Reading a piece in the Times newspaper recently, I was intrigued to see the following statement regarding workers who are switching roles in the current economic climate.
Workers who switch jobs are capitalising on a “disloyalty bonus” as their colleagues who stay put see little growth.
The statement was linked to a piece from The Resolution Foundation who have identified that workers moving into new roles in the past year have achieved an average increase of 11%, compared to the average of 2.5%.
The 11% moving figure is slated as being at its highest level since the early 2000’s whilst the 2.5% is still below the average 4% that the UK was seeing pre-crisis.
Based on the data collected for the 2018 Arras People Project Management Benchmark Report (2018 PMBR) which can be seen in the graph below; the general consensus was that remuneration growth would remain limited for both employees and contractors alike during 2018.
The average figures which are used so often to paint a picture of movements in remuneration, hide the reality of what has been happening to so many workers during the last decade where stagnation in remuneration has become the norm.
The PMBR has consistently reported high percentages of practitioners who have had unchanged remuneration or worse during the period since the financial crisis of 2007.
In the 2018 PMBR we also reported on the changes in base salary that were achieved by project management practitioners who changed their employer during 2017. As we can see in the graph below the figures show a significant difference to the picture painted above along with a significant difference between the public and private sectors.
In the private sector the bonus for changing employer was already significant with 64% achieving a rise of more than 6%, 36% achieving a rise of more than 10% and 10% achieving a rise of more than 20%.
We are starting to see, for some at least, what would normally be classified as good old supply and demand working its effects on remuneration as the availability of good labour tightens.
Competition is forcing some employers to offer a premium on salary (and possibly other elements of a package) in order to attract talented practitioners to join their workforce. Again, a normal scenario as the labour market becomes tight.
Some employers are offering this premium to new entrants only, whilst keeping their wage bills down for existing employees. They are playing a game, taking the risk that they will not see high attrition amongst their current workforce. Be that through inaction by their existing employees or a belief that there are still not enough open roles to facilitate any mass migration. Again, a normal scenario as the labour market becomes tight.>>Arras People: Latest Vacancies
At some point the pressure will mount and employers will have to dig a little deeper to satisfy their existing workforce, though many will wait it out for a tipping point to arise.
In the meantime, those practitioners with ambition, mobility, an in-demand skill-set will be able to increase their remuneration in a way that is generally impossible with an existing employer. A situation that has been seen since the concept of employment arose!
Disloyalty? It feels like a strong, headline grabbing word to me. This is surely just the market at play which is impacting a minority and as ever there will be winners and losers in this phase of the economic cycle.
For some, it could be turned on its head, with the disloyalty argument being thrown at employers who choose to take additional profit rather than increase the remuneration of their workers?