Salaries: a perfect storm
With pay awards predicted to return to pre-pandemic levels and more this year – that’s at least 2.5% in old money to you and me – and nearly half of all employees believing they are paid less than they should be, we could be in for the perfect storm.
Recent indications are that salaries could rise by up to 25 percent in this quarter, due to the lack of available staff which then fuels retention issues and so on. We could see the biggest 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?