Press Releases

• Following EU referendum, 94% of companies expect their business activity to remain the same or increase in coming year 
• Referendum has sparked negativity among employees as three in five (62%) doubt progression opportunities, with consequences for staff retention
• Pay pressure on employers set to intensify as 1.8% salary rises falls below expectations
• Fluid job market now threatens growth of post-referendum economy

British businesses have retained a bullish economic outlook following the EU referendum, with nine out of ten (94%) organisations expecting business activity to either remain the same or increase in the coming year, according to the Hays UK Salary & Recruiting Trends 2017 guide.

The research, compiled by recruiter Hays, includes a survey of 17,000 employers and employees in the UK taken from before June’s referendum, as well as a snap poll of 2,200 employers and employees collected in September.

The guide found that while employers feel relatively reassured, this confidence is not shared by employees and the referendum has had a negative impact on employee sentiment. In the results gathered before June, half of all employees felt there was no scope for career progression with their current organisation. This rose to two-thirds (62%) following the June result.

With two out of every three (62%) employees intending to leave their jobs within the year and more than half (54%) of those citing pay or lack of progression opportunities as their reason for quitting, it is becoming clear that negative sentiment among staff and the resulting mass departures could threaten economic productivity as the UK heads towards an EU exit.

Confident businesses plan for long term

With confidence in the UK economy still high, many employers are now planning for the future. The jobs market remains buoyant, with almost three-quarters (73%) of organisations planning to recruit over the next 12 months.

More than half (51%) of British businesses aiming to recruit this year are looking to hire permanent staff instead of seeking a mix of both permanent and temporary candidates. This shift away from temporary employees represents a vote of confidence in the UK economy, as employers plan for the future and put in place the teams needed to meet any expected increase in business activity.

Employees seeking career progression

The report found that the high confidence of employers following the referendum is not shared by the majority of employees, signifying that the result is set to have consequences for staff retention for many UK businesses.

Prior to the referendum, half (51%) of employees said there was no scope for career progression within their organisation. Following the referendum this number rose to three in five (62%).

This lack of career development ranked as the main reason for staff intending to leave their employers this year, alongside pay. Two thirds (62%) of UK employees expect to leave their current job within the next 12 months and over a quarter (27%) of those intending to leave say they plan to do so due to a lack of future opportunities within their organisation.

Referendum sparks fears around access to talent

However, while the economic outlook remains optimistic, the referendum has increased concerns around the skills crisis facing UK organisations and whether businesses will have the talent required to adapt to the challenges ahead. 

In 2015, nearly a third (31%) of employers stated they did not have the talent required to meet business objectives. Immediately prior to the referendum this number had dropped to below a quarter (21%), yet this confidence was short-lived. By September, more than a third of organisations said they did not have the talent to achieve their business objectives, suggesting that the referendum has caused talent pipeline concerns for many organisations.

Currently, 77% of employers cite a shortage of suitable applicants as their key recruitment challenge, yet this is at odds with the view of employees. Nearly all (97%) candidates surveyed believe themselves to be sufficiently skilled to do their jobs.

Salary pressure intensifies

With the majority of employees expecting to depart, pressure will only increase on employers looking to hire and retain staff as they navigate through prolonged Brexit negotiations and look to build their teams to enable long term growth.

Professional salaries increased on average by just 1.8% in 2016, below the 2.3% increase experienced in 2015 and below the average 2.8% rise predicted by employers 12 months ago.

The construction and property sector experienced the biggest rise, with average salaries increasing by 2.8%. Across the UK, salary growth in the West Midlands, Wales and South West England outstripped proportional growth in London and the South East. 

Although 67% of employers expect to make further increases this year, just two in five (22%) plan to raise pay by more than 2.5%.

With more than half (55%) of employees dissatisfied with pay and over a quarter (27%) intending to quit this year because of it, employers are expected to come under intense pressure to raise pay beyond their expectations and provide clearer paths of progression in order to retain and attract the talent able to meet post-referendum business challenges.

Nigel Heap, Managing Director of Hays UK & Ireland, said:

“Five months on from the EU referendum it appears that UK businesses are reassured that the predicted immediate economic downturn will not materialise and while uncertainty remains, the majority actually expect their activity to increase in the coming year. However, this board-level confidence has not been adequately conveyed to staff, many of whom believe that the result has dented hopes for career progression and pay rises.”

“These doubts will result in an extremely fluid job market in the coming year, which is bad news for employers seeking stability and growth in the months ahead. With salary rises lower than forecasted last year, employers who do not offer competitive salaries and benefits may find themselves unable to retain and attract the talent needed to meet the demands of the surprisingly robust post-referendum economy.”

For further information visit hays.co.uk/salary-guide

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About Hays

Hays plc (the "Group") is a leading global professional recruiting group. The Group is the expert at recruiting qualified, professional and skilled people worldwide, being the market leader in the UK and Asia Pacific and one of the market leaders in Continental Europe and Latin America. The Group operates across the private and public sectors, dealing in permanent positions, contract roles and temporary assignments. As at 30 June 2016 the Group employed 9,214 staff operating from 252 offices in 33 countries across 20 specialisms. For the year ended 30 June 2016:

– the Group reported net fees of £810.3 million and operating profit (pre-exceptional items) of £181 million;
– the Group placed around 67,000 candidates into permanent jobs and around 220,000 people into temporary assignments;
– 22% of Group net fees were generated in Asia Pacific, 45% in Continental Europe & RoW (CERoW) and 33% in the United Kingdom & Ireland;
– the temporary placement business represented 58% of net fees and the permanent placement business represented 42% of net fees;
– Hays operates in the following countries: Australia, Austria, Belgium, Brazil, Canada, Colombia, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, UAE, the UK and the USA