Pay rises are still falling behind despite the cost of living crisis intensifying and inflation rates going up further, analyses have shown.
A survey by Aspire, which polled more than 500 candidates from a range of industries including marketing, sales, technology and creative, found that nearly half of respondents (45 per cent) had been waiting more than 12 months for a pay rise.
While a third (33.5 per cent) of respondents cited salary as the most important job factor, a similar proportion (32 per cent) also said they would look to change roles over the next year.
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Of those who had received pay rises, 46.7 per cent had received a raise of between 0 and 5 per cent: much lower than the 10.1 per cent inflation rate and also well short of the forecasted 18 per cent rate of inflation for 2023.
Commenting on the findings, Paul Farrer, chairman and founder of Aspire, emphasised that with half of candidates not having received a pay rise in the last 12 months, “we’re seeing what many candidates see: that they stand to benefit from changing jobs right now,” he said.
“With inflation pushing up energy and fuel costs, Farrer said that “it makes sense that people are looking for new roles that offer them a competitive salary or a pay rise that can protect them from the rising cost of living.”
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For this reason, he advised that employers needed to be “acutely aware and sensitive towards” how wider societal trends feed into the motivations of workers – “achieve this and employers won’t just be better placed to attract the right talent – they’ll be able to retain it too,” he added.
A separate survey by recruitment firm Wade Macdonald, which polled more than 1,100 HR, finance, and accountancy professionals in the UK, found that one in three (32.9 per cent) employees had not received a pay rise this year.
In addition, the survey found that nearly three in five (58 per cent) valued bonuses the most out of all reward types, while half valued pensions (50 per cent), compared to only a third (33.6 per cent) looking at healthcare options when it came to assessing the value of a job.
Meanwhile, only one in 20 (5 per cent) valued gym memberships as a reason to take or stay in a job, while more than a quarter (26.1 per cent) said free parking would be a key benefit for them.
Overall, nine in 10 (89.9 per cent) also rated flexible working as key in any current job or job search.
Chris Goulding, managing director of Wade Macdonald, said the findings demonstrated that pressure was mounting on employers to reassess perks and monetary incentives: “There are countless factors which affect a candidate’s decision to change role, but the latest tech and a beanbag chair aren’t going to cut it for the foreseeable,” he said.
Taking this into account, Goulding urged that if there is anywhere leaders should be investing – “it’s in your people and organisations – their leaders and HR teams will need to act decisively if they want to remain in the competition”.
He continued: “Talent will vote with their feet. If they aren’t getting the remuneration and support they truly deserve, they will move to get it.”
However, Dominic Wade, veteran recruiter and co-founder of Wade Macdonald, warned businesses that they might want to “resist blanket pay rises” or “succumb to stagflation”.
He cautioned that raises “won't equal out inflation anyway” at the risk of entering business insolvency, and resulting in further inflation. “Employers shouldn’t be giving out increases across the board because this is inflationary in itself – it means prices have to go up and up and up, only adding to the problem further and kicking the can down the road,” he added.
Alternatively, Kate Palmer, director of HR advice and consultancy at Peninsula, said that if employers could not offer a higher remuneration, they should “openly communicate the alternative ways they can help out their staff and find a consensus on how staff think they should be supported”.
“What every employer is able to provide depends on their size and how much they can afford – while some can provide their staff with childcare vouchers and a company car, this isn’t always realistic, but there is always something you can do to help,” Palmer reasoned.
The surveys’ findings come as energy regulator Ofgem made headlines today by confirming a record 80 per cent increase in the energy price cap will go ahead from 1 October, which will see a typical default tariff customer paying an extra £1,578 per year.