Almost half (42%) of London firms are planning to offer staff a flat rate salary increase in the next 12 months, according to new research by specialist recruitment firm Robert Half.
The company’s 2024 Salary Guide – which analyses and reports on market salaries, hiring trends, and skills requirements across the UK – also revealed that 28% of businesses in the capital intend to offer pay rises in line with inflation in the next year.
However, the report also indicated that there is a growing number of employers struggling to offer pay increases, with 19% stating they will not increase salaries more than they already have. A further 17% revealed that pay rises at the rate of inflation would put their business at risk.
Hiring on the cards
According to the data, recruitment activity is set to pick up in the capital next year, with 41% of respondents indicating that their business plans to expand headcount. However, 34% did indicate that their recruitment activity is at risk due to being unable to offer competitive salaries compared to other firms. It should also be noted that other factors such as a poor work-life balance are of concern, with 28% of businesses concerned that this will impact recruitment.
Philip Boden, Market Director, Technology & Financial Services, at Robert Half, commented:
“Skills shortages in the capital remain rife and employers are increasingly turning to financial incentives to attract and retain staff. However, pay inflation isn’t sustainable and firms need to consider how else they can boost hiring prospects and reduce attrition, including offering career development opportunities and maintaining flexible working options. With career progression another driver of candidates, it’s crucial that employers look at developing a broader recruitment package that is attractive beyond pay if planned headcount targets are to be met.”