29,065), and Australia ($28,625).

Researchers observed that smaller markets with limited workforces are likely to feel the most pressure: for example, Singapore and Hong Kong are projected to experience salary premiums equivalent to more than 10% of their 2017 gross domestic product (GDP) by 2030. The analysis also found that while the UK and France have a better short-term outlook, by 2030 the UK’s wage premium could be equivalent to 5% of its 2017 GDP, and France’s could be equal to 4% of its 2017 GDP.

Turning to the largest Asian countries, the study estimated that by 2030, China may see an additional salary increase of more than $342 billion. Researchers noted that India is the only economy in the study expected to avoid a surge in wages because, unlike the other countries in the sample, India is projected to have a surplus of highly skilled talent at each milestone.

From Benefit Trends Newsletter, Volume 61, Issue 8

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2018 Liberty Publishing, Inc. All rights reserved.

Employees Want Managers Who Are Approachable and Transparent

Employees Want Managers Who Are Approachable and Transparent

The quality of the manager-employee relationship has a large impact on job satisfaction and retention, with employees saying they place considerable value on working with managers who are approachable, transparent, and honest, according to the findings of a survey conducted by human capital management solutions provider Ultimate Software.

The results of the survey of more than 2,000 U.S. employees and managers, which were released on December 4, 2017, revealed that there are complex differences in perception and experience between managers and the people they manage. Of the employees surveyed, 93% said that trust in their direct boss is essential to staying satisfied at work, and more than half indicated that if they aren’t satisfied at work, they can’t put forth their best effort.

The findings further suggested that a good manager-employee relationship can play a significant role in retention, with more than half of the employees saying they would turn down a 10% pay increase to stay with a great boss. However, while the survey found that 75% of the employees consider approachability to be the most important quality in an effective manager today, only half of these respondents said they have an approachable manager.

The survey also looked at how well managers and employees communicate. The results showed that whereas 80% of the managers think they are transparent with their direct reports, only 55% of the employees agree that their managers are transparent. While the bulk of the employees polled said they feel comfortable communicating, 57% of the managers surveyed indicated they wish their reports would be more open about what is on their minds.

In addition, the results showed that of the managers surveyed, less than half reported having a mentor who gives them guidance on how to be a better leader, and 45% said they have never received formal management training. But despite this lack of training, the managers expressed confidence in their skills: only 16% acknowledged that they frequently make mistakes, and less than one-third admitted that they do not know what to do in personnel situations. Whereas 71% of the managers surveyed said they believe they know how to motivate their team, only 44% of the employees agreed that their manager knows how to motivate them.

Finally, researchers warned of a possible end of “the manager” as we know it: 80% of the employees surveyed indicated that they think they could do their job without managers, and deem them unnecessary.

From Benefit Trends Newsletter, Volume 61, Issue 2

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2018 Liberty Publishing, Inc. All rights reserved.

Job Candidates Avoid Negotiating Pay with Prospective Employers

Job Candidates Avoid Negotiating Pay with Prospective Employers

A majority of workers report that they do not attempt to negotiate their compensation when applying for a job, even though more than half of employers claim they are expecting candidates to make a counteroffer, according to the results of two surveys recently conducted by the online recruiter CareerBuilder.

The results of a survey of 2,257 hiring and human resource managers conducted August 16-September 15, 2017, and of a second survey of 2,369 full-time employers and 3,462 full-time U.S. workers conducted May 24-June 16, 2017, showed that 56% of workers report that they do not negotiate for better pay when they are offered a job. When the respondents who indicated they avoid negotiating were asked why, 51% said they do not feel comfortable asking for more money, 47% said they are afraid the employer will decide not to hire them, and 36% said they do not want to appear greedy.

By contrast, 53% of the employers surveyed indicated they are willing to negotiate compensation on an initial job offer for an entry-level worker; and 52% reported that when they first extend a job offer to an employee, they typically name a lower figure than they are willing to pay to leave room to negotiate. When asked to estimate how much lower their initial offer tends to be relative to the amount they are ultimately willing to offer, 26% of employers said their initial offer can be more than $5,000 less than their final offer.

The survey results also revealed some of the characteristics of the workers who are more or less likely to negotiate: workers aged 35 and older (45%) were slightly more likely than workers aged 18-34 (42%) to say they negotiate the first salary offer, and a higher share of men (47%) than of women (42%) reported that they negotiate pay when offered a job. Broken down by industry, the results showed that information technology workers (59%) were the most likely to say they negotiate salary, followed by workers in sales (55%), financial services (53%), and healthcare (48%).

When asked what motivates them to do their job, 71% of the workers surveyed said the ability to provide for themselves and their families, followed by money (63%), the ability to make a difference (38%), and the ability to create something meaningful or cool (21%).

The findings further showed that even though money is a top priority for workers, 79% of the workers surveyed said they do not earn their desired salary, with 36% reporting they do not earn anywhere near their desired level, and 58% saying they do not think they are better off financially than their parents. Moreover, while only 8% of respondents reported that they currently earn $100,000 or more, 21% said they feel they need to earn $100,000 or more in order to be successful.

Researchers also emphasized that workers who lack the courage to ask for a raise might be leaving money on the table. While 63% of the employers surveyed said they feel they have to pay workers more because the market is getting more competitive for talent, 51% of the workers polled admitted they have not asked for a raise.

From Benefit Trends Newsletter, Volume 60, Issue 12

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2017 Liberty Publishing, Inc. All rights reserved.

Employers Express Concerns About Skills Gaps and Work Visa Shortages

Employers Express Concerns About Skills Gaps and Work Visa Shortages

The skills shortage is the most pressing recruiting concern employers face, especially as many talent acquisition leaders are becoming increasingly worried that a shortage of work visas will make recruitment more challenging than in the past, a report released by talent acquisition technology provider Talent Tech Labs has warned.

The report’s findings, which are based on a survey of 189 senior HR and talent acquisition professionals, was conducted April 11-May 5, 2017. The results indicated that 69% of all respondents—and 80% of those professionals who fill more than 2,500 roles per year—report that their greatest recruiting concern is the skills shortage.

Reflecting on the current political landscape in the U.S., 80% of the professionals surveyed voiced concerns that a shortage of work visas could make talent acquisition more difficult, while 63% said they are worried that political rhetoric could add to their talent acquisition challenges.

According to researchers, these challenges have led many talent acquisition leaders to reconsider their HR strategies. The findings showed, for example, that the utilization of the independent workforce continues to rise, with 79% of the talent acquisition leaders surveyed saying they expect that their role in securing non-employee talent—which has historically been filled by corporate procurement—will increase over the next 1-2 years.

The report also observed that the widening skills gap and the increased reliance on contract workers is driving demand for technology investment to address these market shifts, with the largest share of survey respondents identifying candidate sourcing technology as the area of talent acquisition most likely to undergo rapid investment and development. When asked about the barriers to implementing new technology solutions, 58% said a lack of budget is the biggest hurdle, while 51% cited the need to develop a business case and explain the return on investment.

In addition, the survey found that the most widely used talent acquisition tools are applicant tracking systems (88%), followed by tools related to job advertising (66%), social networks and search (61%), assessment (55%), and employer branding (53%). When asked which technology tools introduced in the last two years they believe offer the most innovative solutions to recruitment challenges, the largest share of respondents (33%) chose employer branding tools, followed by mobile recruitment (27%) and analytics platforms (17%), By contrast, much smaller shares cited very new and relatively untested technologies like chat bots and artificial intelligence tools (11%).

From Benefit Trends Newsletter, Volume 60, Issue 9

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2017 Liberty Publishing, Inc. All rights reserved.

Employers Plan to Hire Full-Time Workers in the Second Half of 2017

Employers Plan to Hire Full-Time Workers in the Second Half of 2017

In the last six months of 2017, a majority of U.S. employers anticipate hiring full-time, permanent workers, with more than half saying they expect to offer higher starting salaries to new employees, according to a 2017 midyear job forecast released by recruitment website CareerBuilder.

The report’s findings are based on national surveys conducted May 24-June 16, which included representative samples of 2,369 hiring managers and human resource managers and 3,642 full-time U.S. workers. The survey found that in the second half of 2017, 60% of employers plan to hire full-time, permanent workers, up from 50% in the same period last year; 36% of employers plan to hire part-time, permanent employees, up from 29% in the same period of 2016; and 46% of employers plan to hire temporary or contract workers, up from 32% in the same period last year.

A majority (53%) of the employers polled said they intend to offer more generous starting pay to new employees in the last six months of 2017, up from 39% in the same period last year. The results further indicated that 32% of employers plan to increase starting salaries on job offers by 5% or more. In addition, 66% of the employers surveyed said they expect to increase compensation for current employees before year end, with 34% saying they anticipate an increase of 5% or more.

A subset of respondents in the employer sample were asked about their motivations for offering higher pay. The findings showed that 72% of the employers feel they have to start paying higher wages because the market for talent has become increasingly competitive, with the majority saying this pressure applies to entry-level as well as experienced workers. While 17% of these respondents said they have to pay more only if the entry-level worker has a college degree, 24% said they have to pay more even if the entry-level worker has no college or training.

The study also looked at which industries are most likely to add to their full-time, permanent headcount in the second half of 2017. The results indicated that 72% of employers in information technology, 66% of employers in manufacturing, 64% of employers in health care, and 62% of employers in financial services intend to recruit additional full-time staff in the last six months of the year.

Moreover, the study found that across industries, the types of roles employers are most likely to recruit for in the second half of 2017 are those tied to skilled trades (15%), software as a service (14%), cybersecurity (13%), sales enablement (13%), talent management (13%), providing a good user experience (12%), managing and interpreting big data (11%), creating digital strategies (11%), social marketing (10%), e-commerce (10%), developing apps (10%), and healthy living (9%).

Looking at hiring patterns across geographic regions, the study observed that all regions are showing a year-over-year gain in the percentage of employers expecting to hire full-time, permanent employees in the last six months of 2017. Hiring activity was found to be strongest in the West, where 67% of employers said they are planning to add workers; followed by in the South, where 61% of employers reported plans to hire more workers.

From Benefit Trends Newsletter, Volume 60, Issue 8

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2017 Liberty Publishing, Inc. All rights reserved.

College Graduates Want a Job with  Good Pay and a Collaborative Environment

College Graduates Want a Job with Good Pay and a Collaborative Environment

A majority of college graduates entering the job market this summer want to work in a collaborative rather than a competitive workplace, but care most about compensation when applying for jobs after graduation, according to a report released by student loan marketplace LendEDU.

The report’s findings are based on a series of surveys of between 1,808 and 3,776 college students conducted nationwide from July 8, 2016, to June 5, 2017. When asked what type of company culture they prefer, 62% of the respondents said they would rather work in a collaborative environment, while the remaining 38% said they would prefer to work in a competitive atmosphere. Men were more likely than women to say they prefer a competitive environment: 43% of the male respondents, but just 34% of the female respondents, said they would rather work in a competitive than in a collaborative workplace.

Moreover, when asked whether they would rather work for a company with excellent benefits/perks but less job security, or fewer benefits/perks but more job security, 52% of respondents chose the latter option, while the remaining 48% said they would prefer to be employed at a company with more job security and fewer perks. Broken down by gender, 58% of the male respondents, but only 46% of the female respondents, chose benefits/perks over greater job security.

Students were also asked whether they would rather work for a very small startup or a larger, more established company. More than two-thirds (69%) of respondents said they would prefer to work for a larger company than a small startup, with a larger share of the male respondents (35%) than of the female respondents (28%) saying they would rather work for a small startup.

In addition, the college students were asked which aspect of a company they consider most important when deciding where to apply. Not surprisingly, the overwhelming majority of respondents (72%) said whether the employer offers good pay is the most important factor, with much smaller shares saying their main concern is whether the employer has a strong ethical culture (14%) or a good training program (8%).

When asked how much money they expect to make at their first job after college, 36% of respondents said they expect to earn $40k to $60k per year, 26% said they expect to make under $40k annually, 21% said they anticipate earning $60k to $80k per year, while 17% indicated they expect to make over $80k annually.

From Benefit Trends Newsletter, Volume 60, Issue 6

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2017 Liberty Publishing, Inc. All rights reserved.