A recent joint survey conducted by HR technology provider BrightHR and business advisory firm Peninsula Group has unveiled that a significant quarter of UK companies are grappling with the management of pay increase requests from their employees.
The study also revealed that 52.8 percent of these companies have implemented pay raises as a strategic move to combat the ongoing labour shortage.
The economic landscape, marked by a surge in the cost of living, is proving to be a double-edged sword for both individuals and businesses.
Average monthly bills have skyrocketed by 61 percent since 2021, leaving more than one in five households with no disposable income at the end of the month. Alarming for businesses, 19 percent are expressing concerns about potential closures in 2024.
In the face of these financial challenges, employers are navigating the delicate balance of cost containment while striving to provide attractive compensation packages to retain and attract talent. A staggering one in five employers is currently struggling to fill job vacancies.
Higher salaries are their biggest motivation
Thea Watson, Chief Growth Officer at BrightHR, emphasised the critical role that salary plays in the current job market:
“Half of UK workers (51%) plan to seek new employment in the first quarter of 2024, with 42 percent citing the desire for a higher salary as their primary motivation.”
Watson continued, acknowledging the difficulty for employers to keep up with salary research in a dynamic market, especially considering variations in locations and the impact of inflation. To address this challenge, she introduced BrightHR’s salary calculator tool, designed to simplify the process by providing instant access to average salary ranges based on job title and location.
“By entering your job title and location, you can instantly access the average salary—plus the lower and higher bands too, to help you make an informed decision when it comes to making an offer. With it, you can feel confident that your ads stack up and champion a positive working culture with full transparency on pay,” Watson explained.
What about salary benchmarking?
Recognising the financial strain on businesses, Watson reassured employers that salary benchmarking allows them to enhance benefits packages, making them as appealing as those offered by larger corporations with more substantial budgets. This strategy ensures competitiveness in attracting top talent even when unable to provide top-of-the-range salaries.
As the job market continues to evolve amidst economic challenges, the ability of businesses to adapt their compensation strategies will be crucial in securing and retaining skilled personnel. BrightHR’s innovative tools aim to assist employers in navigating this complex landscape, offering a comprehensive solution to the intricate dance between financial constraints and talent acquisition.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
