A recent study has unveiled the growing concern among businesses across Britain regarding staff retention amidst the ongoing cost-of-living crisis.
The research, conducted among HR leaders from small to large organisations, reveals that nearly three-quarters of them are apprehensive about losing crucial talent.
The findings indicate that a staggering 90 percent of HR leaders are worried about staff departure due to their inability to meet the escalating demands for pay raises in line with inflation.
Furthermore, 88 percent have reported an increase in requests for pay raises since the onset of the cost-of-living crisis.
Wages in the UK are experiencing one of the fastest recorded growth rates, with the latest data from the Office for National Statistics revealing a 7.8 percent increase in wages (excluding bonuses) between June and August 2023 compared to the previous year.
Retention issues during economic strain
This comprehensive study, involving 500 HR directors or business owners, forms part of a forthcoming white paper by Nous.co, a household money-saving tool. The paper is set to be published in the new year and sheds light on the challenges faced by businesses in retaining talent during times of economic strain.
Nous.co has recently collaborated with several major employers to address these challenges by offering membership to teams through Nous for Business. By doing so, Nous aims to assist employees in saving significant amounts of money by securing fairer deals and managing the intricacies of switching providers.
According to the research, 78 percent of respondents believe that the surge in pay raise requests poses a risk to the performance and profitability of their companies. Alarmingly, only 38 percent of firms managed to provide pay raises in line with inflation during their last pay review, representing an 8 percentage point decrease from the previous year. Additionally, 34 percent offered below-inflation raises, while one in eight firms provided no raises at all.
Three-quarters of HR leaders acknowledge that their employees are grappling with financial difficulties amid the cost-of-living crisis, attributing this to the surge in pay demands and discontent with what companies can afford to pay. One senior HR professional, speaking anonymously, expressed the dilemma faced by many businesses: “We understand our staff are struggling and need a decent pay rise, but we just can’t afford to give out huge increases without putting the business at risk.”
HR leaders are struggling
Greg Marsh, CEO and founder of Nous.co, commented on the challenging situation faced by HR leaders: “Our research shows just how challenging things are for many HR leaders at the moment. Businesses are losing their best people as they struggle to keep up with pay demands.”
Marsh emphasised the importance of addressing higher bills directly and proposed creative solutions. “HR leaders need to look for creative ways to address the problem of higher bills directly. At Nous, we see just how much people are overpaying for the essentials such as mobile, energy, and broadband – and just how much of a difference businesses can make by stepping in to help.”
He highlighted the positive impact of Nous for Business, stating that businesses choosing Nous are putting money directly into people’s pockets. Employees who have signed up have reported significant savings and emphasised the time and stress reduction as equally valuable as the monetary benefits.
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.
