Large employers in the U.K. are taking action to help employees in the face of the continuing cost-of-living challenges, according to a new survey by PricewaterhouseCoopers.
The top ways employers are intervening to help with rising inflation include focused pay increases for essential workers (53 per cent), additional pay reviews (51 per cent) and one-off bonuses (40 per cent). While direct financial support is the primary way in which employers are helping employees, 15 per cent of organizations are implementing other non-monetary interventions such as increased staff shopping discounts, support with home insulation, financial well-being programs and employee hardship funds.
In terms of pay increases, the majority (82 per cent) of respondents cited rises of 1.5 per cent and 4.5 per cent in their pay budgets in early 2022, up slightly from a range of two per cent and three per cent in previous years. Only about one in five (18 per cent) said they have a budget for pay increases above 4.5 per cent for 2022.
In addition, the majority of companies said they conducted their pay budget reviews earlier in 2022, before inflation reached record highs, and very few have decided on pay budgets for 2023.
Employers are also grappling with talent shortages, with 93 per cent of respondents saying they’re at least somewhat concerned about their current attrition rates. Indeed, many are looking at how they can use financial reward to deal with talent scarcity and attrition including retention awards (46 per cent), sign-on bonuses (24 per cent) and changing pay bands (22 per cent). Almost two-thirds (62 per cent) said they’re introducing greater flexibility in ways of working and hourly patterns, including remote working policies (44 per cent).
“We are seeing the conflation of two major employment issues — the rising cost of living and skills shortages,” said Alastair Woods, pay and employment partner at PwC UK, in a press release. “Almost one in five U.K. workers say they are going to quit their job in the next 12 months so it is no surprise that talent retention is a top priority for employers. In the current economic climate, employers need to consider how to target spending to have the most impact on workers.
“A more flexible and innovative approach to reward and working conditions will be critical, but so will programs that hold onto talent for the long haul. Organizations are investing in programs focused on well-being, flexible working patterns, career ladders and new and more personalized benefits.”