The Salary SurgeLast word

Global talent shortages could result not only in vast amounts of unrealized revenue, but also in huge wage bill increases.

The Salary SurgeLast word

Global talent shortages could result not only in vast amounts of unrealized revenue, but also in huge wage bill increases.

Though the temptation to fill the gap through sourcing freelance or contingent workers makes sense where demand is temporary, it is not a sustainable approach to bridging what we believe is an endemic problem.

Freelance workers are more expensive and even more difficult to retain than permanent members of the team. The companies that thrive in this environment will be the ones that have built skilled-talent pipelines and long-term relationships with their people; these organizations will be able to withstand the demand surge that lies ahead.

Indeed, buying needed talent from the market will become too costly to remedy the situation alone. Companies will need to focus on retaining and reskilling existing workers instead. Organizations should resist the urge to make less-skilled workers redundant as lower-level roles are automated. Instead, they should take the opportunity to retrain these workers to fill more complex roles designed around the individual employees’ skills, keeping valuable business knowledge in-house and reducing the need to source expensive external talent. For companies that make the effort to upskill their existing workforces, there is an added bonus: Employees who are connected to an organization’s purpose and feel they can make a meaningful contribution are much more likely to stay, even if they’re offered a higher salary elsewhere.

After all, in the future of work, employees who are adaptable and willing to learn, with enough flexibility to handle a rapidly shifting working environment and less-hierarchical structures are the ones with the most potential to succeed. In sectors and economies where there’s a surplus of mid-skilled and low-skilled workers, there is ample opportunity for development.    

In parallel with retraining and reskilling, employers need to develop new, more effective remuneration solutions that reward loyalty, and consider creating bespoke packages for highly valued employees that look beyond pay to a holistic reward plan that takes into account non-salary benefits. As wages escalate, companies will need to be brave and creative to offset the Salary Surge.

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Understand the salary surge