Salaries rise as skills shortage worsens

TWO out of five small businesses recruiting new managers last year had problems hiring people, with three-quarters of these citing lack of specialised skills as the reason.

These are some of the findings revealed by new research published by the Institute of management (IM) and Remuneration Economics. Entitled “The Smaller Business Review” and based on the responses of 125 companies, the survey found that during 2000 over 74 per cent of businesses reported that they had engaged in a campaign to hire new senior staff. However, 40 per cent of the respondents experienced problems recruiting, a marked increase in comparison to the 1999 figures, which showed only 27 per cent encountering difficulties finding the right people.

Other findings of the survey included the finding that directors in the small business sector received, on average, an earnings boost of 7.1 per cent, with managers’ earnings boosted by 6.5 per cent, compared to 4.8 per cent in the previous twelve months. This suggests that smaller businesses are having to pay more to recruit and retain managers who do have the right skills.

Significantly, managers in the traditionally highly-paid hi-tech sector are well down the list in terms of earnings increases, with reflects the dot.com crisis and the general downturn in the IT sector. However, executives who did best over the past year were in personnel/Human Resources, with managers receiving a rise of 11.3 per cent in overall earnings – contrasting vividly with their actual salary rise of 6.5 per cent, suggesting that their take-home pay has been substantially increased by bonuses. (CL)