Beyond the National Minimum Wage requirements, there is no predetermined wage for employees. While market forces dictate that you have to pay employees more to access their skills and knowledge, it is ultimately down to an employer’s discretion on how much employees are paid.
The same is true of pay rises. However, given the current challenges of recruitment and retention, and the challenges that employees face with the cost-of-living crisis, how should you set pay?
Well, some recent research by TotalJobs has brought some light to the plight of many workers. The online recruiters research found:
- The cost of living is a worry for 77 per cent of workers
- More than 90 per cent of workers have experienced rising work-related costs in the last 12 months
- More than a third of workers are considering changing work or sectors to seek better pay.
These findings aren’t surprising given that pay in 29 out of 40 sectors in the UK has fallen behind inflation – average pay only increased by 3.05 per cent in the last year
But how are other employers responding to these issues? In the last year, 58 per cent of employers met the expectations of their staff by increasing their salaries, of which:
- 35 per cent awarded pay rises of between 1-5 per cent
- 34 per cent increased salaries by 6 – 10 per cent
- For the lucky few, 16 per cent of employers offered average raises of 11-20 per cent.
So, given these recent findings is it time for a pay rise? Employers need to consider the cost of losing critical members of staff, which itself can be expensive.
According to the CIPD, the average cost of recruiting a new employee is £6,125 – rising up to £19,000 for senior roles.
The need to offer any pay rise needs to be balanced against your other costs as a business, as even small changes to your employee’s salaries can have a big impact on your cash flow.
If you need help reviewing the cost of salaries and benefits offered to employees, please contact your Seymour Taylor representative today or email enquiries@stca.co.uk or call 01494 552100.
This blog is for guidance only, professional advice should be obtained before acting on any information contained herein. The information was correct at the time of publishing 16th February 2023.