Demand for science, technology, engineering and mathematics (STEM) expertise is rising dramatically as the need for everything from artificial intelligence to drug manufacture and green energy increases. With companies vying for the best talent and STEM skills in short supply, salaries are inevitably rising.
In our How the STEM World Works research, we gathered insights from 5,000 STEM specialists across the US, UK, Germany, the Netherlands, and Japan. The overall picture was one of assertiveness in which candidates know they are in demand. Salary and benefits are their top consideration when searching for a new role with 60% saying it was a key priority for them.
STEM professionals can afford to play hardball at the negotiating table as skills shortages bite. According to the UK Commission for Employment Skills, 43% of STEM vacancies are hard to fill, mainly because of a shortage of applicants with the required skills. And according to The Telegraph, the root of this growing skills gap is education. Only 15,000 UK students sat a computing or ICT A-Level exam this summer, accounting for less than 2% of all the exams sat.
Competition between industries is heating up
Germany is also suffering from a severe STEM talent shortage. A recent article published on the website of the Federal Ministry for Economic Affairs and Climate Action said: “Although Germany does not have a nation-wide skills shortage at present, it is already impossible to fill vacancies in certain regions and sectors with suitable skilled workers. This is particularly true in STEM and heath-related occupations.”
In the US where the competition for talent is also fierce, a 2021 survey from Biospace found that the average pay for biopharma employees was $128,689 in 2021, up nearly 6% from $121,736 in 2020, and up 12% from $114,723 in 2019. Companies that are not offering market value should be prepared to lose talent in a competitive recruitment market.
Tech is perhaps seeing the greatest pressure on salaries as companies across every sector expand digital transformation plans and seek the people to put these into action. This has already pitted industries such as pharmaceuticals and engineering against big tech in the battle for talent.
The global technology market is expected to grow by 6% in 2022 and 2023 according to a report from Forrester, while the software services market will grow by 10.5% this year. In the US, according to the Bureau of Labor Statistics, employment in the computer and information technology occupations is expected will grow by 13% from 2020 to 2030, much faster than the average for all occupations. This will make the battle for talent and the need to pay higher salaries even more severe – the top 10% of US network architects can already expect to be paid $175,570 annually.
Salary and benefits are still the top priority for STEM candidates
Companies who delay in recognising market value of sought-after specialists risk losing them to a better considered offer.
Wages are likely to increase as companies try to keep hold of who they have, while potential candidates will often have multiple job offers on the table. US tech and pharmaceutical companies are planning to raise pay by 3.1% on average in 2022, the highest of any sectors, according to the 2021 General Industry Salary Budget Survey from Willis Tower Watson. This reflects the persistently tight labour market and the rising cost of living.
In our How the STEM World Works research, however, pay wasn’t given the same emphasis in every country. Salary and benefits are rated top in economies like Japan (63%), Switzerland (64%), the UK (64%) and the US (64%). However, several European countries rate flexible working options above pay and benefits, such as Belgium (53%), France (53%) and Spain (69%), while the chief preference in Luxembourg and the Netherlands is for good work/life balance.
Beyond Europe, the value placed on salary and benefits is more of a mixed picture. Survey respondents in Hong Kong are unanimous in favouring salary and benefits as the most important criteria when searching for new roles. Respondents in the United Arab Emirates placed salary and benefits behind career development opportunities and work/life balance considerations. The customarily high level of salaries – tax-free – that people working in the UAE enjoy, probably goes some way to explain this result.
Sought-after specialists are likely to get multiple job offers and companies may need to offer more enhanced packages when an initial job offer is made to secure the best candidates. And while salary is a leading consideration for many STEM specialists, they also increasingly expect other benefits, such as hybrid or remote working as part of their terms of employment. In our survey, remuneration was not that far ahead of flexible working options (54%) and work-life balance (53%). A further 59% told us that being financially secure is of uppermost importance in their life goals.
Employers are at risk of losing out on key talent if they aren't savvy to these changes. Discover more about How the STEM World Works in our whitepaper.
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