Seven in 10 employers have signalled salary increases for staff in the coming year, up from 65% this time last year, Excel Recruitment has found.

Some 71% of employers questioned for the recruiter's annual salary guide indicated salary increases for the year ahead, with Excel having seen pay rise up to 11% over the past 12 months.

Almost a third of workers surveyed (31%) are definitely considering changing jobs, and a further 29% are uncertain about staying with their employer. Just 40% of respondents said they were not considering moving in 2023.

Barry Whelan, CEO of Excel Recruitment, said 'the Great Resignation' had massively affected employers, and especially when asking workers to return to the workplace.

"It led to companies increasingly having open positions, which caused disruptions in their daily operations," Whelan said.

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"The remaining employees needed to compensate for the lack of manpower leading to immense workloads and also driving employee burnout which affected their overall performance and productivity.

"As well as driving up wages, high employee expectations are forcing more employers to offer a hybrid working option. The desire for remote work and the ease of applying for new roles in a remote setting will continue to drive churn in the labour market."

Workers in professional services, commercial, accounting and finance saw the largest pay increases in 2022 (6-11%), while retail experienced pay growth of 3-8%.

Wage growth in the industrial sector, such as forklift drivers and heavy goods vehicle (HGV) drivers, was 3-5%, with Whelan crediting staff shortages and increased employee expectations for the surge in salaries.

"Towards the latter part of this year, we saw staff shortages and increased employee expectations forcing employers to loosen their purse strings – with starting salaries shooting up by an extra €5,000 in certain sectors," said Whelan.

"Going into 2022, marketing executive salaries started at €30,000 but now we rarely place a candidate for less than €35,000. The salaries of sales business developers typically started at €35,000 but now it’s closer to €40,000.

"The sales and marketing jobs we are seeing the most demand for are marketing managers and e-commerce managers – where average salary bands are now between €55,000 and €70,000 – and most candidates are having up to five interviews.

"Therefore, it is imperative that employers go in with the best job offer to avoid getting into negotiations.”

Excel said the staffing situation in hospitality remains "quite dire" and that the pay increases being authorised to attract new hires and retain current staff are putting businesses under severe pressure.

"Rates of pay from entry-level commis chefs all the way to chef de partie have increased. The average chef de partie salary will soon reach approximately €40,000 per year to try to attract and retain talent," Whelan explained.

Salaries for junior office roles have risen significantly, from €23,000-25,000 pre-Covid to €26,000-28,000 now, and there has also been strong growth in the grocery retail sector, particularly among deli specialists, bakers and butchers who are in high demand.

Candidate shortages have affected the warehousing and industrial sector, with experienced fork-lift drivers being paid €14-16 per hour, compared to €12-13 per hour previously.

Whelan said there had been a shift in retail towards offering a more comprehensive compensation package, with a focus on work-life balance and working hours.

"Many big retailers have reduced their working hours from 48 or 45 weekly hours to 39, with 40 fast becoming the new industry norm," he said.

"Fashion retailers have also started to reduce working hours in a bid to retain and attract staff, with some even trialling and introducing a four-day flexible working week for their management and their colleagues”.

However, in the construction and engineering industries, salaries are expected to level off in 2023 due to an expected slowdown in inflation and less acute staff shortages in those sectors.

Salary is by far the most important thing to employees (60%), ahead of progression (21%), flexibility (7%), location (5%), feeling valued (4%), and benefits (3%), but just 29% said they would be willing to relocate for work. A further 35% were uncertain.

The survey of 1,800 workers found that 55% of workers expect a pay rise in 2023. Only a small fraction (15%) of workers don’t anticipate any pay increase at all, and 8% of job seekers said they had quit an in-person job to look for a work-from-home position.

"We have experienced the impact of the burgeoning job market throughout 2022 and the severe lack of candidates to meet these demands," Whelan said.

"As a result, we have seen a growth in candidates' power to influence their terms of employment, creating truly a ‘Candidates Market’. This trend will continue to become more granular as applicants' needs are addressed and employers add more bespoke benefits in 2023.

"Companies must adapt to today's new normal, and this includes modifying their workforce methods according to the needs of today's workers. It should incorporate a win-win situation between employers and their staff, as this will help attract candidates and retain them.

"Onboarding new staff along with hiring budget constraints will likely be one of the biggest and most critical challenges for companies in 2023."

(Pic: Getty Images)