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Digital talent recruitment expert warns employers to plan for 'salary bidding wars'

Contributor:
Fuseworks Media
Fuseworks Media

A digital talent recruitment expert is warning New Zealand employers to start planning without delay for in-demand employees being able to trade salary offers off against each other as skill shortages deepen.

Campfire Digital Recruitment Director Amelia Cranfield says she has noticed a significant spike in sky-high salary counter offers.

"Digital is a very dynamic recruitment market at present, with huge demand for mid-level people who have hands-on experience implementing campaigns. This has resulted in remarkable counter-offers being made in salary bidding wars for in-demand candidates," she says.

Cranfield has seen examples such as an employee on a $57,000 salary going to resign and being offered a $95,000 salary as an incentive to stay. Another person’s salary increased from $100,000 to $150,000 to keep them on.

Several factors have contributed to the current situation, including increased demand as more businesses move their offering and promotional mechanisms online. Furthermore, a change in the mix and salary expectations of new immigrants versus returning New Zealanders used to high-paid overseas jobs has also contributed to higher salaries.

"There’s a major salary market correction happening in the digital job world and it’s not likely to be going away any time soon."

Cranfield says many agencies and other employers work on thin margins, so an unanticipated salary hit can be devastating. That’s why it is important to be pro-active in addressing the salary threat.

"I can’t stress strongly enough how important it is for businesses to start putting steps in place to protect themselves against potential negative consequences of rapidly escalating salaries in the digital job sector."

Seven top tips for businesses seeking to protect themselves against salary market corrections

Front-foot the situation by identifying the employees you most want to retain in the short-medium term.

Meet with them to discuss their employment needs, and their likely intentions over the coming year to 18 months. And don’t delay; do this by Christmas.

Identify which employees you are likely to lose and be pragmatic about that, but lock in the ones you can’t afford to lose.

Put contingency plans in place for those who you anticipate will need to be given a significant salary increase, including developing a salary strategy.

Have up-to-date job descriptions for all roles, which clearly articulate not only the role but how working at your organisation will benefit the employee

While pay is important to employees, so are ‘soft’ benefits such as flexible working hours and pleasant working conditions, so be sure to factor this into your planning.

Develop - and communicate - career development pathways for all roles.

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