When the world went into lockdown during the pandemic and government spending went through the roof, many economists rightly predicted that high inflation would follow. However, couple this with the clamour for talent that ensued as businesses re-opened, the resultant impact has created huge challenges in recruitment that show little sign of easing.

Rapid inflation, stagnating real wages and a stubbornly competitive labour market has placed the salary expectations of candidates on a collision course with businesses still reeling from the financial impact of Covid. Inevitably, a disparity between candidate expectations and employers’ capability has arisen, with a by-product being that compensation now ranks as the No.1 priority for candidates globally. Clearly, something has got to give!

With inflated salaries being necessary to attract talent, many businesses who are more than aware of the market challenges, have been reacting to the threat of losing employees with even higher counteroffers to retain their staff, rather than being forced into the volatile job space to try and find a replacement. This has merely exacerbated the issues of salary inflation.

To counter this, the feedback loop between recruiting, finance, and DEI on discussions of salary expectations needs to be more agile than ever — particularly at a time when pay transparency is on the rise. As those with the clearest view of candidate priorities and real-time labour market dynamics, harbouring a close working relationship with recruitment consultants can more than bridge the fee gap that exists with their lower-cost agency counterparts.

In a nutshell, it has never been more prevalent that investing in your recruitment partner will pay a dividend far greater than simply throwing money at salary rises.

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