Defining the Market Rate

The most common question I am asked when dealing with construction recruitment is “what is the market rate for the role?”

The construction market has seen a boom in demand for skilled workers, particularly within the commercial/private property sector. Whilst this is great news for the economy, the amount of jobs available has resulted in workers receiving multiple offers when applying for new roles. This has created a ‘candidate driven market’.

In short, there are more jobs than there are skilled people able to fill them. As a result rates rise and, with multi-million pound projects to be completed, companies are left with no option but to meet the growing salary expectations of employees.

Let’s face it, people talk. As soon as someone is given a new role or pay rise, it doesn’t take long for their counterparts to find out. With lots of jobs available to them they can be quick to seek a pay increase, either with their current employer or with a new one.

It is completely understandable that most people want to earn as much as they possibly can, and earnings can definitely fluctuate depending on market changes. The danger however lies in the fact that the construction industry is seeing a situation where people are being paid above their skill level.

Striking the right balance is key to long-term success for companies and their construction workers.

There is definitely less of a focus right now from most candidates on benefits and career progression than I have previously seen. It appears construction workers are prioritising the traditional ‘one-two punch’ of location and money.

Those starting their construction career would benefit in the long-term from focusing on the benefits, not just the salary. Training, support, mentoring - these are essential in helping you forge a long and successful career. For more experienced workers the advice is much the same. Learn new skills and work on varied projects. Add as many new strings to your bow as possible.

When construction growth slows slightly (as predicted this year) and when PPI lowers (as it has from what was previously forecast) we will see an impact on jobs and hiring. Ensuring you have desirable skills that can be utilised by your employer is essential.

My advice to companies is simple. Work in partnership with your recruiters – whoever it is. Define a level or salary expectation for the people you are interviewing and move fast to secure the right candidates. It can take less than 24 hours for a candidate to secure another position with a firm who has put in a higher counter-offer.

Be open to receiving more flexible CVs – this will allow you to secure candidates at the correct rate. Establish a suitable job specification so that less time is wasted adjusting the spec and declining those who do not specifically meet it. Work closer with your agencies to provide the correct information and define the rates you are setting with them to ensure they are in line with the expected rates from day one.

Finally, don’t neglect referencing. I have seen a decline in this, but this is perhaps the most important tool in the current climate, as it allows you to determine if the candidate is actually worth the rate they are demanding, or whether they just carry inflated costs due to the current market.

If construction employment costs continue to rise then the importance of a sustainable industry will be highlighted. Those who have focused on the money rather than their personal development will find that as rates begin to level-out, so will their income as they experience their own personal skills short-fall.

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