Employers Hike Wages to Compensate for Talent Shortage

October 25, 2006 (PLANSPONSOR.com) - A fruitless effort to find talented workers has forced some employers to up the ante in terms of wages to fill positions, according to a recent survey.

The survey of 32,000 employers worldwide by Manpower, Inc., found that 25% say they have had to increase the salaries they are willing to offer permanent position professionals because they have had a hard time attracting talented workers.

According to the survey, the shortage in competent workers has hindered companies’ growth, with 29% of employers surveyed saying they would have hired more employees in the last six months if the talent were available. Thirty-eight percent of employers in the US reported that talent shortages are causing them to offer higher compensation, and nearly half of employers would have hired more permanent professional staff in the past six months if quality candidates were available.

Talent shortages in Asia Pacific have dealt the strongest blow to wage inflation, the survey said. Employers in Singapore(55%), New Zealand(40%), and Australia (38%) are seeing wage rise mostly due to competition for available professional talent.

According to the survey, employers in Peru (46%), Japan (45%), the US (45%), and Mexico (41%) are having the most difficulty finding qualified professional talent.

European employers reported being less strapped for qualified professionals, with less than a quarter saying they are having difficulty. Shortages of professional candidates were reported by only 12% of employers in France , 13% in the Netherlands and 15% in Belgium.