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By Yannick Coulange, Managing Director, PageGroup Switzerland
Entering 2024, we face a strong demand for talent, but heightened economic and geopolitical risks have made businesses more cautious. In an environment where ambitious growth targets will be harder to achieve and cost constraints prevail, salaries are set to remain relatively static. While inflation is being felt by many employees, mass negotiations to cover cost of living increases appear unlikely. Employers will handle salary raises with an emphasis on performance. Now more than ever, transparency regarding salaries, bonuses, and career development opportunities is critical.
>> Current pay scales, sought-after profiles, industries that are hiring: find out how the job market will evolve in 2024 by sector in our latest salary guide
Strong Demand for Talent Amidst a Cautious Job Market
Talented, qualified candidates are receiving multiple offers. This is especially the case for experienced sales professionals, in demand technical experts and bankers with value added profiles and portfolios.
Nevertheless, employers and candidates have become increasingly risk averse. Many employers have increased recruitment requirements to include, for example, candidates undertaking extensive assessments and aptitude tests. This extends the recruitment process and many talented candidates – who know they are in demand – often do not proceed further. As a result, recruitment times have extended. Our latest research shows that 63% of active job seekers expect to find a new job within six months compared with 72% the last time the measure was taken in Q1 2021, just before Switzerland’s COVID-19 lockdown measures were lifted.
Talent Crunch for SMEs in a Risk-Averse Candidate Market
Our recent SME Recruitment report shows that this challenging recruitment environment is particularly pronounced in the SME sector where the majority (78%) face recruitment difficulties principally owing to a lack of specialist resources in the recruitment field as well as difficulties in meeting the salary expectations of applicants.
Transparency is Key to managing Successful Salary Expectations
It is crucial for employers to take the lead on salary discussions. Candidates tend not to discuss salary development processes as this is largely considered a taboo subject in the interview process. They will, however, talk about the company paying for healthcare and providing flexible working options. So, it is important for the employer to have a pro-active discussion about salaries, outlining how salaries are determined in the organisation. This includes the opportunities for career development and performance related increases.
Such conversations need to start before onboarding and continue throughout employees’ careers. In our experience, many employers lack a plan for holding regular salary discussions after the initial sign-on level has been agreed. This can result in misaligned expectations about salaries and career development. Planning for salary discussions is crucial as our latest Talent Trends 2023 research shows that loyalty to an employer has lost its lustre: 9 out of 10 people who started a new job within the last year are open to new opportunities.
Address the Elephant in the Room: Inflation
Our research and experience indicate that candidates and employees do not understand why many employers avoid addressing the issue of inflation. This is especially important as our latest Candidate Pulse Study shows that 54% of professionals in Switzerland have or are considering, a second job to keep up with inflation. The study also found that most candidates had not received salary increases to cover inflation, which has led them to look for new jobs or be open to new job offers. In addition, most candidates check social media platforms, such as LinkedIn, to look for a new job either every day or several times a day according to our latest Social Media study.
However, candidates also need to be prepared and transparent in their salary discussions. Potential employers know that they will not get key people cheaply with 2% unemployment. Candidates should tell potential employers and recruiters exactly what they earn, including their salary, bonus and other benefits. There’s no need for candidates to round up their current salary or pitch for a target number. They will win considerable trust by describing their current compensation package, clearly expressing their expectations as well as the reasons for them. This approach facilitates a healthy negotiation process.
The Michael Page Salary Guide 2024
To ensure employers, employees and candidates have the latest information about salary levels, we’re delighted to provide you with the Michael Page Salary Guide 2024. This guide covers over 550 job types across 15 key sectors and is based on almost 20,000 hiring interviews as well as our database of over 400,000 candidates. We wish you all the very best for 2024 and look forward to helping you achieve productive, fact-based salary outcomes.
>> Current pay scales, sought-after profiles, industries that are hiring: find out how the job market will evolve in 2024 by sector in our latest salary guide
Top Salaries for Top Executives
Despite talk of a potential recession, corporate growth targets remain high as does the focus on cost reductions. To achieve such targets most companies cannot settle for incremental improvement; they require performance transformations to get, and stay, on top. Therefore, executives who can successfully lead growth and transformations are in strong demand and command top salaries. They not only have the business acumen, but also the soft skills to deal with the human aspects of a successful organisation. They not only have the business acumen, but also the soft skills named the emotional intelligence (EI) to deal with the human aspects of a successful organisation. It is key to develop them but also to maintain strong talent with retention programs. This includes retaining top talent, developing mid-level management capabilities, enhancing productivity as well as developing a shared culture and values.
Top performers in charge of sales revenue are also in demand across all industries. But some industries pay more than others. Apart from CEOs and the C-Suite, the most well compensated executives will continue to be found in private and investment banking as well as private markets, especially in debt, equity and infrastructure. Top executives in the pharmaceutical industry are also well paid via salaries as well as equity participation arising from mergers and acquisitions or IPOs. Likewise, scale-up, rather than start-up companies, provide similar compensation and long-term incentive opportunities, but executives must be prepared to take the risk.
Moving into 2024, demand and salaries will remain high for such executives.
Stephan Surber, Senior Partner, Head of Page Executive Switzerland Global Head of Financial Services Practice.
To find out more about job market trends and salary ranges for 2024: access our latest salary guide.
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