With inflation rates at a 40-year high, household bills skyrocketing, and the threat of a recession looming, employers are being warned to prepare for an influx of requests for a pay raise from employees.
On average, wages increased by 4.7% over the last year which, on the surface, sounds like a good deal. But this has been outstripped by inflation, meaning that wages have actually fallen by 3%.
Jenny Marsden, Associate Director of BrightHR, says: “We are seeing increased unrest amongst workers, as evidenced by ongoing industrial action across many sectors calling for pay rises in line with inflation.
“It’s really important to bear in mind that everyone is feeling the pinch of the economic landscape right now, including businesses. However doing nothing is not an option. Employers must recognise that this is a real issue and put measures in place to support their employees.
“Staff who are struggling with soaring household and fuel costs may look for external opportunities if their current employer cannot effectively contribute towards their income.
“Clearly, the greatest benefit would be to offer staff a pay rise or bonus. However, those who do not have extensive financial resources may have to get creative to help support their employees and avoid losing key members of staff.
“There are other ways employers can help staff, such as travel ticket loans or hybrid working arrangements to save on commuting costs, bringing remote workers into the office (if requested) to help save their energy bills, financial literacy support, signposting employees to their EAP, implementing saving schemes and salary sacrifice loans, and training and development opportunities to establish a clear career pathway.
“Where employees can clearly see that there is a plan for their long-term professional success, they will be less likely to jump ship for a short-term financial gain.
“Unfortunately it’s a bleak situation for everyone, and the immediate future looks no brighter. Energy bills are expected to rise again in the autumn and a difficult winter is predicted. But a workplace that values open communication, where staff feel comfortable in raising their concerns and speaking with their managers who, in turn, are able to handle such conversations sensitively and appropriately, can go a long way towards maintaining morale.”