When cheap is too cheap

The larger talent pool available to employers has resulted in a trend for
reduced salary offerings and the need for jobseekers to be increasingly flexible
with their salary expectations.

Pay freezes over the past two or three years have left many people feeling as
though their career progression has been halted and those not in work have been
more willing to accept salaries below what they might have previously earned,
simply in order to secure work.

It is understandable that some employers are under the impression that this
provides them with an excellent opportunity to source strong candidates at
reasonable rates. While there might be some truth in this, it doesn’t always
bode well for the future, given that hiring talented candidates is only
beneficial if they remain within the business.

A new hire can turn out to be a very costly, and sometimes pointless,
exercise if it turns out that the candidate moves on again in several months’
time.

Unfortunately, there is a very real and imminent danger of this happening
while employers continue to offer non-competitive salaries.

In some of the larger companies, employers are offering accountancy
professionals salaries that will not entice people to move, and those people who
do move are more likely to do so with reluctance or because they feel they have
no choice.

What happens then is that there is often less enthusiasm for the new
appointment and this can transcend into a long-term lack of loyalty towards the
employer and the business. In order for employers to find and retain the most
talented candidates on the market, there needs to be some change in the way that
organisations attract talent.

Going on the understanding that people will be happy just to have a job is
not feasible for the future and there must be more forward thinking in the
market.

As soon as there is evidence of an upturn, there will be huge unrest in the
market if employees do not feel suitably engaged with employers or feel that
they are not gaining enough recognition for their work.

Unless comprehensive succession plans are in place, companies are unlikely to
be prepared for a loss of skills and people when the market moves on.
Some employers are looking at rewarding employees in ways other than salary, for
example through improved benefits packages, which will help with goodwill and
the perception of a strong employer brand.

However, for the majority of employers and professionals the waiting game
continues.

Roland Seddon is regional director at Hays Senior Finance.