According to a survey by PricewaterhouseCoopers (PwC), more than eight in 10 employers from large UK businesses are taking action to help staff in the face of the cost of living crisis with financial support through focused pay increases for essential workers (53%), additional pay reviews (51%) and one-off bonuses (40%) being the favoured approaches.
This, PwC noted, in the context of the latest analysis from the Office for National Statistics (ONS) which shows real regular pay having dropped by 3% and inflation, as measured by the Consumer Price Index (CPI), having moved into double digits.
PwC’s pay and employment partner, Alastair Woods, said: “We are seeing the conflation of two major employment issues - the rising cost of living and skills shortages. Almost one in five UK 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, he continued, 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 programmes that hold onto talent for the long haul.
While direct financial support is the primary way in which employers are helping their workers, some organisations (15%) are implementing other non-monetary interventions such as increased staff shopping discounts, support with home insulation, financial wellbeing programmes and employee hardship funds.
The survey also found that over half (56%) of respondents are retraining and upskilling their current employees to fill key skills gaps while 13% are making greater use of contractors or gig workers and 79% are looking at ways to reduce workforce costs.
The results of the survey highlight that pay rises are an option for some businesses but if an across the board pay rise is not possible, employers can look at other ways to help employees financially with other benefits. Supporting employees’ financial wellbeing can include non-monetary measures such as signposting staff to external sources of help like debt charities.
Employers who are considering reducing their workforce costs by looking at redundancies or changes to terms and conditions will still need to prepare a robust business case and follow a full consultation process.
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