Take that, inflation: starting salaries are at a record high

Anyone looking for a new job, take note: starting salaries are up. Unless you're a FTSE 100 chief exec, that is.

by Amber De Smet
Last Updated: 08 Jul 2014

Over the course of the downturn, one of the major indicators that Things Were Very Bad was how salaries compared with inflation – if inflation was higher than the average wage rise, that meant people were getting poorer in real terms. And although things have improved marginally, wage deals have remained unimpressive, even as the recovery began in earnest.

So here’s some good news (for those looking for a new job at least): according to the latest figures from the Recruitment and Employment Confederation (REC) and KPMG, permanent starting salaries rose in June at a record rate.
 
And that’s not all: employers are now offering wages to new hires at a level not seen since the annual survey began in 1997. The report also revealed starting salaries have risen for 26 months in a row, and haven’t been this high since November 2007. The reason for this sudden increase? A rocketing number of job vacancies.
 
‘Once again, employers seem ready to "splash the cash" in what appears to be a desperate attempt to lure skilled staff from competitors. Yet despite offering starting salaries at a rate that has not been seen during the survey’s 17 year lifetime, it is clear that candidates are not easily swayed,’ said Bernard Brown, Partner and Head of Business Services at KPMG.
 
FTSE 100 chief executives, on the other hand, are having a pretty torrid time when it comes to their salaries. According to pay consultancy MM&K and proxy advisory service Manifest’s latest report, top bosses’ pay packages have fallen for the second year in a row. While pay packages fell by 5% in 2012, they dropped by 7% last year.
 
Still, this news shouldn’t come as much of a surprise to anyone: the shareholder spring has caused remuneration committees to be far more cautious about senior managers’ pay deals. Investors’ rebellions have had the desired effect, it seems…

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