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UK directors predict an increase in the creation of new permanent roles in the first half of the year and concerns about losing talented staff, according to the latest Robert Half Professional Hiring Index (the ‘Index’).
The recruitment firm says they will need to think about incentives other than financial ones, such as flexible working, to retain staff.
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According to the Index, nearly one in four directors say they plan to expand their operations by adding additional headcount and half plan to recruit staff to fill vacated positions when they arise.
Just 9% of directors said that they foresee a reduction in roles over the next six months: a significant drop on the 21% of directors predicting redundancies at the beginning of 2012.
The Index also shows almost two thirds of UK directors feel more confident in the country’s economic growth over the next year than they did last year, up five points from the same survey 12 months ago, while more than three quarters say that they are more confident in their own company’s prospects looking forward, also up five points.
As the job market changes gear, directors report growing fears about losing top performers, says Robert Half. A large majority (80%) say they are concerned about losing their best staff, compared to 72% of directors a year ago. An even higher proportion (88%) stated that they find it either very (27%) or somewhat (61%) challenging to find skilled professionals today.
However, both salaries and bonuses are likely to remain static for the next six months. Almost two thirds of directors said that salaries will be frozen until at least July, with less than a third saying that they will increase salaries and just 3% stating that they would decrease salaries.
Just 14% of UK directors said they expect bonuses to increase over the next six months, while 42% said they would remain static. Nearly a third said that no bonuses would be paid by their organisations. This rises to 49% for public sector organisations, but shrinks to 21% for private companies.
Phil Sheridan, Managing Director, Robert Half UK, said: “Our research shows some notable trends in the UK employment marketplace. There are genuine signs of increased optimism, with lower predictions on redundancies and higher predictions on new roles. Yet while company executives are even more concerned about finding and retaining the best people than they were a year ago, the majority of companies are as yet unable to adjust remuneration on a widespread scale, including salaries and bonuses.
“We believe that companies need to find new incentives to attract and keep the best people while the economy continues to recover, and these may include more flexible working arrangements, extra holiday and greater responsibilities and challenges within roles. 2013 may also be the year when directors are forced to look at awarding pay rises and bonuses to selected people in order to retain them.”