Salaries: a perfect storm
Earlier this year pay awards were predicted to return to pre-pandemic levels – that’s at least 2.5% in old money to you and me – but the cost of living crisis has caused a rapid rethink for workers, nearly all of whom are worried about meeting rising costs. With many sectors already striking and no end in sight, we could be in for the perfect storm.
Recent indications are that salary demands are 10% plus (and more in some sectors) which could lead to more inflation. There is already a lack of available staff across all sectors which, coupled with perceived low pay, could fuel retention issues and so on. We could see the biggest pay increases since 2008 and way more than the current rate of inflation.
We have already seen reports of huge increases for new starters as employers fight to get the staff they need, resulting in rises for existing staff also.
In the last year or so everything seems to have been frozen in time, but with the jobs market now recovering, industry getting back on its feet and prices rising, employees are starting to feel that it is time their employers recognised their worth. The lack of security that prevailed during the height of the pandemic seems to have disappeared, with the number of redundancies and collapsed companies predicted not materialising.
As a consequence, employees are looking for a sign that they are valued by their employers which usually means a pay rise, or two!
According to research carried out by XpertHR, over four in five employers (84.8 per cent) expect to increase pay at their next annual review, with the remainder either unsure or expecting a pay freeze.
Additional research carried out by HR software provider CIPHR, has suggested that workers are looking at their salaries and comparing them to their job role and experience; the result being that over 40% believe they are being paid less than they should be.
With the market shifting to being candidate led, employers will need to think carefully about what they will be offering their staff in this years’ round of pay awards. Whilst money is only one motivator – and not usually the biggest – it is still one that makes employees feel valued and wanted. Throw in career development, work-life balance, remote working, poor line management and recruitment issues and you can see the challenge of retaining and rewarding the workforce.
Who would be in HR at the moment?