In early January, the recruitment firm Carrington West released its 2023 Rail Salary Survey Guide, giving a snapshot of rail workers’ potential earnings and providing an overview of the current recruitment market. The report gave a glimpse into the impact of recent global events on the rail industry and how firms were responding. RailStaff spoke to Oliver Gooch, department manager of Carrington West’s rail team, for a deeper look into the issues and some predictions for the year ahead.
The job market over the past year has been ‘vacancy rich’, says Carrington West’s report and, with disruption brought by Brexit and the Covid pandemic now a little further behind us, a clearer picture for recruitment and working trends is emerging.
The report highlights a disconnect between employers who want their teams back in the office, and candidates who have tasted the benefits of flexible and remote working. And with the current cost-of-living crisis, candidates are chasing higher salaries for their labour.
In design, consulting, and engineering recruitment, 2022 saw a steady demand for staff driven by major projects such as HS2, the awarding of TFL frameworks, and the ongoing projects of CP6. Skilled workers were particularly drawn to HS2, along with design talent.
On the project delivery side, last year saw a shortage of candidates, meaning the demand for professionals to work on major projects was not met. This was exacerbated by employers regularly counteroffering employees looking to move.
Supply and demand
Overall, the recruitment environment is a good one for candidates, says Oliver. “The market is very positive at present. We’re seeing a really busy end to CP6 and with the start of CP7 we should see works continue, unlike the usual ‘feast and famine’ that we see in rail. On top of that we’ve got some major projects taking in all the skilled workers.”
However, Oliver points out that the impact of Brexit continues to make things difficult for employers looking to fill vacancies. “Brexit is having a huge impact,” he says. “We can no longer rely on the pool of European skilled workers, so we’re very reliant on the candidates we have in the UK, especially when it comes to design. With recruitment consultancies unable to tap traditional sources of workers, and with major projects ongoing, there is a huge shortage of employees of all sorts.”
Additionally, although the Covid pandemic is no longer the spectre it once was, it has definitely had an impact, with job seekers increasingly requesting hybrid working while employers seem eager to return to the office. “Remote working seemed to work, especially for the candidates who enjoyed it,” Oliver says. “But employers found they still needed staff in the office, particularly junior staff who they need to train and engage with more. We’re not really seeing many clients going back to a full five days in the office, but we’re seeing more and more hybrid working.”
The industry has also yet to see what the ‘new normal’ will look in terms of passenger numbers, which will obviously affect what revenue there is for funding works.
As if the past few years have not been eventful enough, the UK now finds itself deep into a cost-of-living crisis – itself the result of recent domestic and global turbulence. Financial uncertainty and the prospect of recession is leading many to favour job stability over change. That said, the rapid inflation of the past 12 months has seen salary expectations jump and those leaving their employers have been asking for significant pay increases. Requests for salary increases of £10,000 are not uncommon among those currently seeking new roles as individuals looked to shield their families, homes, and financial obligations from the current economic environment.
However, there are limits on what companies can pay, especially those looking for permanent staff, says Oliver. “If a candidate requests a £10,000 pound increase, it’s not necessarily within the company’s budget. Because of that, we are seeing a lot of people wanting to go on contract as it can offer more money.” Indeed, Carrington West’s report highlights the discrepancies between the salaries paid by main contractors and those paid by consultancies, which have made managing candidate pay expectations difficult.
The whole package
That said, some companies are beginning to raise salaries to attract permanent employees and counteroffers have also become a major theme. Companies generally know their employees value, and if an employee is offered a role elsewhere, their current employer will generally come back with a similar offer, Oliver says.
Candidates are therefore encouraged to look at the overall package that a prospective employer can offer along with the salary on offer, whether that’s job location, flexible working, progression, or pension contributions. Overall, candidates simply looking for a pay increase may end up better off staying where they are, once all benefits are taken into account. Plus there is always the distinct possibility that employers will offer a salary raise further down the line.
For candidate’s looking for work, the opportunities are definitely there. Candidates now have a greater choice about where they work, with improved prospects for higher salaries. “Despite all of the external pressures, today’s recruitment market is a vastly different landscape to that seen in years past,” says Oliver.
“A few years ago, between CP5 and between CP6, we saw a huge number of people leave the industry. Now, it’s a busier market and rail workers have much more value.” says Oliver. “Additionally, major projects such as HS2 are bringing more people into rail. On top of this, the HS2 rail systems haven’t been tendered yet, and when that happens, those engineers and delivery staff will not be short of work for quite some time.
While workers are expected to stay loyal to the industry, the sheer scope of today’s projects will continue to drive competition for their skills. Staff retention will be a major challenge for employers and they’ll need to think about how they engage their staff, how happy their staff are, and what benefits they can offer to prevent competitors poaching employees with financial incentives.
Employers will also need to consider where they draw their candidates from, says Oliver. “They are going to have to start broadening their net for candidates, bringing in people from highways, for example, and training them to work on rail. There will also be a higher demand for contract workers.” In an ideal world, most companies would prefer permanent staff because they can retain their skills. Ultimately, however, they have a project to deliver and after a prolonged period of searching for permanent employees, the choice is to either recruit contract staff or fail to deliver the project.
Overall, the picture for the industry is a positive one, says Oliver. “With the number of projects going on now, or about to start in the next few years, we’re really looking at a golden era for rail. I’m very excited for rail at the moment. The market is the busiest I’ve seen it for five years and I don’t see that changing as it currently stands.”
Image credit: Carrington West