Salary expectations a ‘pressure cooker’ in 2012

by 14 Feb 2012

HR is the meat in the sandwich as the C-suite increases pressure to improve the quality of new recruits whilst keeping a lid on salary expenses, according to the findings of a new report.

The Salary and Employment Insights 2012 report from Hudson revealed that salary expectations are widely out of sync between employers and employees. “Employers are under pressure to simultaneously improve the quality of their hires and control the cost of these hires – they need valuable employees to take the business forward, but not at any cost,” Mark Steyn, CEO Hudson Asia Pacific said.

Nearly seven out of 10 employees are considering moving jobs in 2012, while two-thirds of employers say they are worried about losing their existing high performers.

Almost half of hiring managers reported the salary expectations of preferred candidates exceeded their budget in 2011. It was found:

  • 43% increased their budget to secure the best candidate
  • 57% settled for their second-choice
  • Nearly six out of 10 employees felt that they deserve a pay rise in 2012

Steyn said salaries are on the rise for many mid to senior hires and the dilemma for business is being caught between global economic uncertainties and not wanting to compromise on investing in their people. Alongside this dilemma, employers face the problem of meeting the “heightened salary expectations” of employees, Steyn added.

According to the report, recruitment strategies must be fine-tuned to find and retain the high performers who can make the biggest difference to the bottom line. It was found:

  • Organisations need to identify high achievers and broaden their approach from traditional methods of selecting new hires that focus on technical qualifications and experience.
  • Extend pre-employment screening to include an assessment of candidates’ motivational and behavioural attributes, which have been shown to be more accurate indicators of performance.
  • Currently just 32% of companies assess candidates’ behavioural, personality and intelligence attributes, while only 6% use assessments that test for cultural fit.
  • Current approaches have been costly for a number of employers who have reported that 44% of employees were described as not meeting expectations in 2011.
  • A cost-driven approach and corner-cutting has led to mistakes, and about a third of organisations said that in hindsight they would have done more to assess candidates’ abilities to ensure the value of their investment was realised.

The skills shortage is intensifying competition for the most talented candidates but Steyn added the findings provide an opportunity for smart employers to think beyond just the salary and offer attractive, tailored remuneration packages to individual employees. “Salary is important, but it’s not everything. Sometimes overpaying can be as risky as underpaying – no organisation wants to be represented by employees who are driven solely by salary.”


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