How long will the salary bubble last?

September 15, 2022
Business Growth

These are strange and uncertain times. But then change can often be unsettling. Of course, it also offers the opportunity for reset and renewal. A chance to do things differently.

But then change can also be misleading and sometimes illusory. Lots can change on the surface, while the daily undercurrents of life remain the same. This would appear to be the picture in the UK. A new monarch and a new prime minister within a week speaks to major upheaval. And yet the messaging from all fronts is about continuity.

The defining social and political feature right now remains economic uncertainty. Alongside record inflation (which may or may not be eased by the government's attempts to fix the energy market), the cost of borrowing is rising and salary expectations remain north of punchy.

For Helm members the latter issue is a particularly challenging issue. Helm is the UK's leading community for the founders of scale-up businesses with at least £1m turnover. Our members run growing businesses and to grow they need a supply of affordable and high-quality talent.

The issue for many at the moment is that there is a severe scarcity of talent, which is then pushing up its price. And our members are asking what they can and should do to find and retain the best staff. Most of all they want to know how long the current salary bubble will last.

So we asked. Respondents to a LinkedIn poll were at best ambiguous. We asked specifically whether the current round of large scale tech layoffs might help to prick the salary bubble.

Almost 60% of respondents are sceptical the bubble is bursting, but over a quarter are uncertain

Well over half of respondents were clear that there remains a shortage of talent and that this, above all else, will continue to keep salary demands (from new and existing staff) high. But what is more striking is that the same proportion - just over a fifth of respondents - who are already seeing, or are hopeful of a drop in wages just don't know what to expect. This 21% speak for many about the continuing uncertainty is all parts of the labour market.

The bottom line seems to be that wages will stay high for the foreseeable future. Members talk of £80k salaries for graduates with just one year's experience, while others talk about more experienced, but mediocre performers getting packages worth over £200k. It's enough to make any boss wince and enough - especially when combined with increased energy bills and higher interest rates - to blow a substantial hole in most budgets.

Helm members regular enjoy coming together for small intimate events with a group of fellow founders to discuss challenges and opportunities.


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