Employee confidence in salaries and job security rises

Confidence levels on employee pay and job security are on the rise, with 60% feeling confident they will stay ahold of their role over the next six months, according to new research by Robert Half.

The poor economy and cost of living criss have been causing months of stress for employees and employers alike.

With a critical talent shortage affecting multiple industries, it’s a difficult time to be losing staff. As more employees cite increasing confidence in their pay and job security, it’s a potential win-win situation for both staff and businesses.

Confidence growing across key metrics

The Robert Half Jobs Confidence Index (JCI) is an economic confidence tracker created in partnership with the Centre for Economics and Business Research (Cebr). It explores four key pillars – job security confidence, pay confidence, job search and progression confidence, and macroeconomic crisis.

The pay confidence pillar made the biggest gains in its September 2023 report, climbing 70.1 points for Q2 to 33.5 – marking a return to positive territory for the first time since Q1 2022.

This has likely been driven by the return of growing real wages, which has also been reflected in improved consumer confidence.

Of the JCI’s four pillars, the strongest Q2 2023 reading was seen for job security confidence at 120.1 points – 60% of employees stated that they feel confident about their job looking ahead to the next six months.

The job search and progression confidence pillar declined marginally by 2.8 points in Q2. Overall, 41.9% of survey respondents said that they feel confident or very confident about their future career prospects and ability to progress in their career over the next five years.

In the technology sector, the average number of unfilled vacancies fell by 40.5% annually to 47,000, edging closer to the pre-pandemic 2019 average.

Challenges even without a recession

“In what was expected to be a period of economic contraction verging on recession, the UK has seen growth, with the economy expanding by 0.2% in Q2,” says Matt Weston, senior managing director UK & Ireland at Robert Half. “However, the country still faces systemic skills shortages, while worker confidence thrives as our data suggests.

“We are witnessing a perfect storm of unprecedented worker confidence in job security, pay and career progression that is placing significant pressure on the labour market. Employee mobility is high, as self-assured employees aware of low unemployment rates seek greater working environments or remuneration elsewhere. The affected businesses consequently need to deal with such talent loss in a tight market, fuelling the wage spiral we are seeing today.

“With nominal wage growth recently outpacing inflation, business leaders might be less willing to accommodate higher pay expectations going forward. However, the elevated worker confidence could mean many will not hesitate to jump ship should they feel their earning potential is not fully met.

“To address this, non-financial and bottom-line friendly retention strategies could aid the prevention of further wage inflation, while helping businesses avoid the cycle of having to attract new talent.”

The report says the outlook for the rest of 2023 remains underwhelming but more encouraging than previously projected – Cebr is currently forecasting a year-on-year expansion of 0.4%, upgraded from 0.2%.

In light of the economic pressures driven by the cost of living crisis and rising interest rates, Cebr expects the unemployment rate to rise slightly to 4.8% in the second half of the year.

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Kirstie Pickering - business journalist

Kirstie is a freelance journalist writing in the tech, startup and business spaces for publications including Sifted, TNW, UKTN, The Business Magazine and Maddyness UK. She also works closely with agencies such as CEW Communications to develop content for their startup and scaleup clients.