Lawyers could be set for inflation-busting pay rises this year as firms desperately try to hold onto top talent. That was one of the key findings from recruitment consultancy Robert Walters, whose UK salary guide published today shows that professional services firms are planning to increase their budget for pay rises by 10-15% this year. That would be the largest increase seen since 2008 and more than twice the rate of inflation.
Chris Poole, managing director of Robert Walters UK, said the vaccine roll-out and easing of restrictions in 2021 had a positive effect on business confidence, and with that came the return of hiring.
‘Pent-up demand and renewed investment have meant that candidates are in the position of power – with the hottest talent able to command competitive pay increases,’ said Poole. ‘The candidate shortage will continue into 2022, and it is here where companies will need to work harder to convince professionals to join their team.’
While new hires have been wooed by firms with bumper salary offers, this has contrasted with existing employees whose wages have largely stagnated. That looks likely to change across all levels, from entry-level workers and temporary staff through to management and executive levels.
Almost half of companies surveyed say they are planning salary increases to keep pace with the rewards offered to new hires.
‘The consequences of this will result in ‘wage compression’ – where existing employees feel their additional experience at the company (over new starters) is no longer valued or has not grown in value over the past two years,’ added Poole.
‘Looking at the year ahead we will see more companies raise the pay of their existing employees to sit in line with new starter salaries.’
The research also found that compensation and benefits and a desirable bonus scheme are the top priorities for professional services workers, calling into question the assumption that remote and flexible working would be the most valued elements of work.
This perhaps owes much to people taking new ways of working as a given, with more than half of job seekers not bothering to ask about flexible working in a job interview because they assume it is automatically offered.
The salary survey was based on analysis of permanent and contract placements across sectors including legal, looking at 100,000 roles advertised in the UK over a 12-month period.