Two-thirds of UK workers have not yet received a pay rise despite the cost of living crisis intensifying, research has shown.
A UK survey of 2,000 people, commissioned by Resource Solutions, found that 67 per cent of workers had not seen a wage increase this year, while everyday essentials and bills have continued to soar.
The poll also focused on the impact the cost of living crisis was having on the UK workforce, and revealed it was disproportionately affecting some groups more than others.
While the candidate-led job market has seen some ballooning salaries, the survey revealed that the gender pay gap was still present, despite women being the hardest hit by the cost of living crisis. Over the last year, one in three (34 per cent) men got a pay rise from their current job, compared to 29 per cent of women.
While men were more likely to receive a pay rise for their performance at work (36 per cent), only 27 per cent of women reported being financially rewarded for work performance. Male employees were also more likely to be awarded a pay rise to match that of new hires (21 per cent compared to 13 per cent of women).
Moreover, almost one in 10 women (9 per cent) reported they had never received a pay rise in their current role, compared to one in 20 men (5 per cent). Almost a third of women (32 per cent) stated that their most recent pay rise was the result of a company’s blanket increase, more than for any other reason.
Get more HR and employment law news like this delivered straight to your inbox every day – sign up to People Management’s PM Daily newsletter
Younger generations were found to have been most affected by the cost of living crisis, with a third (32 per cent) of Gen Z workers disclosing that they hadn’t had a pay rise within the past year. Among this age group, women were also adversely affected by the rise in the cost of living, with 37 per cent of Gen Z men receiving a pay rise to help them adjust to rising costs, while only 29 per cent of women stated the same reason for a pay rise, if a rise was received at all.
With businesses fighting the ‘war for talent’ and focusing on retaining their current employees, one in four UK workers reported receiving a pay increase in the past year as part of employers’ efforts to improve staff retention.
Younger generations were most likely to be awarded a financial benefit as a means of businesses trying to maintain staff, with 18 per cent of Gen Z workers citing this as the reason for their wage inflation. Just 8 per cent of 55+ year-olds reported a pay increase for this reason.
A new trend provoked by spiralling energy costs saw 42 per cent of workers prompted to consider coming into the office to save money on home energy bills, with Gen Z being the most likely to consider this (76 per cent). In fact, a quarter (26 per cent) of workers were already choosing to come into the office for this reason.
Amid the growing cost of living crisis and the talk about a looming recession, Norma Gillespie, CEO of Resource Solutions, emphasised the survey’s additional findings that two in five (41 per cent) workers were now more likely to stay in their current job in the knowledge that a financial recession may be around the corner, while only 17 per cent said they considered changing jobs in light of the economic predictions. “This indicates that the two-year-long Great Reshuffle may finally come to a halt. As uncertainty around the near future grows, some workers are beginning to find the idea of quitting their jobs too risky,” she said.
Gillespie added that regardless of whether workers are more likely to leave or stay in their current role, “the current cost of living crisis is encouraging employees to evaluate their financial position and assess the job security in their current position or elsewhere”.
While acknowledging that the cost of living crisis was having the greatest impact on those already struggling to make ends meet, Nicola Inge, employment and skills director at Business in the Community, said businesses should ensure their employees “are paid fairly and supported financially to make life a little bit easier for people right now”.
She proposed steps ranging from conducting pay audits, to assessing fair pay ratios for their organisation. “Businesses should consider cost of living pay rises for employees, promote financial support and offer help to staff who may be struggling, such as assistance with financial planning, hardship grants and support with wider costs,” Inge added.
Echoing this, Charles Cotton, senior policy adviser at the CIPD, said it made sense to focus attention on low-waged workers who are often more at risk of falling into poverty and are also more likely to struggle getting out of poverty “because they spend proportionately more of their income on such essentials as food, accommodation, utility bills, etc”.
“So, rewards and HR policies focused on them can help, such as offering enough pay and hours to enjoy a reasonable standard of living,” he said.